Okay, so we recognize that the historic record for Jim Croce actually singing about tariff refunds is a bit sparse, but bear with us here.
We have received numerous requests for guidance on Phase 1 of the CAPE system. CAPE is the platform that U.S. Customs and Border Protection (CBP) is beginning to use to process refunds of the IEEPA tariffs that the Supreme Court has ruled unlawful. Unlike standard tariff refunds, which generally are pursued through post-summary corrections or protests, refunds for entries that fall in Phase 1 must be sought through CAPE.
As importers prepare for the roll-out of the CAPE functionality within ACE, the online import and export processing system, scheduled to become available on April 20, 2026, there are two key points to keep in mind:
- First, Phase 1 is intentionally limited to the cleanest set of entries — those that do not present meaningful appeal or procedural complications. CBP has deliberately excluded categories in which liquidation may legitimately need to be delayed, such as entries under protest, entries under reconciliation, and entries subject to antidumping or countervailing duty orders.
- Second, refunds will not be issued automatically. Unless importers carefully follow the exact instructions put out by CBP, they will not receive refunds. If a submission contains even a single error, CBP will return the entire matter to the importer and require a corrected spreadsheet. In other words, the system is set up to require careful and accurate input. It accordingly is essential for importers to carefully work through CBP’s new guidance, including its new IEEPA Refunds Page and CSMS # 68340863 – UPDATE – Consolidated Administration and Processing of Entries (CAPE) for IEEPA Refunds, April 20, 2026, Deployment.
Although CBP has now issued guidance, we anticipate that additional issues and unforeseen glitches may emerge once the system is implemented. Based on what we know now, we recommend the following steps:
1. Prepare to file through the ACE Portal using the CAPE system
Importers of record or authorized brokers will submit CAPE Declarations identifying the affected entries. Each declaration may include up to 9,999 entries, and companies may submit multiple declarations if necessary. Importers should therefore familiarize themselves with the process by reviewing the materials linked above and take certain steps, including the following:
- ensure that the importer of record or its broker has active ACE Portal access;
- determine who will be responsible for filing CAPE declarations; and
- coordinate with customs brokers regarding roles, timing, and data submission responsibilities.
2. Compile the entry data needed for CAPE filings
CAPE declarations require a list of entry numbers and related entry summary information for the affected imports. ACE will validate both the declaration file itself and the individual entries before processing refunds. Errors or inconsistencies in entry data may delay or prevent refunds, as they will result in the entire submission being kicked back for error correction.
Some practical steps here include:
- preparing to extract and reconcile all entry numbers where IEEPA duties were paid;
- confirming that those entries contain the relevant Chapter 99 IEEPA tariff codes; and
- working with brokers to ensure that internal entry data matches the information reflected in ACE.
3. Confirm refund payment setup (ACH enrollment)
CBP will issue refunds electronically through the Automated Clearinghouse (ACH) system. Refund payments will generally be issued to the importer of record or the designated party enrolled in ACH. Because electronic refunds are required for Phase 1 entries, you should confirm that your electronic payment information is complete and accurate. If your ACH enrollment information is incomplete or outdated, refund payments may be delayed — or may not be processed at all.
4. Monitor entry liquidation status
Eligibility for Phase 1 processing depends heavily on the liquidation status of the entries. Phase 1 is focused on unliquidated entries or entries within the 90-day voluntary reliquidation window. Entries outside those categories may require different procedures or may ultimately require judicial resolution.
Thus, importers should identify which entries fall into the following categories:
- unliquidated entries;
- recently liquidated entries within the 90-day reliquidation period;
- entries currently under suspension or review; and
- entries that are not eligible for Phase 1 because they require future manual review or completion (reconciliation entries, AD/CVD entries, entries under protest, etc.).
Importers should track liquidation timelines carefully to determine which entries can be included in CAPE declarations.
5. Review whether existing protests should be withdrawn
For entries where a protest was filed solely to challenge IEEPA duties, CBP has indicated that those protests may be withdrawn so the entry can be processed through CAPE. Importers should accordingly identify entries where IEEPA-related protests are currently pending and determine whether withdrawing the protest and proceeding through CAPE would allow faster refund processing.
6. Plan for consolidated refunds rather than entry-by-entry payments
CAPE is designed to allow CBP to aggregate refunds across multiple entries. Refunds therefore may be issued as consolidated payments covering numerous entries, rather than separate payments for each entry.
Because refund payments will arrive as large, consolidated amounts rather than entry-level checks, it will be necessary to coordinate with internal finance and accounting teams to reconcile refund payments against the underlying entry lists.
Against this background, here are the most common questions that we are getting:
CAPE FAQ #1: Should we use CAPE even if we filed a CIT protective action?
Response: Yes, wherever possible. CAPE is the fastest administrative path to actually receiving refunds for entries that are unliquidated or still within the ninety-day voluntary reliquidation period. The purpose of a protective CIT filing is not to bypass the administrative process where it works. Rather, it is to ensure that companies preserve their rights in situations where the administrative process may not provide complete relief. As noted above, Phase 1 of CAPE is intentionally limited to a subset of entries, and we do expect litigation on other items. But for now, CBP estimates that around 63% of all entries fall into Phase 1. Which means that importers should grab the two-thirds of a loaf CBP is offering while the mechanism to receive the slices of bread in the final third are still being considered.
