The Trump Administration’s new tariff initiatives are reshaping the importing environment in ways that extend far beyond the tariff rates themselves. Increased duties are driving higher customs bond requirements, new executive actions are signaling a more aggressive enforcement posture, and importers are facing growing pressure to ensure that their compliance programs can withstand heightened scrutiny.

This four-part series examines these developments and their practical implications for multinational companies. This first article addresses one of the most immediate consequences of the current tariff environment: rising customs bond requirements and growing demands from sureties for collateral. As tariff rates increase, many importers are discovering that customs bonds are no longer simply a compliance requirement. They have become a significant capital management, liquidity, and operational issue.

Many importers have seen their continuous bond requirements rise not because import volumes increased, but because higher duties, taxes, and fees increased the amounts counted toward bond sufficiency. Because a customs bond is a financial guarantee to CBP that duties and other obligations will be paid, higher tariff rates can automatically drive higher bond requirements even when shipment patterns remain stable.

This has created a new reality for importers with otherwise steady operations and strong compliance histories. Companies are being required to carry larger bonds, while sureties are often imposing stricter underwriting standards, additional collateral requirements, and larger letters of credit.

To help companies navigate these challenges, this article explains why rising tariff rates are leading to enhanced bonding requirements and outlines practical steps importers can take to manage the resulting financial and operational risks. Subsequent articles in this series will examine how the Administration intends to leverage enhanced customs enforcement authorities, what importers should expect from an increasingly aggressive enforcement environment, and why certain tariff-mitigation strategies that may appear attractive in the short term can create significant legal and financial exposure over the long term.

What Is a Customs Bond?

A customs bond is a three-party financial instrument. The importer serves as the principal, the surety company serves as the guarantor, and CBP, on behalf of the United States government, is the beneficiary. The bond guarantees payment of duties, taxes, fees, penalties, and compliance-related obligations arising under customs law.

Without an active bond, a commercial importer generally cannot secure release of goods through formal entry procedures. There are two primary bond types:

• Single transaction bonds, which apply to one entry only; and
• Continuous bonds, which cover all entries made during a twelve-month period and are the standard bond vehicle for regular importers.

Most commercial importers with ongoing entry activity use a continuous entry bond.

How CBP Calculates the Continuous Bond Amount

CBP generally sets the required amount of a continuous importer bond using a formula based on the importer’s historical duties, taxes, and fees. The baseline calculation is typically 10% of the total duties, taxes, and fees paid or payable over the preceding twelve months, subject to minimum thresholds and rounding rules.

CBP reviews bond sufficiency on a rolling twelve-month basis. If duties, taxes, and fees rise significantly during the year, the agency may determine that the existing bond is insufficient and require an increase before the bond’s anniversary date.

After CBP applies the 10% formula, the number is not left as an exact figure. The amount is subject to a minimum and then rounded upward under fixed rules, with the key points being as follows:

• Minimum requirement: The standard minimum continuous importer bond is $50,000.
• General rounding rule: Bond amounts are generally rounded up to the nearest $10,000 increment.
• Higher-duty accounts: For importers whose annual duties, taxes, and fees exceed $1 million, calculations may be rounded up in $100,000 blocks.

Because CBP rounds upward, the final required bond can exceed the raw 10% calculation. To illustrate:

• If an importer paid $250,000 in duties, taxes, and fees over the prior year, 10% would equal $25,000, but the importer would still need the $50,000 minimum bond.
• If an importer paid $900,000, 10% would equal $90,000, which would generally become the required bond amount.
• If an importer paid $1,150,000, 10% would equal $115,000. Depending on the applicable rounding convention for accounts above the $1 million threshold, the required bond could increase materially above that raw figure.

How Importers Calculate Their Required Continuous Entry Bond Amount

To estimate whether a current continuous bond remains sufficient, importers generally need four core pieces of information:

• the total duties, taxes, and fees paid over the prior twelve months;
• the current trend in duty exposure, including expected tariff increases;
• confirmation of the sufficiency figures reflected in CBP systems, often obtained through the ACE portal or through a licensed customs broker; and
• a reasonable projection of estimated imports and applicable tariffs going forward one year.

It is important to focus on actual duties, taxes, and fees paid to the government, not the entered value of imported merchandise. In a period of tariff volatility, duty trend data may be more important than shipment count alone.

