On March 4, the U.S. Court of International Trade (CIT) issued a significant order regarding the refund of tariffs recently ruled invalid by the Supreme Court. In Atmus Filtration, Inc. v. United States, the CIT ordered U.S. Customs and Border Protection (CBP) to refund tariffs charged under the International Emergency Economic Powers Act (IEEPA). Specifically, the CIT required CBP to liquidate unliquidated entries and reliquidate non-final entries without applying IEEPA tariffs. “Liquidation” is the process by which import duties are finalized by CBP and typically occurs within 314 days of when the goods enter the country.
This ruling also underscores the CIT’s authority to issue nationwide relief. The CIT has indicated that Judge Richard Eaton will be the sole judge hearing cases involving IEEPA refunds. More than a thousand such cases have been filed in recent weeks.
While this order gives importers some hope that IEEPA refunds will be processed without the need for thousands of individual lawsuits, the Administration is expected to appeal — forcing further delays in resolving these issues. The CIT has scheduled a conference in the Atmus case this coming Friday, March 6, which may shed additional light on the Administration’s next steps.
In certain scenarios, an importer may also consider filing a protest with CBP or initiating a lawsuit before the CIT. Warner attorneys are assisting our clients in evaluating those options to determine the best path forward.
Warner’s Tariff Team will also continue monitoring these developments. While the refund process is being established and suppliers assess how to proceed, they should also consider taking affirmative steps to be ready for whatever comes next, including:
- Gathering import paperwork showing the amounts and dates of IEEPA tariffs that were paid.
- Assessing all of your entries for correctness to ensure HTSUS codes, country of origin, applicable duties and amounts paid, etc. are as they should be.
- Opening an Automated Commercial Environment (ACE) account if you do not already have one. An ACE account provides better visibility into your tariff payments and should also allow you to register to receive ACH payments — the method CBP earlier indicated it would use to process refunds.
- Reviewing customer and supplier contracts addressing tariff payments to determine what, if any, obligations you may have to your customers who have reimbursed tariff costs if refunds are issued and what, if any, obligations your suppliers have to you if you reimbursed tariff costs and refunds are issued.
- Taking care in new contracts and commercial arrangements with your customers and suppliers to fully consider your and your supply partners’ rights and obligations regarding tariffs, including potential refunds.