CBP’s current guidance indicates that entries under protest are not eligible for Phase 1 CAPE processing. As a result, companies that have filed protests covering IEEPA duties will need to decide whether to maintain those protests or withdraw them in order to allow the entries to move through CAPE.
CAPE FAQ #2: What should we do if we have protested certain entries that otherwise would fall into Phase 1?
Response: For entries where the protest was filed solely to preserve IEEPA refund rights, CBP has indicated that companies may wish to consider withdrawing the protest so that the entries can be processed through CAPE. In some cases, protests may currently be suspended, in which case the importer may first need to request that the suspension be lifted before the protest can be withdrawn.
From a practical standpoint, the decision often comes down to what the protest is actually protecting:
- If the protest was filed only to preserve the IEEPA refund issue, withdrawing the protest and proceeding through CAPE may allow the refund to be processed more quickly.
- If the protest covers other issues beyond IEEPA duties (for example, classification, valuation, or other duty issues), companies should carefully evaluate whether withdrawing the protest would inadvertently waive those claims.
CAPE FAQ #3: Who should file the CAPE declaration — the importer or the customs broker?
Many importers are asking whether the CAPE declaration should be submitted by the importer of record or by the broker that filed the entries. In practice, either may file, but companies should coordinate carefully to ensure that filings are complete and not duplicative. Please note that attorneys are notallowed to file.
CAPE FAQ #4: What happens if our CAPE declaration contains errors?
ACE will validate entries, and errors may result in rejections or delays. Importers should reconcile entry lists carefully with brokers before submitting declarations.
CAPE FAQ #5: How long will it take to receive refunds after filing CAPE declarations?
CBP has suggested a rough processing timeframe, but actual timing will depend on entry validation, liquidation status, and refund processing capacity. The key step — how long it will take CBP to validate all uploaded spreadsheets — is the key unknown, which makes the timing representations put out by CBP not particularly meaningful.
CAPE FAQ #6: Will CBP offset refunds against other duties or debts?
Possibly. Under CBP’s normal procedures, the agency has authority to offset refunds against other duties, taxes, or fees that it determines are owed. In other words, if CBP identifies an underpayment on an entry or another obligation owed by the importer, it may apply a refund to that obligation rather than issuing the full refund amount.
CBP’s CAPE guidance goes a step further. As a condition of submitting a CAPE declaration, CBP requires the filer to agree that any resulting refunds may be subject to such offsets. In effect, companies using CAPE must acknowledge that CBP may apply refunds to other outstanding liabilities.
From a legal standpoint, this requirement raises some questions. The IEEPA duties at issue were collected without lawful authority, and it is therefore debatable whether those funds should be treated as available for debt-collection offsets against unrelated obligations. Put differently, an unlawfully collected tariff arguably should not function as a general debt recovery mechanism.
That said, as a practical matter, companies that wish to use CAPE to obtain refunds for Phase 1 entries may have little realistic choice but to accept this condition. The CAPE declaration requires agreement to the offset provision, and refusing to agree would effectively prevent the importer from using the system.
Accordingly, importers should assume that refunds processed through CAPE may be subject to offsets and should plan accordingly when estimating the timing and amount of expected refund payments.
That’s where things currently stand. Beginning April 20, 2026, CBP appears poised to begin collecting the information necessary to initiate the refund process for the “cleanest” entries. Still, we can’t help but return to how Jim Croce might have finished his song if he were in fact writing it today:
Uptown’s got importers,
The docks have their brokers and bums.
And down at CBP they’ve got ol’ CAPE running,
For the refundin’ sons of a gun.
Yeah, it’s big and complex as a system can come,
And it’s stronger than a country hoss.
And when the trade folks all get together at night,
You know they all call CAPE “Boss,” just because.
Now they say:
You don’t tug on CBP’s CAPE,
Trust refunds to CBP’s whims.
You don’t protest your Phase 1 entries,
Or your refunds will be slim.
Well, outta the trade bar came a country lawyer,
He said, “I’m lookin’ for refunds from CBP.
I’m a tariff-fightin’ guy, middle name’s 1581(i),
And my clients said get what’s owed to me.”
“Yeah, I’m lookin’ for that guy whose nickname is Big ACE,
I hear he’s the king of the refund track.
Last year ACE took my client’s money,
And it may sound funny, but I came to get that money back.”
And everybody said, “Jack, uh, don’t you know…
You don’t tug on CBP’s CAPE,
Trust refunds to CBP’s whims.
You don’t protest your Phase 1 entries,
Or your refunds will be slim.
Well, a hush fell over the trade bar,
When ACE came strollin’ in off the street.
And when the filings were done,
The only thing that wasn’t messy was the soles of the big man’s feet.
The entries were sliced in a hundred places,
And ACE kicked a few back for review.
And you better believe offsettin’ told a different story,
When the refunds they came through.
And don’t you know:
You don’t tug on CBP’s CAPE,
Submit your spreadsheet, make your case.
You don’t protest your Phase 1 entries,
And you don’t mess around with ACE.
