CBP says it’s struggling to issue tariff refunds fast, proposes a new system

U.S. Customs and Border Protection says it’s facing complications complying with a court order to quickly issue refunds for tariffs canceled by the Supreme Court.

However, in a court filing on Friday, the agency said it’s working on a new system that would let thousands of importers file claims. CBP would verify the payments and issue refunds. 

A top official said the new multistep process could be ready in 45 days.

“The process will be simpler and more efficient than the existing functionalities, and CBP will provide guidance on how to file to refund declarations in the new system,” Brandon Lord, the executive director of trade programs for the CBP’s Office of Trade, wrote in a declaration to the Court of International Trade.

The Supreme Court in February struck down tariffs that President Trump imposed on individual nations under the International Emergency Economic Powers Act. 

The justices said Mr. Trump usurped Congress’ taxing powers by invoking the 1977 law. 

Mr. Trump is working to reconstruct his tariff system under other authorities, though businesses want refunds for money they paid to customs officials under IEEPA.

Judge Richard Eaton of the U.S. Court of International Trade on Wednesday said importers were entitled to refunds, though CBP says its current systems are not set up to deal with the order.

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The agency estimates that more than 330,000 importers have made payments under IEEPA and that refunds would total around $166 billion.

“CBP is now facing an unprecedented volume of refunds. Its existing administrative procedures and technology are not well-suited to a task of this scale and will require manual work that will prevent personnel from fully carrying out the agency’s trade enforcement mission,” Mr. Lord wrote. “Personnel would be redirected from responsibilities that serve to mitigate imminent threats to national security and economic security.”

Instead, it’s asking the court to let it update the system of record for imported merchandise, known as the Automated Commercial Environment.

The new system would let importers file a declaration listing their IEEPA tariff payments so that CBP could verify the transactions and recalculate tariffs minus the IEEPA levies. It would finalize the entries, calculate interest and refund payments and issue the refunds electronically through the Treasury.

“CBP estimates that the automated controls described above will save CBP over 4 million hours compared with the manual processes it would otherwise have to complete,” Mr. Lord wrote. “CBP is making all possible efforts to have this new ACE functionality ready for use in 45 days.”

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• Tom Howell Jr. can be reached at thowell@washingtontimes.com.