The recent wave of tariff actions has intensified the bond issue because bond sufficiency is directly tied to duties, taxes, and fees. When tariffs increase through executive orders, trade remedies, new Section 301 announcements, or due to new antidumping/countervailing duty orders, the bond formula rises mechanically. This means an importer can face a bond increase even where business volume remains flat.

That is one reason the issue is expected to become even more pronounced if additional Section 301 tariffs take effect. Importers that maintain bonds at or near the minimum required level may face repeated insufficiency notices if expected tariff increases are not built into their forecasts.

Why Surety Underwriting Often Exceeds the CBP Formula

Many importers are finding that the surety market is reacting more aggressively than CBP’s regulatory formula. CBP’s bond requirement is largely mechanical. It is based primarily on historical duties, taxes, and fees and projected bond sufficiency under the agency’s rolling twelve-month methodology. Sureties, however, are not limited to that formula. They underwrite to worst-case exposure, timing risk, collectability risk, and the possibility that liabilities will remain open or increase well after entries are filed.

That distinction is especially important in the current tariff environment. CBP may calculate a bond amount using standard historical metrics, but a surety may conclude that the importer’s actual risk profile is materially higher because of tariff volatility, the possibility of retroactive duty increases, or the extended tail associated with unliquidated entries, audits, protests, and post-entry adjustments. In practice, this means an importer may technically meet CBP’s bond formula and still be asked by the surety to provide collateral, a letter of credit, indemnity support, or additional financial documentation.

In evaluating an importer, sureties may consider:

• Unliquidated entries. Open entries extend the period during which liability can change, particularly where final duty treatment remains uncertain.
• Tariff volatility. Rapid changes in applicable duty rates can increase projected exposure even where shipment volume is stable.
• Financial statements, liquidity, and working capital. Sureties assess whether the importer has the financial strength to absorb higher duty obligations or reimburse the surety if a claim is paid.
• Industry risk. Certain sectors are viewed as higher risk because of enforcement activity, trade remedy exposure, valuation disputes, or country-of-origin complexity.
• Prior claims history. Past bond claims, compliance issues, or payment problems can materially affect underwriting.
• Concentration of sourcing or commodity exposure. Heavy dependence on a single country, supplier base, or tariff-sensitive product category can increase perceived risk.
• Exposure to trade remedies such as antidumping and countervailing duties. AD/CVD issues remain among the most significant drivers of conservative surety underwriting.
• Section 232 exposure. Imports of steel, aluminum, and derivative products, as well as products subject to quota, melt-and-pour, or derivative classification questions, may receive heightened scrutiny.
• Section 301 and IEEPA-related exposure. Sureties may evaluate whether current sourcing patterns are vulnerable to sudden tariff increases or changes in executive trade actions.
• Classification, valuation, and origin complexity. Where the tariff treatment depends on difficult classification issues, substantial assists, transfer pricing questions, or country-of-origin determinations, sureties may see greater risk of post-entry adjustments.
• Importer maturity and business history. Newer companies, rapidly growing importers, and businesses without a long financial or compliance record may face more demanding underwriting.
• Open audits, investigations, or reconciliations. Participation in reconciliation programs, pending Focused Assessments, or other agency reviews can increase concern about unresolved exposure.
• Customs broker and compliance controls. Weak internal controls, limited visibility into ACE data, or lack of a documented compliance program may also affect underwriting outcomes.

Sureties may also react strongly to other indicators of contingent customs liability. These can include:

• significant use of first sale valuation, transfer pricing, or other valuation methods that could be challenged later;
• repeated or high-value post-summary corrections or protests;
• substantial reliance on free trade agreement claims or special tariff programs where eligibility may later be questioned;
• imports involving forced labor, sanctions, export controls, or admissibility concerns, which may signal broader compliance risk;
• high-volume imports from jurisdictions subject to changing trade policy or geopolitical risk; and
• evidence that the importer routinely sizes bonds close to the minimum required threshold rather than building in capacity for duty fluctuations.

The result is that surety underwriting frequently exceeds the narrow CBP formula. CBP’s approach establishes the minimum amount of bond security the agency expects based on historical duties and projected exposure. The surety market, by contrast, prices and underwrites the risk that liability will rise, remain unresolved, or become difficult to recover from the importer. In a period marked by tariff volatility, Section 301 uncertainty, Section 232 complexity, and ongoing AD/CVD enforcement, that distinction has become increasingly important. For many importers, the real constraint is no longer CBP’s minimum bond formula alone, but the broader private-market underwriting standards applied by the surety.

