The largest tariff refund process in modern customs history is underway. Following the U.S. Supreme Court’s February 2026 decision invalidating the Trump administration’s tariffs imposed under the International Emergency Economic Powers Act (IEEPA), U.S. Customs and Border Protection collected approximately $166 billion in IEEPA duties across more than 53 million entries from roughly 330,000 importers. CBP now has to give that money back. The mechanism it built to do so is called CAPE — Consolidated Administration and Processing of Entries — and it has been live in the ACE Secure Data Portal since April 20, 2026.
For importers, the CAPE process is both a major liquidity opportunity and a procedural minefield. The first wave of refunds is flowing, but the universe of entries Phase 1 actually covers is significantly narrower than the universe of entries that paid IEEPA duties. Importers whose entries do not fit Phase 1 face a different set of decisions involving protests, complaints at the Court of International Trade, and waiting for Phase 2. This article tracks where the process stands, what Phase 1 covers, what it does not, and what importers should be doing right now to protect their refund rights.
The Legal Foundation
The IEEPA tariffs were imposed throughout 2025 under a series of executive orders citing emergency powers under 50 U.S.C. § 1701 and related provisions. The tariffs included the reciprocal tariffs imposed on dozens of countries, the country-specific tariffs on Canada, Mexico, and China issued in early 2025, the Section 122 surcharges layered on top of MFN rates, and other IEEPA-based duty measures. On February 20, 2026, the Supreme Court held that these IEEPA tariffs were not lawfully imposed.
That ruling left CBP with an enormous administrative problem. The Court of International Trade, in proceedings before Judge Richard K. Eaton, ordered CBP to liquidate unliquidated entries without IEEPA duties and to reliquidate any liquidated entries for which liquidation was not final. CBP told the court that processing the volume of refunds through standard procedures would require approximately 4.4 million working hours. The CIT granted CBP a 45-day extension to develop a new process, and CAPE is the result.
Importantly, the Supreme Court ruling and the subsequent CIT orders apply only to IEEPA tariffs. Section 301 tariffs on Chinese goods remain in full force. Section 232 tariffs on steel, aluminum, copper, and automobiles remain in full force. Antidumping and countervailing duties remain in full force. The refund opportunity is specifically and exclusively limited to duties paid under the invalidated IEEPA executive orders.
What CAPE Phase 1 Covers
Phase 1 is designed to handle the largest and most administratively straightforward category of refunds. Per CBP’s reporting to the Court of International Trade, Phase 1 currently covers approximately 63 percent of all entries that included IEEPA tariffs, representing roughly $127 billion of the $166 billion in duties collected.
Phase 1 eligibility extends to:
- Unliquidated entries. Entries that had not yet liquidated as of CAPE submission and were filed with at least one IEEPA HTSUS Chapter 99 provision and corresponding duty payment.
- Liquidated entries within 80 days of the CAPE submission date. The 80-day window mirrors the 90-day voluntary reliquidation period under 19 U.S.C. § 1501, allowing CBP to reliquidate without further procedural friction.
- Entries with suspended, extended, or under-review liquidation statuses. Added in the April 20, 2026 deployment update.
- Certain warehouse entries and warehouse withdrawals. Also included in current Phase 1 scope.
- Reconciliation-flagged entries (as of June 29, 2026 deployment). Entries flagged for reconciliation with no reconciliation entry yet filed were added to Phase 1 scope effective the date this article is published.
What CAPE Phase 1 Does Not Cover
The exclusions from Phase 1 are where most of the unresolved exposure sits, and these are the categories importers most need to understand.
- Finally liquidated entries. Entries whose liquidation is final under 19 U.S.C. § 1514 — that is, more than 180 days after liquidation with no protest filed — are not in Phase 1. The CIT ordered that finally liquidated entries also be reliquidated without IEEPA duties, but the mechanism to do so administratively has not yet been built. Judge Eaton has pointed importers to the remedies available under 19 U.S.C. § 1520(c) and to the protest process for entries still within their protest windows.
- Entries subject to AD/CVD with pending Commerce liquidation instructions. Approximately 166,000 AD/CVD-suspended entries representing roughly $2.9 billion in IEEPA duties are excluded from Phase 1 because they require manual processing under 19 U.S.C. § 1504(d).
- Reconciliation entries already filed. Entries flagged for reconciliation where the reconciliation entry is already on file are excluded from the current Phase 1 scope and will be addressed in a future phase.
- Entries subject to ongoing litigation or compliance review. Entries currently under active CBP review for compliance concerns may be held outside CAPE for separate processing.
How CAPE Works Mechanically
An importer of record or authorized customs broker submits a CAPE Declaration by uploading a CSV file through the CAPE tab in the ACE Portal. Each declaration lists up to 9,999 entry numbers. Multiple declarations may be submitted. There is no separate refund application — the declaration itself is the refund request.
Once submitted, ACE runs two series of validations. The first set checks the structural integrity of the declaration itself. The second set validates each entry individually against Phase 1 eligibility criteria. Entries that fail validation are rejected with a reason code; the importer can correct and resubmit. Entries that pass validation receive a unique CAPE claim number, and ACE removes the IEEPA Chapter 99 provisions and corresponding duty amounts from the entry summary, generating an updated version of the entry.
