The compliance side of the trade world has been extremely busy lately, and there are a few important updates every importer should be paying attention to right now. We sat down with our VP of Trade Compliance, Shannon Dillinger, to learn about the latest tariff news. Here, we’ll share her insights and tips to give you the best chance to secure your refunds.
With the Supreme Court ruling that tariffs previously implemented under the International Emergency Economic Powers Act (IEEPA) are illegal, importers may be eligible for duty refunds. Customs and Border Protection (CBP) officially ended IEEPA duty collections on Feb. 24. The Court of International Trade (CIT) is allowing CBP a 45-day grace period to begin developing a process for ACE IEEPA refunds. The current recommendation is a new ACE functionality that will be called the Consolidated Administration and Processing of Entries (CAPE) and will serve as the entry point for importers and customs brokers to submit their IEEPA refund requests.
To prepare for the refund process, your Customs Broker should help you compile a list of all your entries impacted by IEEPA. This will help you quantify the potential impact and refund exposure for your business. It is essential to have your entries documented to give yourself a full picture and ensure you don't miss any potential refund opportunities.
"Every one of our brokerage customers that we've handled an entry for that contained IEEPA tariffs has now received a summary report from us, letting them know the potential impact for refunds, as well as communication about what steps they should be taking,” Shannon shared.
Once you have your entries documented and have identified the tariff impact, here is what you need to do to set your business up for success.
Immediate Next Steps:
Don’t wait! Even though the official refund portal is not operational at the time of this writing, the more proactive you can be, the better your chances will be at actually securing your refunds.
We are still waiting for CBP’s CAPE portal to be finalized and go live, and for CBP to issue a recommendation on the refund process to CIT. There are approximately 30 days left in that window. Once we know more, the next step will be for importers to execute on final instructions and get their applications filed so they can begin to receive those funds back.
Shannon explains the current landscape:
"We are seeing a lot of Section 301 investigations being initiated. Our read is that the government is going to try to use this as the replacement for the IEEPA tariff that existed and all the free trade agreements that were reached with various countries — using Section 301 as a new means to collect money," Dillinger said.
It takes longer for Section 301 to go through and get implemented. The short timeline is three months, but it's not unlikely for it to last as long as 18 months until the full investigation and scope order is put out.
Prepare for potential IEEPA refunds now, don't wait for the situation to evolve further before taking action.
Shannon advises: "My recommendation to any importers that I'm talking with that are actively shipping is to take advantage of the current situation and build your inventory while you're only looking at 10% for Section 122."
The sooner you get your entries documented and your refund applications in order, the better positioned you'll be for what's ahead.
Not currently using UWL for customs brokerage? This is exactly the kind of situation where having the right partner makes a difference. Reach out to our team at compliance@worldgrouplogistics.com — we'll be happy to walk through your exposure and make sure you're prepared to secure your refunds.