Why AD/CVD Orders and Section 232 Duties Have an Outsized Bond Impact

Importers of merchandise subject to antidumping and countervailing duties often face the most demanding bond and underwriting conditions. AD/CVD exposure creates both duration risk and magnitude risk: entries can remain unliquidated for years because of administrative reviews, litigation, and scope disputes, and final duty liability can increase materially above the cash deposit rate paid at entry. That long-tail exposure is difficult for sureties to quantify and close out, which is why AD/CVD entries frequently trigger heightened scrutiny, larger collateral demands, and, in some cases, bond structures more stringent than the standard continuous bond formula.

This risk is not limited to importers with obvious AD/CVD exposure. Companies operating in sectors commonly affected by AD/CVD orders may also be viewed as higher risk because of the possibility of scope challenges, supplier-specific rate changes, classification disputes, and post-entry adjustments. As a result, even indirect AD/CVD exposure can influence a surety’s willingness to write or expand a bond without substantial security.

Section 232 duties also can have a disproportionate effect on bond requirements, particularly for importers of steel, aluminum, copper, and derivative products. In the current environment, Section 232 is not simply an added duty line item; it is a moving regulatory framework shaped by shifting tariff rates, evolving derivative product coverage, product exclusions, country-specific treatment, quota arrangements, and origin-related requirements. For steel and aluminum in particular, questions involving classification, derivative scope, melt-and-pour rules, smelt-and-cast rules, and the interaction of Section 232 with other duty regimes can make ultimate liability less predictable. Copper-related measures and potential expansions add another layer of uncertainty for importers whose products may fall within changing enforcement priorities or derivative coverage analyses.

That uncertainty matters for bond purposes. Because continuous bond amounts are tied to duties, taxes, and fees, changes in Section 232 treatment can increase the bond amount directly. Beyond the formula itself, sureties may take a more conservative view where imports are exposed to classification disputes, changing scope interpretations, or policy shifts affecting steel, aluminum, copper, and related derivatives. In those cases, the bond amount may reflect not only current duties paid, but also the broader uncertainty associated with future tariff treatment, post-entry review, and unresolved exposure.

Collateral Demands Are Becoming More Common

As bond amounts rise and underwriting standards tighten, more importers are being asked to provide collateral in order to keep bonds in place. Typical forms of collateral include:

• cash collateral;
• irrevocable letters of credit;
• corporate guarantees;
• personal indemnities; or
• combinations of the above.

The letter of credit is the most common structure because it secures the surety’s risk without requiring immediate cash payment to the surety. It does, however, tie up bank capacity, trigger fees, and can affect broader financing arrangements. Cash collateral directly reduces liquidity. In some cases, importers may find that the surety’s collateral demand approaches or even exceeds the amount of the bond required by CBP. This can become a significant capital allocation issue, particularly for smaller and mid-sized importers.

Stacking Liability and Extended Exposure

One of the most important concepts in customs bond underwriting is stacking liability. Each continuous bond term creates a separate period of exposure. When a bond renews annually, liabilities from prior bond periods do not disappear immediately. Entries from earlier periods may remain unliquidated or subject to review for years.

From the surety’s perspective, this means exposure can accumulate across multiple bond periods until all entries are liquidated and no further adjustments are possible. The stacking effect is one reason sureties may demand more collateral than the CBP formula alone would suggest.

This issue is particularly relevant where importers make repeated bond increases mid-term. Frequent upward adjustments can complicate the surety’s risk profile and raise concern about expanding open exposure.

Cash in Lieu of a Surety Bond

Importers are not limited to traditional surety-backed bonds. One lawful and sometimes overlooked alternative is cash in lieu of a surety bond. Under this approach, the importer files the standard customs bond form, commonly Form 301, and secures the bond with cash deposited directly with the U.S. Treasury rather than through a private surety.

This can eliminate private underwriting concerns, including collateral multiples, letters of credit, or personal indemnity requirements. However, the tradeoff is that the importer’s own cash is tied up for the life of the bond and potentially longer while liabilities remain open. The funds generally do not earn interest, and additional cash may need to be posted if CBP later determines that the bond amount must increase.

