IEEPA Tariff Refunds to Begin in U.S. on April 20... Companies Must Apply or Miss Out on Refunds

The U.S. Customs and Border Protection (CBP) has established a refund procedure for tariffs imposed under the International Emergency Economic Powers Act (IEEPA), and will begin full-scale refunds through a dedicated system. As a result, companies will now be able to reclaim tariffs via the refund process, instead of pursuing lawsuits against the U.S. administration. However, since the refund process is application-based, companies are advised to take proactive steps and prepare in advance.

Starting April 20, CBP plans to launch the first phase of refunds using 'CAPE' (Consolidated Automated Processing for Exclusions), a system dedicated to IEEPA tariff refunds. This is a follow-up measure in response to the U.S. Supreme Court's ruling that IEEPA tariffs were unlawful and the refund order from the Court of International Trade (CIT).

All IEEPA tariff payments are eligible for refunds, regardless of whether liquidation has occurred. However, in the initial phase, priority will be given to non-liquidated cases and cases within 80 days of liquidation. CBP expects to process approximately 63% of all eligible refunds during this first phase. Cases beyond 80 days after liquidation, post-summary correction or protest submissions, and cases involving antidumping or countervailing duties will be processed in subsequent phases as related functions are developed.

Korea International Trade Association, Trade Research Division

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With the implementation of this large-scale refund procedure, companies are expected to see their tariff burdens eased. In particular, now that the refund system is in operation, lawsuits seeking refunds from the U.S. administration are expected to become unnecessary. However, since the refund process is application-based, it is crucial for companies to respond proactively.

On this day, the Korea International Trade Association Trade Research Department provided guidance on key considerations for companies. First, only IEEPA-based retaliatory tariffs subject to the Supreme Court’s unlawful ruling, and "narcotics tariffs" (targeting China, Canada, and Mexico), are eligible for refunds. Tariffs on steel, aluminum, automobiles and parts, copper, and lumber imposed under Section 232 of the Trade Expansion Act are excluded from refund eligibility. However, for derivative products of steel, aluminum, or copper, retaliatory tariffs paid on the non-steel, non-aluminum, or non-copper content are eligible for refunds.

Unlike previous methods such as Post Summary Correction (PSC) or protest, the new process allows multiple entry numbers to be submitted at once. However, since refunds are not automatic, the Importer of Record (IOR) or a customs broker must apply directly. Although the process has been simplified, individual applications by companies are still required, as refunds are not processed automatically.

Korea International Trade Association Trade Research Department

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In principle, only the IOR or a customs broker designated by the IOR can apply for refunds. Even if the exporter has ultimately borne the cost due to export price reductions or similar reasons, exporters cannot apply directly to CBP for a refund. The only exception is when the exporter is listed as the IOR on the customs entry form, in which case a direct application by the exporter is possible.

To receive refunds, companies must complete registration for an ACE (Automated Commercial Environment) account and for ACH (Automated Clearing House) electronic transfers in advance. Refunds are expected to be paid within 60 to 90 days after application. Notably, companies cannot receive refunds without an ACE portal account and a U.S. bank account. If no U.S. account is available, it is possible to designate a third party. Furthermore, the Korea International Trade Association explained that prior collection and organization of entry numbers are necessary in order to upload IEEPA tariff payment records in CSV format.

Since the CAPE system includes a verification process that reviews previously submitted declarations, companies should also conduct a pre-check to ensure the accuracy of their filings.

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