CBP’s announcement on tariff refunds
CBP announced new operational capabilities for its electronic system designed to facilitate refunds of tariffs paid under the International Emergency Economic Powers Act (IEEPA). CBP refers to this system as “CAPE” (Consolidated Administration and Processing of Entries) and said on April 10, 2026, that it will be ready to process some refunds starting on April 20, 2026. This article covers some of the key logistics and details. At a high level, this process would involve the importer compiling a list of entry summary numbers for which it paid IEEPA tariffs and submitting a declaration to the CAPE system. CBP would then process and validate the claims and provide a refund. CBP is limiting access to this system to (1) the importer itself, and (2) the customs broker that actually filed the specific entries on behalf of the importer.
The larger legal context
Although CBP announced that this system will be available on April 20, the agency was careful to say that it will issue validated refunds of duties paid under IEEPA “pursuant to court order.” In other words, CBP (and the wider US Government) has not said it will voluntarily refund anyone who has paid IEEPA tariffs.
What specific court order will direct the payment of refunds? The US Supreme Court ruling on February 20, 2026, did not specify whether, when, or how refunds must be paid. It decided that the collection of tariffs was unlawful under IEEPA, but it did not address the refund issue. That has left the issue of refunds to the lower courts, and this is now being addressed in the US Court of International Trade. That court picked a case to serve as the “lead” case, staying all other IEEPA refund cases, and issued an initial order directing CBP to refund the IEEPA tariffs. (The name of this case is Atmus Filtration v. United States.) The government, however, informed the court that it could not logistically do this under the terms of the court’s order. In response, the court suspended its order but has required the government to provide updates on its development of the CAPE system. The court order requiring the refund payments was temporarily put on hold.
Importantly, the government has 60 days after the final order is entered to appeal the decision to a higher court.
Just recently, however, the plaintiffs in the lead case jointly agreed with the government to dismiss that case—presumably because they settled the case for the specific parties involved. Shortly after, the Court of International Trade chose another case as the lead case and entered an identical (suspended) order requiring the refund of the tariffs. (That case is Euro-Notions Florida v. U.S. Customs and Border Protection.) The court entered that order on April 7, 2026, and stated that the order “is suspended to the extent that it requires immediate compliance.” This resets and extends the government’s deadline to appeal the order directing refunds.
The bottom line is that there is no court order directing immediate refunds, and, even if the order did this, the Trump administration could appeal the court’s ruling.
CBP’s announcement that it will launch its tool (CAPE) on April 20 is a positive sign, but there has been no public announcement by the current administration committing to the refunds. Further, there has been no indication of a definitive date for when the government will begin issuing refunds for CAPE submissions. In our view, this means that we do not yet have certainty about how and when the government will provide refunds.
Recommended actions for importers
This new announcement is leading us to provide further context for our recommended course of action. We previously recommended that importers with significant IEEPA refunds file a protective lawsuit and administrative protests to best position themselves to secure refunds. We still believe that filing a protective lawsuit in this environment is appropriate. With respect to filing administrative protests, however, we believe importers should consider whether filing protests or seeking refunds through the new CAPE system would be more beneficial.
CBP’s CAPE system will not process entries that are under protest filings. So, although an administrative protest provides one means to secure a refund, pursuing that course precludes the importer from receiving a refund for the same entries through CAPE. Accessing the CAPE system does not protect your legal rights in the same manner that filing a lawsuit or filing an administrative protest protects your legal rights. The CAPE system is new and untested with the public, but if it proves to be an efficient mechanism for processing refunds, it may be faster to use it than to file protests. For that reason, an importer may opt to use CAPE.
That said, there are some limitations with the CAPE system that may lead some importers to avoid using it. The following are some limitations and their anticipated effects:
- Only importers and customs brokers who filed the initial entry can access and use the CAPE system. This means that customs brokers will be pressed—and possibly overloaded—by many of their clients to start the filing process. Unless an importer operates the CBP ACE system itself, they will likely need to wait in line with other customers of their customs broker.
- The only customs brokers who can file on an importer’s behalf are the customs brokers who initially filed the entry documents. An importer cannot use any customs broker to file a refund request through CAPE. Rather, the importer must use the customs broker who originally entered the documentation. If an importer uses multiple customs brokers, each one will need to file the refund request for the entries for which it was responsible.
- Refunds will only be processed electronically, and they can only go to a US bank. Some importers do not have US bank accounts. They will not be able to receive refunds through CAPE. One way around this issue, generally, is for the importer to designate another agent (often the importer’s customs broker) to accept refunds on behalf of the importer. (The agent is referred to by CBP as the “notify” party.) But this option may not work for many importers because CAPE will only allow this if the “notify” party was designated as such on the original entry.
- Importers cannot resolve additional classification or value issues. The CAPE system will not allow importers to argue for adjustments related to improper classification, country of origin, or value issues. If the importer believes that there are additional corrections beyond the IEEPA duties paid, then an administrative protest would be an appropriate method to correct these entries and seek IEEPA refunds.
- Other types of entries are not allowed. The following types of entries cannot be processed through the CAPE system at the time it comes online:
- Entries that have been flagged for reconciliation, as well as Entry Type 09—Reconciliation Summary
- Entries on drawback claim
- Entries subject to Anti-dumping/Countervailing Duties, for which the Department of Commerce has issued liquidation instructions
- Entries for which liquidation is final
Choosing the right refund strategy under CAPE
If these restrictions do not create difficulties for a particular importer, the importer might most quickly receive its tariff refund by using the CAPE system. Even so, the importer should keep track of the deadline for filing administrative protests (180 days after liquidation). If CBP takes a long time to process refunds through CAPE, the importer should carefully consider whether to file a protest before the 180-day deadline.
If these restrictions of the CAPE system would prevent an importer from using it, the importer should continue to file administrative protests.
Our bottom line is to continue recommending protective litigation when substantial refunds are due and to consider whether using the CAPE system would fit an importer’s circumstances. We are not yet operating with certain ground rules or timing in place, but importers should be able to obtain IEEPA tariff refunds through one mechanism or another, given the Supreme Court’s decision that IEEPA duties were unlawfully imposed. Nixon Peabody can help assess CAPE eligibility and advise on CAPE submissions, coordinate litigation strategy, and position your company to recover IEEPA tariffs through the best available channel.