Tariff refund process could be ready by the spring, customs official says

Government officials are getting closer to ironing out a refund process for the hundreds of thousands of companies that paid tariffs now deemed illegal.

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In a filing with the Court of International Trade on Friday, Brandon Lord, executive director of U.S. Customs and Border Protection’s trade policy and programs directorate, said the CBP is working on a new system that will simplify the process. He said it should be ready in 45 days and require “minimal submission from importers.”

The filing comes after a judge on Wednesday ordered the government to start paying back all importers the illegal tariffs they paid — with interest. Judge Richard Eaton of the U.S. Court of International Trade wrote that “all importers of record’’ were “entitled to benefit’’ from the Supreme Court ruling that struck down sweeping double-digit import taxes President Donald Trump imposed last year under the 1977 International Emergency Economic Powers Act (IEEPA).

Eaton would have to approve the process before it proceeds.

In the filing, Lord said as of March 4, over 330,000 importers have made a total of over 53 million entries with CBP and paid about $166 billion in tariffs that now have to be refunded.

Lord estimated that under the current system, refunds would take more than 4.4 million man hours to complete, and it isn’t feasible to divert all employees to the refund process full time, because “CBP’s other functions and responsibilities would be severely disrupted and the agency would not be able to continue to adequately perform its mission, including its revenue protection mandate and its vital national security functions.”

But he said the agency is confident they can develop and implement a new process that will streamline and consolidate refunds and interest payments. The system should be ready in 45 days, he said.

“This new process will require minimal submission from importers,” he wrote. “It will also minimize errors by ensuring accurate IEEPA refund calculations through system validations and allowing for a review period for CBP to resolve any discrepancies with the importer and to confirm no other outstanding enforcement issues or no revenue is owed.”

Lord also noted that as of Feb. 6 the CBP only issues refunds electronically, but most importers haven’t completed signing up for the electronic system. Of the 330,566 importers who paid tariffs, only 21,423 have completed the setup process to receive their refunds electronically.

“Until importers complete the process to receive refunds electronically, the refunds will be rejected,” he said.

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