For some companies, especially where surety underwriting has become difficult or costly, this may still be a practical option.

Hybrid Funding Strategies

Some importers use a hybrid approach, combining surety support with partial cash collateral or bank-issued letters of credit. This can help preserve liquidity while addressing underwriting concerns. Depending on the importer’s balance sheet, trade profile, and banking relationships, hybrid structures may offer a more flexible path than an all-cash or fully collateralized surety model.

Practical Steps for Importers

Given the current environment, importers should consider taking the following steps:

• Review current bond sufficiency using rolling twelve-month duties, taxes, and fees;
• Model expected duty exposure under current and anticipated tariff actions, including Section 301 developments;
• Confirm CBP bond sufficiency data through ACE or a licensed customs broker;
• Prepare internally for collateral requests, including coordination with finance, treasury, and lending partners;
• Evaluate whether mid-term bond increases are likely and whether a larger initial bond may be more prudent;
• Assess AD/CVD exposure carefully, including indirect commodity or sector risk;
• Consider whether cash in lieu of a surety bond is viable if private underwriting becomes too restrictive; and
• Explore hybrid structures that balance liquidity preservation against surety demands.        

Continuous customs bond requirements are driven first by CBP’s formula, which is linked to duties, taxes, and fees, and second by the private surety market’s reaction to risk, timing, and collectability. Elevated tariffs imposed through executive authority in 2025 have increased baseline bond requirements for many importers even where shipment volumes remain stable. At the same time, sureties have responded with tighter underwriting, more collateral demands, and greater sensitivity to open liability and tariff volatility.

For importers, especially smaller and mid-sized companies, customs bond planning is now a strategic issue that intersects with compliance, liquidity, and overall capital management. Companies that understand how bond amounts are calculated, how sureties evaluate exposure, and what options exist for satisfying bond requirements will be better positioned to manage risk and avoid disruption as tariff pressure continues to build.

Of course, importers should understand that the financial pressures associated with rising bond and collateral requirements are only one part of the broader customs enforcement landscape. In addition to CBP’s increased scrutiny of bond sufficiency, duty exposure, and importer compliance, the Department of Justice is becoming a more prominent player in tariff enforcement. The next two articles in this series will focus on the rapidly rising enforcement risks in the importing area.

Would you like more practical compliance tips like these? The �鶹ֱ�� International Trade & National Security Team is monitoring all international trade, enforcement, and compliance developments, which we post as they occur on our Tariff & International Trade Resources blog. for our email list to receive future emails and practical international regulatory compliance tips, including our biweekly What Every Multinational Should Know articles.

Our white paper on Managing Import and Tariff Risks During a Trade War outlines a 12-step plan to provide practical steps to help importers navigate the tariff and international trade risks in the current tariff and trade environment, while the companion white paper on Managing Supply Chain Integrity Risks provides practical advice to deal with heightened supply chain risks pertaining to goods imported into the United States, including the increasing use of detentions by Customs.

(And How Importers Can Head Off Its Attempts To Keep Billions of Dollars of Unlawfully Collected IEEPA Tariffs)

For months, the U.S. Government has signaled it would challenge the Court of International Trade’s (CIT) authority to require refunds of IEEPA tariff payments for “finally liquidated” entries (those more than 90 days after liquidation). That challenge has now arrived. In recent CIT filings and in its appeal to the U.S. Court of Appeals for the Federal Circuit (CAFC), the Government has argued that the CIT cannot order the return of finally liquidated IEEPA tariff payments, except for plaintiffs that have filed protective actions under 28 U.S.C. § 1581(i).

A version of this article was initially published as What Every Multinational Should Know About … the Government’s Appeal of Judge Eaton’s Universal IEEPA Tariff Refunds Order (and Why It Is Claiming It Can Keep Billions of Dollars of Unlawfully Collected IEEPA Tariffs) on June 11, 2026.

This position creates significant uncertainty for importers who have not filed protective actions at the CIT:

• The most immediate issue involves “finally liquidated” entries, with the U.S. Government arguing it can retain $30 billion or more in unlawfully collected IEEPA tariffs.
• The concern, however, is not limited to those entries. Other categories outside CAPE Phase 1, including reconciliation entries and entries involving antidumping or countervailing duty (AD/CVD) issues, may also face delayed, uncertain, or disputed refund treatment depending on how CAPE Phases 2 and 3 develop and the full arguments the DOJ chooses to raise on appeal.

