Executive summary

Following the United States (US) Court of International Trade's (CIT's) 4 March 2026 order in Atmus Filtration, Inc. v. United States (Ct. No. 26-01259), the Executive Director of Trade Programs at US Customs and Border Protection (CBP), on 6 March 2026 submitted a sworn declaration to the CIT outlining the operational challenges associated requiring liquidation of all unliquidated entries that were entered subject to International Emergency Economic Powers Act (IEEPA) duties without regard to IEEPA duties and reliquidation of any entries that have been liquidated, but for which liquidation is not final, without regard to IEEPA duties.

As a result of the challenges, CBP proposed new Automated Commercial Environment (ACE) functionality and associated process flow that could work to address the operational challenges associated with the IEEPA duty refund process.

For more on the CIT's order, see EY Global Tax Alert, US Court of International Trade orders CBP to liquidate and reliquidate entries without IEEPA duties, dated 5 March 2026.

Scale and timing challenges identified by CBP

In its filing, CBP notes that processing IEEPA tariff-related refunds under standard procedures is operationally challenging, as more than 53m entries included IEEPA duties as of 4 March 2026, with roughly 20.1m million still unliquidated and total collections of about $166b. Additionally, hundreds of thousands of formal entries are automatically liquidated in ACE each week, and CBP is unable to isolate IEEPA entries from the broader pool without risking liquidations that could conflict with Antidumping and Countervailing Duties (AD/CVD) or other legal obligations.

Furthermore, CBP notes that approximately 63% of IEEPA-affected entries are informal; although CBP stopped accepting IEEPA deposits for informal entries on 24 February 2026, approximately 4m entries filed before that date remain unliquidated and will liquidate upon March payments. More than 15m entries that were liquidated on or before 4 December 2025 were already outside the 90-day voluntary reliquidation window as of 4 March 2026, and for more than 60,000 entries the window expired that same day, the CBP declaration states.

Isolating IEEPA amounts is further complicated because many importers combined duty types within a single Harmonized Tariff Schedule (HTS) line, requiring manual line-level adjustments; ACE mass updates are limited to 10,000 lines per submission, yet more than 1.6b lines require updates, with anomalies needing individual review, the CBP explains.

Interest payments also add complexity to the task as they often must be calculated manually when deposits or refunds span multiple dates, and each refund requires certification by both the CBP Office of Field Operations and Office of Finance without any system workaround.

The declaration further notes that processing the refunds electronically, which has been required since 6 February 2026, also presents challenges, as only 21,423 of the 330,566 importers who paid IEEPA duties have completed the necessary electronic refund setup, leaving CBP unable to process 7,700 refunds for 2,897 importers.

At roughly five minutes per refund across more than 53m refunds, CBP estimates the effort would require more than 4m staff hours and would significantly divert personnel from essential revenue-protection and national-security functions.

CBP's proposed new ACE functionality

The declaration describes a new ACE refund process that CBP aims to deploy within approximately 45 days. Under the new process:

• Importers will file a declaration in ACE that includes a list of entries on which IEEPA duties were paid.
• ACE will run a series of validations on each entry within the declaration and automatically recalculate the duty owed without the IEEPA tariffs (with applicable interest).
• CBP will verify the declaration and processes refunds as soon as practicable.
• ACE will finalize (liquidate or reliquidate) the entries.
• ACE will automatically aggregate the refunds with interest by importer and liquidation date.
• CBP will certify the refunds.
• The US Department of the Treasury will issue IEEPA refunds electronically.

CBP will issue guidance on the filing process and validations and aims to minimize importer submissions while enabling review and resolution of discrepancies.

What this means for businesses

The filed declaration is a proposal from CBP for the CIT's consideration, and we do not yet know how the CIT will rule on this proposal. If this process is accepted by the CIT, refunds will not be instantaneous as CBP would roll out a new ACE-based process that consolidates and automates calculations, verification and payment. Electronic refund enrollment is mandatory; refunds will be rejected if the importer has not completed electronic setup.

Auto-liquidation of formal entries will continue on weekly schedules, and informal entries will liquidate upon payment (e.g., Periodic Monthly Statement), unless and until CBP deploys the new process and issues specific controls.

Accurate entry-level data will be essential, especially if multiple duty types were reported on the same line, so CBP can isolate IEEPA amounts and calculate interest correctly.

Actions to consider

Actions for businesses to consider, depending on their specific situations, include:

• Stay current with latest court orders and monitor the final decision from the CIT.
• Complete CBP's electronic refund setup immediately, if the business has not already done so, to help ensure payments are not rejected; verify bank and portal details and test receipt processes.
• Compile a master list of affected entries, extracting Entry Summary numbers and line details (Harmonized Tariff Schedule of the US (HTSUS), duty types, deposit dates/amounts) for entries that included IEEPA duties; segment by status (unliquidated; liquidated but within, 180-day protest period; liquidated and final).
• If IEEPA amounts were combined with base duty or other remedies on the Chapter 1-97 line, prepare line-level reconciliations to isolate IEEPA deposits. Retain supporting workpapers for CBP verification.
• Prepare for ACE declaration filing by designating an internal owner to file importer declarations once CBP publishes guidance. Align with brokers to ensure data consistency and timely submission.
• Assign a cross-functional team (trade compliance, tax, customs brokerage, finance, IT) to manage data collation, ACE filings and refund reconciliation. Plan for audit trails and potential anomaly resolution with CBP.