CBP then reviews the updated entries and either liquidates them (if unliquidated) or reliquidates them (if within the 80-day window) without IEEPA duties. Refunds are consolidated by importer of record — or by the designated Form 4811 notify party — and by liquidation date, and are issued electronically via ACH within 60 to 90 days following acceptance of the CAPE Declaration, unless a compliance concern requires further review.
Statutory interest is included in the refund amount under 19 U.S.C. § 1505(c). Importers should not attempt to calculate interest separately; CBP’s calculation governs.
Where the Process Stands
As of CBP’s most recent reporting to the Court of International Trade, the numbers are substantial. Through late May 2026, accepted CAPE submissions covered approximately 15.9 million entries containing IEEPA tariffs, and approximately 54 percent of accepted entries had already liquidated or reliquidated without IEEPA duties. CBP reported approximately $60 billion in refunds forwarded to Treasury for disbursement. The first ACH refund payments began issuing on or about May 11, 2026.
Phase 2 functionality — addressing reconciliation entries with filings already on file, AD/CVD-suspended entries, and other complex categories — has not yet been deployed. CBP has stated it expects to develop those functionalities but has not committed to a timeline. The June 29, 2026 deployment expanded Phase 1 to include reconciliation-flagged entries without prior reconciliation filings, but the broader Phase 2 scope remains pending.
The Risks Importers Should Not Ignore
The refund process is administrative, not adversarial, but several risks accompany the CAPE filing process that importers should think through before submitting.
Refunds remain available to offset other duties owed. CBP has confirmed that IEEPA refunds returned through CAPE remain “available to offset amounts owed with respect to other duties.” If an importer has unrelated outstanding duty liabilities, those amounts can be applied against the refund before any payment is issued to the importer.
False claims exposure. A CAPE Declaration is a representation to CBP that the entries listed are eligible for refund. Declarations that include entries with underlying compliance issues — for example, entries where the IEEPA duty was correctly assessed but other components of the entry were misdeclared — can expose the importer to separate civil or criminal liability under the False Claims Act or under 19 U.S.C. § 1592. If your entry has valuation, classification, or origin issues independent of the IEEPA refund, those issues do not go away because you filed a CAPE Declaration.
Once accepted, a CAPE Declaration cannot be amended. Each entry can appear on only one accepted declaration. If additional eligible entries are identified after filing, a new declaration must be submitted for those entries — but errors on an already-accepted declaration cannot be corrected. Accuracy at filing matters.
Government appeal risk. The administration has signaled it will aggressively contest the refund framework. While the Supreme Court’s February 2026 ruling on the legal question is final, the procedural and administrative implementation of refunds remains contested in ongoing CIT proceedings. Importers should monitor for any appellate developments that could affect refund timing.
What to Do About Entries Outside Phase 1
For entries that fall outside Phase 1 scope, three protective steps are worth considering now rather than waiting for Phase 2.
File protests on entries still within their 180-day protest window. An entry that liquidated with IEEPA duties — and is still within the 180-day protest window under 19 U.S.C. § 1514 — should be protected by a timely protest filing. A pending protest preserves the importer’s ability to recover those duties regardless of how Phase 2 ultimately unfolds. Judge Eaton has specifically pointed importers to this option for entries with 2025 liquidations.
Consider a complaint at the Court of International Trade. Importers who want to maximize the universe of entries eligible for refund — particularly those with significant exposure on finally liquidated entries — may benefit from filing their own complaint at the CIT. This is a more aggressive and more expensive route, but it places the importer’s specific entries before the court rather than waiting for CBP to build the administrative mechanism.
Maintain complete records. Entry summaries, payment records, broker communications, accounting reconciliations, and internal compliance documentation should be retained indefinitely. Recordkeeping under 19 U.S.C. § 1509 already requires five-year retention for import records, but the IEEPA refund process is generating audit exposure beyond the routine. Importers should expect that some portion of refunded entries will be selected for compliance review.
Coordinating Refunds With Ongoing Tariff Exposure
The IEEPA refund process is happening at the same time importers are managing active tariff exposure under Section 301, Section 232, and AD/CVD orders. The strategic temptation is to treat refund recovery and forward-looking tariff mitigation as separate workstreams. They are not. Decisions about classification, valuation, country of origin, and FTA qualification all affect both the validity of refund claims on past entries and the duty liability on current entries.
An importer who is simultaneously seeking IEEPA refunds, claiming Section 301 exclusions, planning a supply chain shift to a non-China origin, and considering a prior disclosure on prior compliance issues needs an integrated approach. Each of these decisions has implications for the others, and inconsistencies in how the importer characterizes the same merchandise across these workstreams create their own enforcement exposure.
Need Help With Your CAPE Filing or Excluded Entries?
Great Lakes Customs Law represents importers across the full range of IEEPA refund scenarios — Phase 1 CAPE submissions, protests on liquidated entries outside Phase 1 scope, CIT complaint strategy on finally liquidated entries, and integrated tariff strategy combining refund recovery with forward-looking compliance. Jason Wapiennik works directly with importers and their customs brokers to ensure that refund filings are accurate, complete, and coordinated with the importer’s broader trade compliance posture.
For related guidance, see our pages on Trump tariff strategy, Section 301 China tariff exclusions, and protest filing. To discuss your specific refund situation, call us at (734) 855-4999, send a text message, or reach us on WhatsApp. You can also contact us online for a free consultation.