Jay Cho, managing director of tariffs and customs at Aprio, advises what importers should (and should not) be doing right now to prepare for duty refunds.
Refunds are due in the wake of the U.S. Supreme Court ruling that those imposed by President Trump under the International Emergency Economic Powers Act (IEEPA) are illegal. So importers that paid those duties over the last year should, in theory, be eligible for a windfall of refunded money.
Just how those refunds will be administered by U.S. Customs and Border Protection isn’t entirely clear at this point. CBP has asked the U.S. Court of International Trade (CIT) for a 45-day grace period so that it can set up a means of paying the refunds electronically, through the agency’s Automated Commercial Environment (ACE). The latest update suggests that effort is between 50% and 70% complete, Cho says.
He cautions, however, against moving too quickly to file claims for IEEPA duty refunds. At the moment, “it’s really hard to tell what is the best course of action.” Filing litigation at the outset could either accelerate or slow the process, depending on Customs’ willingness to move forward with the refunds under its own system. Early filing could also lead to denials, he says, if companies don’t have the proper documentation in place for post-summary correction.
In the meantime, importers should be moving to pull together all of the necessary documentation to validate their claims. They’ll need to make sure they’re registered and have an account with ACE, and have a clear idea of where they stand with regard to the deadline established by the CIT. For each entry, they must present a summary (Customs Form 7501), commercial invoice, packing list and bill of lading.
It’s not enough to depend on customs brokers for this information. “My experience is that a lot of companies rely on brokers and don’t have a separate record,” Cho says. “Maybe it’s a good time to do that.”