US Customs and Border Protection opens the third and hardest phase of its emergency-tariff refund program on October 6, unlocking an estimated 11.4 billion dollars in finally liquidated entries. Only importers who sued can walk through the door.
WASHINGTON, October 3, 2026
The largest customs refund operation in American history enters its final and most contested phase on Tuesday, when US Customs and Border Protection activates Phase 3 of its Consolidated Administration and Processing of Entries system, opening electronic refund filing for entries that have already finally liquidated.
The milestone, confirmed in agency guidance circulating through the trade bar over the past 48 hours and detailed in filings and advisories published this week, caps a process that has already moved roughly 122 billion dollars in certified refunds and interest to the Treasury for disbursement. What remains is both smaller in dollar terms and far harder to claim, and the eligibility rules governing it have drawn sharp criticism from importers who did not file lawsuits.
The short version for anyone managing a customs ledger: if your company sued, Phase 3 is a meaningful opportunity opening in days. If it did not, the window may be closing, and in some cases it could close as early as February 2027.
How the money got here
The refunds trace to the Supreme Court’s February 20, 2026 ruling that the International Emergency Economic Powers Act does not authorize the imposition of tariffs. That decision invalidated the so-called Liberation Day duties and the sequence of emergency actions built on the same authority, which together had collected roughly 165 billion dollars from US importers.
Striking down a tariff is legally straightforward. Returning the money is not. Customs entries do not sit in a single ledger awaiting reversal. They move through a lifecycle: entry summary, payment, and then liquidation, the formal event at which CBP fixes the final amount of duties owed. Once an entry finally liquidates, which generally occurs 314 days after entry and becomes unassailable roughly 180 days after that absent a protest, the agency takes the position that it lacks authority to reliquidate without a court order.
That mechanical distinction, between entries still within the liquidation or protest window and entries that have passed beyond it, is the fault line running through the entire refund program. CBP built CAPE to handle the first category at scale. Phase 3 is its attempt to handle the second, and it can only do so where a court has told it to.
The numbers as of now
Agency data current to September 11, 2026 and reported in trade press and client advisories this week give the clearest picture available.
Roughly 134.7 billion dollars in claims have been accepted into the CAPE system through Phases 1 and 2. Of that, approximately 122 billion dollars, inclusive of interest, has been certified and transmitted to Treasury for payment. More than 201,000 CAPE declarations have been accepted out of over 286,000 submitted, covering approximately 27.2 million individual entries.
The pace, however, has fallen sharply. Treasury disbursements ran at 49.1 billion dollars in June. By August the monthly figure had dropped to 10.5 billion. Actual IEEPA refunds paid out as of September 11 stood at only about 22 million dollars by one accounting of the narrowest refund category, a reminder that certification and disbursement are different events and that the gap between them has real cash-flow consequences.
Roughly 1.3 billion dollars sits certified but untransmitted for a reason that is entirely within importers’ control: missing or stale Automated Clearinghouse banking details in CBP systems. That is money the government has agreed to pay and cannot deliver.
Phase 3 itself addresses approximately 11.4 billion dollars, about 6.9 percent of total IEEPA duties collected.
Who qualifies on October 6
CBP has set three cumulative conditions for Phase 3 filing, and the conjunction is where most importers fall out.
First, the entry must have completed final liquidation. Entries still within the ordinary liquidation or protest cycle are handled through earlier CAPE phases and do not belong in Phase 3.
Second, the filer must be a plaintiff in an active refund case at the US Court of International Trade. This is the condition that excludes the large majority of affected importers.
Third, the specific entry must fall within a court reliquidation order. Being a plaintiff is not sufficient if the relevant order does not reach the entry in question.
A fourth, procedural requirement applies to the opening day. Importers seeking to file when Phase 3 goes live must have submitted a valid importer of record number to CBP by July 30, 2026. Those who did not will require additional instructions from the agency, and CBP has not published a timeline for issuing them.
