Following the Supreme Court's ruling on the illegality of the International Emergency Economic Powers Act, one of the importers' biggest concerns is when they will receive refunds for the tariffs they paid.
"Importantly, the Court did not rule on refunds for importers; it affirmed the [U.S. Court of Appeals for the Federal Circuit] solely on IEEPA's scope and remanded to the Court of International Trade to consider a nationwide injunction," said Denise Calle, a customs trade attorney at Olsson Frank. "The Court did not establish a refund mechanism or direct the lower courts or CBP how to unwind past collections of duties. Those questions will likely be sorted out by the CIT and potentially by agency guidance, or perhaps Congress."
Indeed, the ruling didn't provide any timelines for when importers might receive refunds, and some have said the refunds may take a while to process. But others said there has been precedent to disperse refunds quickly, including how they were handled after retroactive reauthorizations of the Generalized System of Preferences benefits program.
In the GSP program, the federal government offered refunds dating back several years and worth several billion dollars, said Scott Lincicome, vice president of the Cato Institute's general economics division, as well as its Stiefel Trade Policy Center. "They could effectively do something very similar. All they would really need to do is declare all of the entries unliquidated or re-liquidated. ... Customs acted quite quickly to get that done, and then it just took a few months for Customs to issue refunds."
Dan Anthony, executive director of the advocacy group We Pay the Tariffs, said eligible companies received their refunds under GSP within about three weeks. "Your precedent here is programs where Congress enacted laws that said you will liquidate or re-liquidate the entry as if it was never subject to this in the first place," he said. "That is the very simple language that could be used."
CBP technically has the information it needs to issue refunds, according to Mollie Sitkowski, a customs attorney with Faegre Drinker. However, the question remains when they might do so, she said. "I think that they're probably going to try and make people jump through at least some hoops to get the refunds. But we just don't know what kind of process that will be."
Sitkowski suggested that importers monitor their liquidation dates and file protests if any are nearing the protest deadline after liquidation. That could be the method by which refunds are issued, but it's still unclear, she said. "We have been doing this on behalf of clients since November, and CBP has suspended the protests in line with our request. So we think it's a possibility, and it's a good way to kind of approach refunds with a belt and suspenders."
Another possibility, although one that Sitkowski doesn't think is imminent, would be refunds designated through the Court of International Trade or CAFC. "There is a lot of hullabaloo about filing a court case, and if you haven't filed, you are precluded now, or you file it and then you get first in line for refunds," she said. "We don't think that's supported by precedents, the law, etc., but we don't foreclose the possibility that it might be required when the CIT or the CAFC does fashion a refund process."
Regardless of what action CBP takes, it "will do exactly what is required and directed of them to do so by the court," since it's the enforcement agency and the administrator of tariffs and duties, said Lenny Feldman, managing partner at Sandler Travis. He also serves as general counsel and customs counsel for the National Customs Brokers & Forwarders Association of America.
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