| The Supreme Court Ruling and Replacement Tariffs: On February 20, 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not grant the President authority to impose tariffs, effectively invalidating the “reciprocal” and “fentanyl” tariffs that had collected roughly $166 billion. However, imports are still not entering duty-free, as President Trump immediately replaced the IEEPA duties with a temporary 10% tariff under Section 122 of the Trade Act of 1974, which is currently facing its own legal challenges.
The CAPE Refund System: To process refunds for over 333,000 importers, Customs and Border Protection (CBP) is building a new module inside the ACE portal called CAPE (Consolidated Administration and Processing of Entries). When CAPE becomes available, Importers must submit a “CAPE Declaration” in the form of a CSV file listing the entry summaries for which they are requesting refunds. Based on the information available, the proposed functionality the system will automatically validate the submission (timing of review may vary) and route payments. Phase 1 of the CAPE portal is expected to launch in late April 2026 and will primarily cover unliquidated entries, while finally liquidated entries and those tied to drawbacks or reconciliations will be handled in a later phase.
The ACH Bottleneck Refunds will not be issued automatically and will only be paid electronically via ACH: As of late March 2026, a significant number of smaller importers had not yet enrolled in ACH, and CBP reported that over 7,700 refunds, unrelated to IEEPA refunds, had already been rejected due to missing enrollment. Setting up ACH within an ACE account is the single most critical action importers must take, as refunds will sit in a rejected status without it.
Legal Risks and Delays: While refunds are legally owed to the “importer of record,” downstream customers and plaintiffs’ firms are launching class-action lawsuits arguing they should receive the money if the tariff costs were passed on to them through higher prices. Additionally, the government has until early May 2026 to appeal the Court of International Trade’s refund orders, which could delay or pause the entire refund process.
Key Action Items for Importers and Brokers:
- Complete ACH enrollment to ensure refund payments are not rejected.
- Confirm your ACE account access and if your organization has not established an ACE portal account, then the Importer must request an ACE account from CBP.
- Audit your IEEPA entries, determine their liquidation status, and prepare your data in the required CSV format.
- Discuss with your legal counsel, whether filing protests on any liquidated entries before the 180-day window closes, will ensure you preserve your eligibility for a refund.
- Submit the CAPE Declaration promptly once the portal launches and monitor the system for any rejection notices.
Please click here for our previous announcement originally published on February 6th “Mandatory Transition to Electronic CBP Refunds Effective Feb. 6, 2026.”
JSC encourages importers and clients to discuss their method of reserving their right to a refund, with their counsel. Additionally, JSC is available to coordinate with your trade counsel to assist with filing PSCs and Protests. |