Brandon Lord, executive director of CBP’s Trade Programs Directorate, framed the limitation narrowly in a declaration filed September 15, stating that phase adjustments would cover only those entries for which the CIT ordered reliquidation without IEEPA tariffs. That is the agency’s consistent position: it is implementing court orders, not administering a general refund entitlement.
Only the importer of record, the party that actually paid the duties to CBP, can claim. That category can include non-US exporters acting as non-resident importers, and customs brokers filing on behalf of an importer of record, but it does not include a purchaser who absorbed the duty through a supplier’s price.
The two-class problem
The practical effect of the eligibility rules has been to split the importing community into two groups with sharply different prospects.
Litigants are recovering. Companies that filed suit at the CIT, whether individually or as part of the consolidated proceedings, now have a defined path for finally liquidated entries beginning October 6.
Non-litigants are waiting on appellate outcomes that have not arrived. Their position depends on a Federal Circuit appeal of the CIT’s order granting universal relief, filed May 29, 2026, for which no argument date had been announced as of mid-September. It also depends on the pending class-certification decision in V.O.S. Selections, Inc. v. United States, argued August 6 and still undecided.
The Justice Department’s position in the appeal is that the courts lack jurisdiction to order refunds universally, and that relief should run only to the parties before the court. If that argument prevails, the line between litigants and non-litigants hardens permanently.
The market noticed the incentive. Bloomberg Law reported more than 200 new refund suits filed after July 20, 2026, against a baseline of roughly 35 a week or fewer through most of June. More than 3,700 refund cases have been transferred into the lead case, Freestyle World, Inc. v. United States.
Pete Mento, a managing director at Baker Tilly, captured the qualified nature of the development in comments to trade press, saying that for businesses waiting on finally liquidated IEEPA entries this is a meaningful development, and adding that litigation status and the applicable court orders still matter.
The deadline nobody is watching closely enough
Buried in the procedural detail is a date that deserves more attention than it has received. Refund actions brought under the CIT’s residual jurisdiction provision carry a two-year statute of limitations. For some entries, practitioners calculate that the limitations period could expire as early as February 2027.
For an importer sitting on material finally liquidated entries and no lawsuit, that is the governing constraint. Waiting for the Federal Circuit to decide the universal-relief appeal, or for the class-certification ruling, carries the risk that the limitations clock runs out first. Trade counsel have been uniform on this point in advisories published over the past week: companies cannot assume that class status, if eventually granted, will preserve rights that have already lapsed.
What importers should do before Tuesday
Trade advisers have converged on a short list of actions, several of which can be completed in a day.
Reconcile the ledger first. Pull ACE reports covering IEEPA duties paid and match them against CAPE acceptances. Many importers have not confirmed which of their entries are already in the system and which are not.
Verify ACH information. The 1.3 billion dollars sitting undelivered for want of current banking details is the easiest money in the entire program. Confirm that the account on file with CBP is correct and active.
Categorize entries by liquidation status. Entries liquidated within the last 80 days sit in a different posture than finally liquidated entries, and the filing path differs accordingly.
Assess litigation economics for finally liquidated exposure. For a company with several million dollars of finally liquidated IEEPA duties and no pending case, the cost of filing is small relative to the exposure and the limitations clock is running.
Review contracts. Duty surcharge clauses, customer pass-through arrangements and representations made in merger and acquisition documents all interact with refund entitlements. Where an importer recovered a duty it had already passed through to customers, the commercial question of who owns the refund is live and increasingly litigated in commercial courts.
Confirm Phase 3 readiness. Litigating importers should verify that their importer of record number reached CBP by the July 30 cutoff, since that determines whether they can file on day one or must wait for supplemental guidance.
What the refunds do not cover
Importers should not mistake the IEEPA refund program for broad tariff relief. The invalidation of the emergency-powers duties did not reduce overall US tariff exposure, and in several respects exposure has increased since.
