CBP to Launch Phase 3 of CAPE Processing for IEEPA Refunds on October 6th
Executive Overview
U.S. Customs and Border Protection (CBP) is scheduled to deploy Phase 3 of the Consolidated Administration and Process of Entries (CAPE) system in the Automated Commercial Environment (ACE) on October 6.
This deployment represents a major milestone in executing tariff refund distributions under the International Emergency Economic Powers Act (IEEPA). Phase 3 specifically addresses finally liquidated entries filed by court plaintiffs for which the U.S. Court of International Trade (CIT) has issued reliquidation orders.
What Does "CIT Reliquidation Order" Mean? Do You Need to Be a Plaintiff?
A central question among trade compliance professionals is whether Phase 3 requires an importer to have filed an active court case at the CIT. Under current government policy, the answer for Phase 3 is YES.
Understanding the Legal Mechanics
Liquidation: Under 19 U.S.C. § 1501, when goods enter the U.S. and CBP assesses duties, the entry becomes "finally liquidated" after 90 days if no administrative protest is filed. Once finally liquidated, the transaction is legally closed.
The Legal Bottleneck: Even after IEEPA duties were invalidated, CBP lost the administrative statutory authority to unilaterally reopen or refund entries once they became finally liquidated.
The Court Order: To bypass this administrative barrier, CIT Judge Richard Eaton issued judicial orders directing CBP to reopen ("reliquidate") finally liquidated entries and strip out the unlawful IEEPA duties. However, the U.S. Department of Justice contends these court orders apply strictly to designated plaintiffs who filed lawsuits in the CIT.
Protests vs. CIT Lawsuits: "Stopping the Clock"
For importers holding entries that were liquidated within the past 180 days but are not currently named in a CIT court order, filing a Customs Protest (CBP Form 19) serves as a vital strategic shield.
Stopping the Clock: Filing a timely CBP Form 19 suspends entry finality while CBP reviews the protest.
The Luxury of Waiting: Preserving entry rights via protest gives importers the luxury of time—allowing them to observe how overarching court appeals and class-action motions progress before expending the legal capital required to file a formal summons and complaint in the CIT.
Key Eligibility & Participation Deadlines
According to official court filings submitted by CBP:
July 30 Benchmark: Plaintiffs who submitted a valid Importer of Record (IOR) number to CBP on or before July 30 will be permitted to file Phase 3 CAPE declarations starting October 6.
Late IOR Submissions: Importers who provided their IOR details after July 30 will receive separate instructions from CBP at a later date.
Non-Litigants without Protests: Importers who neither filed a CIT lawsuit nor preserved entry rights via protest currently fall under CBP's strictly enforced policy for finally liquidated entries: "No lawsuit, no refund."
Program Progress & Pending Refunds
Since CAPE was launched in ACE on April 20, the scale of refund processing has reached unprecedented numbers:
Total Entries Processed: ~27.2 Million entries
Total Value (Potential & Certified): $134.7 Billion
Unclaimed / Blocked Refunds: $1.3 Billion (~20,184 individual refunds)
Why $1.3 Billion in Refunds Remains Blocked
As of mid-September, over 20,000 refunds totaling $1.3 billion could not be transmitted by CBP to the U.S. Department of the Treasury. The sole reason for this delay is that importers have not provided Automated Clearing House (ACH) direct deposit details or failed to submit an authorized CBP Form 4811 (Authorization to Receive Distribution to a Designated Agent).
Action Checklist for Importers and Customs Brokers
Verify Lawsuit & IOR Status: Confirm with legal counsel whether your entries are covered by a CIT lawsuit and if your IOR number was submitted prior to July 30.
File Form 19 Protests to "Stop the Clock": For entries liquidated within the last 180 days, file protests to preserve your refund rights and delay the need for immediate CIT litigation.
Update Direct Deposit / ACH Details: Register or update ACH direct deposit details in ACE to avoid payout delays.
File CBP Form 4811: If designated customs brokers or agents are authorized to receive refund checks/transfers, ensure Form 4811 is actively on file.
Official CSMS & Industry Chatter Status
CSMS Bulletin Status: CBP has not yet issued a formal Cargo Systems Messaging Service (CSMS) release for Phase 3. CBP traditionally issues formal CSMS messages alongside technical ACE CATAIR guidelines closer to or on the launch date.
Source Validation: The October 6 launch date is established by a formal court declaration filed by Brandon Lord (CBP Executive Director of Trade Programs) with CIT Judge Richard Eaton, alongside trade legal analysis from Sandler, Travis & Rosenberg, P.A. and reports from the NCBFAA.
References & Sources
U.S. Court of International Trade (CIT) Declaration:
Declaration of Brandon Lord, Executive Director of Trade Programs, U.S. Customs and Border Protection, filed Sept. 15 in the Court of International Trade (Judge Richard Eaton).
Link: CourtListener CIT Filing Docket PDF
