New Duty Refund System Under Development by U.S. Customs and Border Protection
U.S. Customs and Border Protection (CBP) is in the process of creating a centralized system to facilitate refunds for duties collected under tariffs established by the International Emergency Economic Powers Act (IEEPA). This initiative follows a Supreme Court ruling in February that deemed the act unconstitutional. The new refund mechanism is expected to be operational by later this spring.
Overview of the Refund Process
The refund system will be integrated within CBP’s Automated Commercial Environment (ACE), the existing electronic trade processing platform utilized by importers and brokers. In a bid to streamline the process, CBP plans to consolidate refund requests by importer rather than evaluating them on an entry-by-entry basis. This approach aims to reduce administrative burdens and enhance processing speed, as detailed in a recent alert from the International Fresh Produce Association.
Mechanics of the New System
The forthcoming system, known as the Consolidated Administration and Processing of Entries, will manage claim submissions, duty recalculations, reviews, liquidations, and electronic refund payments. Importers and brokers will have the ability to submit refund requests via a web-based portal, which will also facilitate bulk uploads of entry data. By late March, CBP confirmed that most of the system components had been constructed and were in the testing phase.
Interest Rates and Eligibility for Refunds
Refunds issued under this new system will include a 6 percent interest rate, calculated from the date duties were initially deposited to the date of liquidation or reliquidation. A ruling from Judge Richard Eaton of the U.S. Court of International Trade on March 27 stated that past entries must be reliquidated without considering IEEPA duties, clarifying earlier eligibility concerns.
Action Steps for Importers
The International Fresh Produce Association (IFPA) recommends that importers who have paid IEEPA tariffs take the following three preparatory measures:
- Ensure company importer records are current with CBP.
- Create an ACE Portal account to access entry data and identify eligible refunds.
- Enroll in ACH Refund to facilitate electronic payments, as a relatively small percentage of affected firms have done so thus far.
IFPA is a trade association representing stakeholders across the fresh produce supply chain. For additional information on the liquidation process, visit IFPA’s Tariff Refund Townhall on March 11.
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