Key Takeaways
- U.S. Customs and Border Protection (CBP) will launch Phase 1 of CAPE on April 20, giving many importers their first access to the ACE-based path to request IEEPA duty refunds. More complicated entries – including those involving certain AD/CVD orders, protests, drawback, reconciliation and liquidated entries that are more than 80 days past liquidation – remain outside Phase 1 or will follow a different timeline.
- Importers and brokers should act now to confirm ACE portal access, ACH/electronic refund enrollment, U.S. bank account information and entry eligibility before submitting CAPE declarations. CBP also has made clear that filers may not initiate an IEEPA refund request through a Post Summary Correction (PSC).
- Timing of refund declaration processing will vary. For many standard accepted entries, CBP guidance indicates refunds may issue roughly 60 to 90 days after CAPE declaration acceptance, but more complex categories are likely to take longer.
- As the refund process matures, a secondary market for IEEPA refund claims is developing, and buyers and sellers should evaluate claim status, litigation posture, transfer documentation and payment timing before trading.
As previously alerted, CBP will launch Phase 1 of the Consolidated Administration and Processing of Entries (CAPE) through the ACE Secure Data Portal on April 20. CAPE provides an electronic pathway to request refunds of duties imposed under the International Emergency Economic Powers Act (IEEPA) and is designed to streamline validation, processing and payment on a consolidated basis.
How the CAPE Filing Process Will Work
Importers of record (IOR) and authorized customs brokers that filed on behalf of IORs may submit a CAPE Declaration through the CAPE tab in ACE. Brokers may not request refunds for importers for which they did not file the underlying entries for which refunds are being requested. Other parties also may not file on behalf of the importer. To file a declaration, the importer will upload a Comma-Separated Values (csv) file listing up to 9,999 entry numbers for which IEEPA duties have been paid. No entry-related information should be included in the file, only the entry number. Entries submitted on a single declaration are limited to entries for a single IOR, but importers may submit multiple declarations where necessary.
The CAPE system applies a two-step validation process. It first validates the IEEPA refund declaration itself – checking format, filer authority and completeness. Declarations that fail the first validation must be corrected and re-uploaded in ACE before the system can proceed to the second validation step. After the declaration passes the first validation step and the CAPE system issues the declaration a claim number, the CAPE system then validates each entry summary, confirms that the entry exists in ACE, and that it includes applicable IEEPA duties, and is not duplicated. If an entry fails validation, the CAPE system may reject that entry while continuing to process the remaining entries in the declaration. Importers can then address entry-specific validation issues on an individual basis.
For accepted entries, ACE will remove the applicable IEEPA Chapter 99 duty lines, recalculate duties without those duties, and process refunds (including interest where applicable). CBP has stated that refunds will be consolidated by recipient and may be subject to offsets for unpaid debts.
PSC Clarification
A PSC is typically used to correct entry summary data in ACE. For IEEPA refunds, however, CBP has drawn a clear line: filers may not use a PSC to initiate an IEEPA duty refund request.
If a PSC is required for another reason – such as correcting entries tied to duty-free treatment due to the lapse of AGOA or Haiti HOPE/HELP or addressing other non-IEEPA issues – it should be filed before submitting a CAPE declaration.
This distinction is important. PSCs remain part of the compliance toolkit, but CAPE is the exclusive mechanism for initiating IEEPA refund claims.
Phase 1 Is a Meaningful Start, But It Is Not the Whole Program
CAPE’s launch represents a significant operational step, but Phase 1 is only the first phase of a broader rollout.
Phase 1 generally covers (1) most unliquidated entries and (2) entries within approximately 80 days of liquidation.
CBP’s April 14 filing before the U.S. Court of International Trade confirms that Phase 1 primary development is complete and that the system has moved into performance and scenario-based testing. CBP estimates that the Claim Portal is 95% complete; Mass Processing is 85% complete; Review and Liquidation/Reliquidation is 90% complete; and Refund is 90% complete.
At the same time, more complex claim categories remain outside Phase 1 or will be addressed later. These include certain entries involving AD/CVD, open or suspended protests, drawback claims, reconciliation and finally liquidated entries, along with other scenarios CBP has reserved for subsequent development.
Refund Timing, Potential Delays and Filing Strategy Considerations
Timing will depend on the status of each entry. For many standard Phase 1 entries, CBP’s recently issued Cargo Systems Messaging Service guidance indicates that:
- After the mass processing of CAPE declaration entries is complete, unliquidated entries generally will be set to liquidate approximately 45 days after the CAPE declaration acceptance date;
- Individual entry summary refunds will be consolidated by IOR and liquidation date before they are dispersed in a lump sum; and
- Refunds may be issued roughly 60 to 90 days after acceptance of an IOR’s CAPE declaration.
Entries in suspended, extended or under-review status will not follow this timeline, and warehouse entries are handled differently.
For more complex categories, timing is less predictable. CBP has indicated that certain entries – particularly those subject to AD/CVD – may require manual, entry-by-entry processing, which could significantly extend processing timelines.
A Practical Word of Caution
Importers should be prepared for the possibility that CAPE may experience heavy traffic or processing friction immediately after launch. For companies that are not constrained by near-term liquidation, protest or other claim-preservation deadlines, it may be worth considering whether to avoid filing in the first few days of the rollout to reduce the risk of technical issues, validation problems or queue-related delays.
What Importers Should Be Doing Now
Importers and brokers should take the following practical steps now to prepare:
- Confirm ACE Portal access and internal user permissions;
- Confirm ACH/electronic refund enrollment;
- Verify U.S. bank account information;
- Identify entries eligible for Phase 1 and screen out those likely to be excluded or deferred;
- Address non-IEEPA corrections, including PSCs where appropriate, to allow time for those corrections to be applied to entries before filing CAPE declarations; and
- Evaluate whether protests or litigation may be necessary to preserve rights for certain claims.
Claims Trading and Liquidity Considerations
A market has developed for the purchase, sale and re-sale of IEEPA refund claims.
Prospective sellers and buyers should consult counsel before engaging brokers or traders. Trade and transfer documentation is highly specialized and may include seller representations and indemnities that may not be apparent to the sellers when negotiating preliminary agreements or letters of intent. Newly arrived Polsinelli Shareholder, David Karp, is well-positioned to advise clients on claims trading and liquidity considerations, including structuring and executing transactions involving IEEPA refund claims.
Bottom Line
The April 20 CAPE launch is a significant milestone, but it marks the beginning of operational refund processing, not the end of the IEEPA refund process. CBP will maintain all information on IEEPA Refunds and CAPE at the IEEPA Duty Refunds page.
Importers should move now to confirm readiness, understand that PSCs cannot be used to initiate refund claims, and evaluate whether timing, litigation or liquidity considerations warrant a more strategic approach to filing.
For companies and funds exploring monetization, the developing secondary market may present opportunities, but structure, diligence and documentation remain critical.
