Updates on IEEPA Refunds
IEEPA Refund Developments: Legal Considerations and Immediate Action Items
Please see the following message from Roll & Harris LLP regarding potential IEEPA tariff refunds and legal developments.
We strongly recommend that you consult with legal counsel to evaluate your specific circumstances, as reconciliation entries, drawback claims, and other factors may impact your protest strategy.
While IAB can assist with the preparation and filing of protests, it is highly advisable that you seek legal advice to get the exact language that would work best for your situation. Most importantly, you need to obtain an ACE Portal account and set it up to receive ACH refunds. Please keep in mind that filing protests may increase your bond liability so communication with your surety provider is important.
IEEPA Tariffs Refunds – Justice Department Signals Battle and Refund Delays Ahead
The U.S. Department of Justice filed a brief Friday night in the Court of Appeals for the Federal Circuit signaling that the government has no intention of moving quickly to refund illegally collected IEEPA tariffs. A copy of the government’s brief may be downloaded here. Friday’s filing relates to the timing of the appellate mandate, which is what transfers the case back to the U.S. Court of International Trade for the next steps in the litigation, but regardless of the mandate maneuvering, the following “highlight”/”lowlight” quotations from the government’s filing ominously foretell fights ahead for importers and indicate that refunds will not be quick:
- “Plaintiffs again claim the Court should speed ahead, but lack any good reason for that departure from an orderly process.”
- “Plaintiffs claim speed is of the essence because they suffer harm from being “forced to operate” without refunds in the interim. Mot. 5. But a compensable monetary loss is a classic harm that can be remedied by payment of money with appropriate interest, and a plaintiff’s bare desire to be paid immediately is not a basis to demand this Court comply with his every whim.”
- “Plaintiffs also claim hasty issuance of the mandate is necessary to “facilitate the refund process” in cases that are in the CIT already. The coming process will take time. Cf. U.S. Shoe Corp. v. United States, 29 C.I.T. 866 (Ct. Int’l Trade July 27, 2005) (refunds took seven years to fully be provided after United States v. U.S. Shoe Corp., 523 U.S. 360 (1998), even though the amount of money at issue there was substantially less than the amount at issue here.”
- “If anything, the Court should withhold issuance of the mandate for 90 days to allow the political branches an opportunity to consider options.”
- “Complexity in the future counsels appropriately careful process, not breakneck speed. The Court should deny the motion and if anything, withhold the issuance of the mandate for 90 days after the Supreme Court sends down its judgment to this Court”
The government’s strategy appears to be to delay repayment as long as possible — until either the political climate shifts or a court forces its hand. To be sure, there are already several bills introduced in Congress but there is no veto proof support for such measures – at least not yet. This means that importers who have paid IEEPA tariffs should not expect voluntary, prompt refunds. Nor should they wait for clarity from the Executive Branch anytime soon. Instead, the path to recovery will likely require continued litigation and a direct court order from the U.S. Court of International Trade and importers should act accordingly.
NOTE: Despite press reports, the government’s argument that refunding these tariffs would be complicated or burdensome is simply gaslighting to help in its efforts to refuse refunds. U.S. Customs & Border Protection (CBP) already has pre-built trade remedy reporting tools in its ACE (Automated Commercial Environment) system that can identify exactly how much any importer paid in tariffs — by shipment or in total. In addition, CBP can create (as it did in the Section 301 litigation) specialized reports in ACE to readily identify the amount of IEEPA tariffs paid by importer (since such payments are associated with a “9903” tariff number reported by the importer at the time of importation). Indeed, as the screen shots below show, such reports already exist:
The same tools used for Section 301, 201, and 232 tariffs can be applied here to identify how much illegal IEEPA tariffs CBP collected from each importer. Technically, refunds are straightforward and CBP has previously issued mass refunds to many importers, such as when the Generalized System of Preferences (GSP) program historically lapsed and Congress reinstated the program. See here and note this quote (see purple in linked webpage) from the GSP refund process, as an example:
Duty Refunds
A. Automation
Recognizing the impact that retroactive renewal and consequent numerous re-liquidations will have on both importers and CBP, CBP developed a mechanism to facilitate refunds for entries submitted during the lapse period using the Special Program Indicator (SPI) for GSP (with the letter “A,” “A+,” or “A*”) as a prefix to the tariff number. We expect to begin automated processing of these shortly after the effective date.
Emphasis added. The obstacle is political will, not the mechanics of issuing automated refunds.
If you have any questions, please contact our office.