Trade Advisory: U.S. Court Signals Significant Expansion of CAPE Program Through Phase 3 Development

The U.S. Court of International Trade (CIT) issued a noteworthy update regarding U.S. Customs and Border Protection's (CBP) Consolidated Administration and Processing of Entries (CAPE) program, providing the clearest indication to date that the forthcoming CAPE Phase 3 may significantly expand the universe of entries eligible for IEEPA duty refunds.

While CBP continues to process billions of dollars in refunds through the current CAPE framework, the Court's July 15 order focused attention on the next stage of program development. During a closed status conference, the Court confirmed that CAPE Phase 3 remains under active development and discussed an upcoming order that would direct CBP to reliquidate certain finally liquidated entries pursuant to procedures that are still being finalized.

Why CAPE Phase 3 Matters

Until now, many importers have assumed that entries reaching final liquidation may have limited pathways for obtaining IEEPA duty relief absent separate litigation or other extraordinary remedies. The Court's order suggests that CBP and the Court are developing a mechanism that could permit reliquidation of certain entries that have already reached finality.

Although the Court did not identify which entries will qualify or describe the specific reliquidation procedures under consideration, it stated that the forthcoming order will be entered in approximately 3,700 pending IEEPA cases currently assigned to the Court. This suggests that the next phase of CAPE may be designed to address categories of entries that have been difficult to process under earlier phases of the refund framework.

For importers that previously concluded certain entries were no longer recoverable due to liquidation status, the Court's comments indicate that additional opportunities may emerge once CAPE Phase 3 is formally implemented. However, neither the Court nor CBP has yet published eligibility requirements or operational guidance.

Potential Expansion to Protested Entries

The Court also disclosed that CBP is developing additional CAPE functionality to process refunds involving entries that remain subject to open protests. This is another significant development because it demonstrates continued efforts to broaden CAPE beyond the claim categories addressed during earlier phases of implementation.

While operational details remain unavailable, the Court's discussion suggests that CBP is attempting to create a more comprehensive refund administration process capable of addressing multiple procedural scenarios, including entries that have already liquidated and entries that remain under protest.

Increased Judicial Oversight

The Court's order also highlights the active role the judiciary continues to play in shaping the CAPE rollout. Rather than simply monitoring refund activity, the Court indicated it intends to issue affirmative directions regarding reliquidation procedures applicable across thousands of IEEPA-related cases.

This level of judicial involvement underscores the significance of CAPE Phase 3 and suggests that future implementation steps may continue to be coordinated between CBP and the Court as the government works through the unprecedented volume of refund claims.

What Importers Should Do Now

Importers with pending IEEPA refund claims should continue monitoring developments related to CAPE Phase 3, particularly if they have:

• Finally liquidated entries that may not have qualified under earlier CAPE processes;
• Entries subject to open protests;
• Pending litigation involving IEEPA duty collections; or
• Unresolved refund opportunities associated with previously liquidated imports.

Although specific eligibility criteria have not yet been released, companies may wish to identify potentially affected entries now so they are prepared to respond quickly once CBP publishes implementation guidance. This may be particularly important for importers with large populations of historical entries affected by IEEPA duty collections.

Bottom Line

The most significant takeaway from the Court's latest CAPE status update is not the amount of refunds already processed, but rather the Court's confirmation that CAPE Phase 3 is being developed to address additional categories of entries, including certain finally liquidated entries and potentially entries with open protests. If implemented as contemplated, Phase 3 could represent the most substantial expansion of the CAPE program since its inception and may create refund opportunities for importers that previously believed recovery avenues were exhausted. Importers should closely monitor forthcoming Court orders and CBP guidance as the next phase of CAPE is finalized.

Disclaimer

This advisory is provided for informational purposes only and does not constitute legal advice. The information contained herein is based on publicly available court filings and government statements as of the date of publication. Importers should consult qualified legal counsel regarding the application of these developments to their specific circumstances. Regulatory guidance, court orders, and CBP procedures may change, and companies should monitor future developments carefully before taking action.

With CAPE Phase 3 potentially expanding refund eligibility for liquidated and protested entries, now is the time to evaluate your exposure. Crane Worldwide Logistics can help review your import history, assess potential refund opportunities, and position your team to act quickly when CBP releases implementation guidance.