Section 301 forced-labor duties of 10 and 12.5 percent took effect July 24, 2026 on goods from 60 economies covering about 99.4 percent of US imports. Those duties are themselves under challenge at the CIT, argued September 30, but they are being collected now and are not refundable unless and until a court says otherwise.
Section 232 national-security tariffs are untouched by the IEEPA ruling and remain fully in force. Steel, aluminum and copper duties now apply to full customs value following a restructuring proclamation. Semiconductors carry 25 percent. Patented pharmaceuticals and active pharmaceutical ingredients carry a headline rate of 100 percent, extended on September 29 to companies outside the original annex list. Polysilicon, wafers, solar cells and modules will carry 15 percent plus minimum import price floors beginning December 4. None of these are refundable.
The Section 122 balance-of-payments surcharge of 10 percent expired by operation of law on July 24, 2026, and was held unlawful as to three plaintiffs on May 7. That ruling is on appeal and the refund posture for Section 122 collections remains unsettled.
Costs are rising at the margin as well. The Merchandise Processing Fee adjusted on October 1 under fiscal-year inflation rules, with the minimum rising to 34.58 dollars and the maximum to 670.86 dollars per entry. The ad valorem rate held at 0.3464 percent and the Harbor Maintenance Fee was unchanged.
The broader fiscal picture
The refund program has done something unusual to federal revenue accounting. Tax Foundation analysis of Treasury data found that refunds have more than offset collections for consecutive months. May 2026 produced 21.93 billion dollars in customs collections against 21.97 billion in refunds, a net of negative 40 million. June produced 23.63 billion in collections against 49.18 billion in refunds, a net of negative 25.56 billion.
The analysts’ broader point was that the refunds do not restore the economy to the status quo ante. Research from the Harvard Pricing Lab indicates that tariff costs were partially passed through to consumers in higher prices, which means the parties who ultimately bore much of the burden are not the parties receiving the refunds. The Tax Foundation framed it directly, observing that the economic damage from a chaotic tariff regime can outweigh the revenue itself, and unlike the tariffs, it cannot be refunded.
Business uncertainty is the mechanism. By the Tax Foundation’s count the administration has altered tariff policy more than 50 times in 18 months, a cadence that makes multi-year sourcing commitments difficult to underwrite regardless of where rates ultimately settle.
Implications for US businesses
For importers, the immediate lesson is procedural rather than strategic. The companies recovering money today are not the ones that forecast the Supreme Court’s reasoning correctly. They are the ones that preserved their rights, filed protests on time, and in many cases filed suit while the outcome was still uncertain. That is a repeatable discipline, and with the Section 301 forced-labor duties now before the same court, it is immediately applicable again.
For exporters and for US manufacturers with both import and export flows, the refund process is a reminder that duty drawback remains the most reliable form of tariff relief, because it does not depend on litigation outcomes. Drawback on Section 301 and ordinary duties is available for many manufacturing and unused-merchandise scenarios and remains substantially underclaimed.
For finance teams, the cash-flow consequences are concrete. An importer with certified but undisbursed refunds should be treating the receivable as an asset with genuine collection risk and timing uncertainty, not as cash in transit. The slowdown from 49.1 billion dollars in June disbursements to 10.5 billion in August is the relevant data point for any working-capital model.
What to watch next
Three events will shape the remainder of the program. The Federal Circuit’s ruling on the universal-refund appeal will determine whether non-litigants ever recover on finally liquidated entries. The class-certification decision in V.O.S. Selections will determine whether suing individually was necessary. And the CIT panel’s forthcoming ruling on the Section 301 forced-labor tariffs will determine whether a second refund operation of comparable scale is about to begin.
Phase 3 opens Tuesday. For the importers who qualify, the mechanics are finally in place. For the rest, the most important date may not be October 6 but February 2027.
How CAPE actually works
For importers who have not yet engaged with the system, the mechanics are worth understanding because they determine what is recoverable.
