Trade Updates: IEEPA Litigation & Refunds, New Restrictions, and New Tariffs
A rapidly evolving customs and trade landscape is creating new compliance obligations, enforcement exposure, and potential recovery opportunities for U.S. importers. Recent developments involving IEEPA tariff refunds, importer-of-record requirements, CBP enforcement activity, and expanding tariff measures warrant prompt attention, particularly for companies with finally liquidated entries, foreign or lightly capitalized import structures, and reconciliation filings.
I. IEEPA Tariff Refunds: File Suit Now for Finally Liquidated Entries
If your IEEPA entries liquidated more than 80 days ago, you must file a lawsuit at the U.S. Court of International Trade (CIT) to obtain your refund. CBP has set up IEEPA refund processing through a “CAPE” process, divided into Phase 1 (regular unliquidated or recently liquidated entries), Phase 2 (entries marked for reconciliation but not yet reconciled, which are also unliquidated or recently liquidated) and Phase 3 (entries (including recon entries) which liquidated more than 80 days prior). CBP claims it lacks authority to reliquidate entries which liquidated more than 80 days prior to CAPE filing. Under CAPE Phase 3, CBP will reliquidate only pursuant to a court order issued to the individual importer. The CIT is working diligently to issue orders. On July 17, 2026, Judge Eaton ordered reliquidation for the approximately 3,700 plaintiff importers, and more orders are issued as cases are filed. The effect of the government’s recent appeal on reliquidation of finally liquidated entries is unclear, but what is clear is that non-litigants are not covered in CAPE Phase 3.
Recent developments you should be aware of:
Class certification motions pending. There are cases in which plaintiffs have asked the court to create a class action covering all importers who have not received refunds. If granted, class certification could create a path for non-litigants, but the government is opposing and any ruling will likely be appealed. Other class actions on behalf of e.g., consumers, have been filed demanding portions of the refunds which have been paid.
Filing deadlines approaching. There is a 2 year statute of limitations on IEEPA refund suits, which begins to run out on a rolling basis beginning February 4, 2027 (fentanyl tariffs — goods from China, Mexico, or Canada) and April 5, 2027 (reciprocal tariffs). Do not delay in filing your CIT refund action.
Our recommendation: File suit at the CIT promptly — filing costs are modest relative to the amounts at stake, and litigation is currently the only certain path to a refund on finally liquidated entries. We are happy to assist with this.
II. Foreign Importers of Record: Sweeping New Restrictions Ahead
Executive Order 14411, “Strengthening Customs Enforcement” (June 3, 2026), directs CBP to overhaul IOR rules, with particular focus on foreign IORs.
Key provisions:
Foreign Importers of Record (IORs) barred from informal entries (under $2,500). The EO is self-executing on this point; implementing regulations have not yet been issued, but enforcement is expected promptly. Foreign IORs will also face significant new hurdles for formal entries, including the inability to use continuous bonds absent a CBP determination that the revenue is fully protected.
Broad definition of “Foreign IOR.” Any entity lacking (i) U.S. organization or principal place of business, (ii) physical presence with “significant business activity,” (iii) sufficient domestic assets, or (iv) U.S. controlling beneficial ownership. Many current IORs may fall within this definition.
American IORs affected too. All IORs must maintain minimum tangible domestic assets, increased bonding, expanded data disclosures (beneficial ownership, affiliations, import volumes, supply chain information), and “good standing” with CBP — or lose import privileges.
Status: No proposed regulations yet, but the September 1, 2026 deadline — just 8 days away — requires foreign IORs to submit to CBP any information provided to foreign customs authorities prior to goods' arrival in the United States. CBP has 180 days from June 3 for the broader rulemaking.
Revised penalty mitigation standards imminent. By approximately September 1, CBP must revise its penalty mitigation guidelines to limit mitigation to impose a minimum penalty of at least 50% and eliminate mitigation for repeat offenders — a significant departure from current rules, under which mitigation can reduce penalties significantly. Consider making a prior disclosure now, before CBP begins penalty actions and these harsher mitigation standards take effect.
AI-driven enforcement. CBP already tracks containers all over the world and leverages AI to compare U.S. entry data against foreign export declarations, invoices, and ownership records, making it far easier to detect discrepancies in valuation, classification, and origin.
Clients that import under DDP terms through a foreign supplier, use a thinly capitalized U.S. entity as importer of record, or rely on a foreign IOR should immediately evaluate whether their import structure will be viable under these new requirements. We are happy to analyze your current IOR arrangements and advise on any restructuring needed before the September 1 deadline and the broader 180-day rulemaking window.
III. CBP Enforcement Activity: Significant Increase in CF-28s and CF-29s
CF-28 (Request for Information) and CF-29 (Notice of Action) issuance has increased substantially since September 2025, driven by CBP’s increased use of AI analytics and: (1) post-IEEPA refund verification of CAPE claims; (2) Section 232 aluminum and steel tariff “derivative article” enforcement; and (3) Section 301 exclusion verifications. Reconciliation entries are a particular focus.
Carefully responding to any CF-28 (30-day deadline) can avoid escalation to a CF-29 Notice of Action, triggering reclassification “rate advances”, or adjustments to customs value. Errors may lead to pre-penalty and penalty notices for negligence, gross negligence, or fraud.
Our recommendation: Monitor your ACE portal for CF-28 and CF-29 notifications and engage counsel promptly upon receipt. Review entry data proactively — particularly reconciliation entries — and consider prior disclosure where compliance issues are identified, given the imminent penalty changes. We are happy to initiate a proactive review of your reconciliation entries and recent CF-28/CF-29 activity to identify and address compliance risks before the new penalty mitigation standards take effect.
IV. Other Developments to Watch
New Section 338 tariffs on Canadian products. On August 19, 2026, new 50% tariffs on certain Canadian motor vehicles, alcoholic beverages, and dairy products took effect under Section 338 of the Tariff Act of 1930 — a trade authority never before invoked for tariff action.
New Section 301 forced labor tariffs. A new two-tiered global Section 301 tariff regime covering 60 economies became effective July 24, 2026, calibrated to each jurisdiction's policies on preventing the importation of goods made with forced labor.
Section 232 expansion. Section 232 tariffs continue to expand into pharmaceuticals, critical minerals, and semiconductors, with recent measures also covering polysilicon and solar panel products.
Please reach out to Tiffany N. Compres and Chris Pey with questions about these developments or to discuss how they affect your import operations.
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