IEEPA Refunds: Government Appeals Refund Order as CAPE Phase 3 Approaches

Since the Supreme Court struck down the IEEPA tariffs in February, U.S. Customs and Border Protection’s Consolidated Administration and Processing of Entries (CAPE) system has moved steadily through its refund rollout — Phase 1 in April, Phase 2 for reconciliation entries at the end of June. But two developments over the past several weeks complicate that progress: the federal government has formally appealed the scope of the underlying refund order, and CBP has confirmed that the next phase of refunds will not be available to everyone.

For importers who have been waiting on the sidelines for CAPE to catch their entries automatically, this is the moment to reassess that strategy.

In late May and early June, the Department of Justice filed a notice of appeal with the U.S. Court of Appeals for the Federal Circuit, challenging the Court of International Trade’s order that all importers of record — not only those who filed suit — are entitled to IEEPA refunds. The government’s core argument is narrow but consequential: it contends that reprocessing “finally liquidated” entries (those past CBP’s 80-day reliquidation window) requires an importer-specific court order, not a blanket instruction covering every importer who paid the tariffs.

In other words, DOJ is not disputing that the IEEPA tariffs were unlawful. It is disputing who is entitled to get their money back without having gone to court.

The government has also indicated it will seek a stay of the refund order while the appeal proceeds — which, if granted, could pause refunds on finally liquidated entries for importers who never filed a CIT lawsuit.

CBP and the courts have effectively sorted affected entries into three buckets:

• Unliquidated or not-yet-final entries — unaffected by the appeal. These continue moving through CAPE Phase 1 as before.
• Finally liquidated entries with an active CIT lawsuit — also unaffected. These importers preserved their rights by filing and are on track to receive refunds regardless of how the appeal resolves.
• Finally liquidated entries with no CIT lawsuit on file — the group actually at risk. If the government’s position prevails on appeal, these importers may need to demonstrate they preserved their refund rights through a timely protest or lawsuit — and many will not have done so.

At a June 9 hearing before the Court of International Trade, CBP confirmed that CAPE Phase 3 — the phase covering finally liquidated entries — remains on track for late July 2026. That sounds like good news for the importers in the third bucket above. It comes with an important catch, however: the government has stated that Phase 3 refunds will be processed only for importers who have filed a lawsuit at the CIT.

Read together, the Phase 3 timeline and the pending appeal send the same message: importers who assumed CAPE would eventually reach every affected entry automatically should not count on that being true for finally liquidated entries. Filing a protective action at the CIT is increasingly looking less like a fallback option and more like a condition for recovery.

As of the most recent court filings, CBP has represented that more than $95 billion in IEEPA duties has been queued for refund through CAPE, with more than $40 billion actually disbursed by the end of June. Combined Phase 1 and Phase 2 coverage now stands at roughly $130 billion of the estimated $166 billion in total IEEPA duties collected — leaving a meaningful share of the total tied up in the finally liquidated category the appeal is fighting over.

• Identify whether you have entries that are finally liquidated (past CBP’s 80-day reliquidation window) and confirm whether those entries are tied to an active CIT lawsuit.
• If you have significant finally liquidated exposure and have not filed suit, evaluate filing a protective action at the CIT now — the two-year statute of limitations on IEEPA refund claims continues to run regardless of how the appeal plays out.
• Do not assume CAPE Phase 3’s late-July launch means automatic recovery; confirm your entries actually qualify under the litigant-only limitation CBP has described.
• Continue monitoring protest and liquidation deadlines even for entries you expect CAPE to eventually cover, since eligibility rules have shifted more than once already.
• Coordinate with your customs broker or trade counsel to assess whether pursuing both a CAPE claim and a CIT filing in parallel makes sense for your entry mix.

Not sure whether your finally liquidated entries are protected under the current refund order — or whether it’s time to file a protective action at the CIT? Alba’s customs brokerage and trade advisory teams are tracking the appeal and CAPE Phase 3 rollout closely and can help you assess your exposure. Contact your Alba representative to talk through your entry mix and refund strategy.

References

• Holland & Knight, IEEPA Tariff Refund Update: Government Appeals CIT Refund Order and the Road Ahead for Importers: https://www.hklaw.com/en/insights/publications/2026/06/ieepa-tariff-refund-update-government-appeals
• Jackson Walker, The U.S. Government Appeals IEEPA Tariff Refund Order — What Importers Need to Know Now: https://www.jw.com/news/insights-ieepa-refund-order/
• Green Worldwide Shipping, CAPE Phase 3 for IEEPA Tariff Refunds on Track for End of July as Federal Circuit Appeal Continues: https://www.greenworldwide.com/cape-phase-3-for-ieepa-tariff-refunds-on-track-for-end-of-july-as-federal-circuit-appeal-continues/
• Morgan Lewis, Tariff Refund Battle Continues: Government Appeals Order: https://www.morganlewis.com/pubs/2026/06/tariff-refund-battle-continues-government-appeals-order
• CBP, IEEPA Duty Refunds Guidance: https://www.cbp.gov/trade/programs-administration/trade-remedies/ieepa-duty-refunds