CAPE is not a protest mechanism and does not function like one. It is a bulk reliquidation and payment engine built to move very large numbers of entries without individual adjudication. An importer or its broker submits a declaration identifying entries that carried IEEPA provisions in Chapter 99 of the tariff schedule. CBP validates the declaration against its own entry data, determines whether the entries fall within an applicable court order and liquidation posture, accepts or rejects them, and for accepted entries certifies a refund amount including interest to Treasury for disbursement.
The acceptance rate is instructive. More than 286,000 declarations have been submitted and just over 201,000 accepted, which means roughly 30 percent did not clear. Rejections generally trace to one of three causes: entries that do not actually carry an IEEPA provision, entries whose liquidation status places them outside the phase being processed, or filer-identity mismatches where the submitting party is not the importer of record.
That last category catches more companies than expected. Corporate reorganizations, broker changes and acquisitions all create situations where the entity that paid the duty no longer matches the entity now trying to claim it. Those cases require documentation of successor interest and are among the slowest to resolve.
Interest is calculated from the date of payment, which for 2025 entries is now substantial. For an importer with 10 million dollars in IEEPA duties paid in mid-2025, accrued interest is a meaningful component of the recovery and should be modeled separately rather than ignored.
The commercial fight over who owns the money
A second-order dispute is emerging in commercial courts and contract negotiations, and it will outlast the refund program.
During 2025 and early 2026, many importers responded to the emergency-powers tariffs by adding duty surcharges to customer invoices, renegotiating delivered prices, or invoking change-in-law clauses in supply agreements. Those mechanisms moved the economic burden downstream. Now that the duties have been invalidated and the refunds are flowing, the question is whether the importer that recovers from CBP owes anything to the customer that funded the surcharge.
The legal answer depends entirely on contract language, and the language varies widely. Some surcharge clauses are drafted as pure cost pass-throughs with an explicit refund-sharing provision. Many are not. Where a surcharge was implemented as a price increase rather than an identified duty recovery, the importer generally keeps the refund. Where it was identified line by line as a tariff charge, customers have a stronger claim.
Trade counsel have advised importers to inventory these arrangements before refunds land rather than after, because the accounting treatment of a refund that may be subject to a customer claim differs from that of a clean recovery, and because the goodwill cost of handling it badly can exceed the amount in dispute.
Acquirers face a related problem. Transactions that closed during the tariff period often allocated IEEPA exposure through indemnities or purchase-price adjustments drafted on the assumption the duties were permanent. Several of those provisions are now producing disputes about who owns a refund of a liability that was priced into the deal.
The lesson importers keep relearning
Every tariff cycle of the past two years has ended the same way, and the pattern is now clear enough to be treated as a planning assumption rather than an observation.
A tariff is imposed under a contested authority. Importers pay it because there is no alternative. Some subset files protests and lawsuits while the legal question is genuinely open, which is to say while filing looks like an expensive hedge against an unlikely outcome. A court eventually rules. And when the money comes back, it comes back along the lines of who preserved their rights, not along the lines of who paid.
The IEEPA program made that division explicit and expensive. Companies with active cases are filing for finally liquidated entries beginning Tuesday. Companies without them are reading appellate dockets and watching a limitations clock. The dollar difference between those two positions, for a mid-sized importer with several years of covered entries, can run well into eight figures.
The same decision is now live again. Section 301 forced-labor duties of 10 and 12.5 percent are being collected today on goods covering nearly all US imports. The CIT heard argument on their legality September 30, the panel’s questioning suggested genuine skepticism about the agency’s evidentiary record, and a written ruling is expected within weeks. Protest deadlines on entries liquidating now will arrive long before the appellate process concludes.
Importers who concluded in 2025 that the emergency-powers tariffs were probably lawful and not worth litigating were making a defensible judgment on the information available. The ones recovering money today are the ones who filed anyway. That is the whole lesson, and it has a direct application to the entries clearing customs this week.