More than 3,500 importers have already filed protective actions, but many more have not. Importers with a meaningful volume of entries more than 80 days past liquidation—or with substantial reconciliation or AD/CVD-affected entries — should consider filing a section 1581(i) protective action to preserve refund rights and potentially improve their position for earlier relief, if they have not already filed such actions.

What is the Status of the CIT’s Oversight of IEEPA Refunds?

In late May, Judge Eaton signaled increasing concern about the Government’s pace of complying with the CIT’s IEEPA refund orders. In response to the court’s requests for briefing, the Government stated on May 29^th that it intended to appeal the refund orders as impermissible universal injunctions, arguing that the CIT cannot extend relief to non-parties that did not file protective actions under Section 1581(i). The Government also stated that, for finally liquidated entries, it would seek to limit relief to the named plaintiffs. The number of such entries continues to grow every day.

On June 3, the Government filed its appeals in the Federal Circuit, again pressing its universal-injunction argument. Then, at a June 9^th hearing, a CBP representative stated that CAPE Phase 3 — covering, among other things, finally liquidated entries — will begin processing refunds, but only for importers that filed Section 1581(i) actions.

The net result is straightforward: importers that have filed Section 1581(i) protective actions are best positioned to recover their full IEEPA refunds. Importers that have not filed are likely, at a minimum, to face significant delays while the appeals process unfolds. Depending on the ultimate outcome, they may not recover certain refunds at all.

What is Happening at the Federal Circuit?

It is not yet clear how the Federal Circuit will resolve the Government’s appeal of the CIT’s refund orders. The Government will rely heavily on Trump v. CASA, 606 U.S. 831 (2025), arguing that Judge Eaton’s orders are impermissible universal injunctions because they extend relief beyond the named plaintiffs. The Government also likely will argue that any importer has an adequate remedy by filing its own Section 1581(i) action.

Plaintiffs, by contrast, are likely to argue that CASA does not control because the CIT is not an ordinary district court, and its customs jurisdiction is closely tied to the administration of a uniform tariff regime. From that perspective, requiring CBP to refund unlawfully collected tariffs on a uniform basis is not an improper extension of relief to non-parties, but a necessary consequence of the court’s role in supervising the lawful administration of customs duties. Plaintiffs are also likely to argue that limiting refunds for finally liquidated entries to importers that filed Section 1581(i) actions would undermine the constitutional and statutory requirement of uniformity by allowing the Government to retain unlawful tariff payments from some importers while refunding identical payments to others.

Plaintiffs may also argue that the statutory rules barring refunds of “finally liquidated” entries do not apply in this context at all, as that statutory restriction presupposes any tariff collection was lawful. Here, however, the Supreme Court has ruled the opposite. That creates a substantial argument that the usual rules governing finality of liquidation do not control, or at least cannot override the Supreme Court’s merits ruling.

Another potentially important distinction is that this case does not present the usual concern associated with nationwide or universal injunctions. In the ordinary case, the objection is that a single trial court is effectively making national policy before the merits have been finally resolved. Here, by contrast, the CIT is the only court that can ever consider the IEEPA refunds issue, meaning any ruling is automatically universal.

In practical terms, the appeal divides importers with non-Phase 1 refund claims into two groups: those that have filed protective actions and those that have not. Importers in the latter category may face material delays, additional administrative obstacles, and potentially the loss of refunds for finally liquidated entries or other categories outside CAPE Phase 1.

Why Is the Set of Finally-Liquidated IEEPA Tariff Entries Important?

In some respects, the Government has moved surprisingly quickly to implement refunds. It has represented that more than $95 billion of the approximately $166 billion in IEEPA tariff payments has already been queued for refund through CAPE. The problem is that the entries the Government is now contesting consist of those liquidated more than 80 days ago (90 days minus a ten-day buffer) and are therefore “finally liquidated” under the Government’s current view of CAPE Phase 1.

At first glance, that category might appear relatively narrow because CBP often liquidates entries approximately 314 days after importation. In practice, however, CBP frequently liquidates entries much sooner than 314 days after importation, particularly for lower-value informal entries or those where companies filed post-summary corrections.

As a result, for many importers, the universe of entries more than 80 days past liquidation is much broader than it first appears.

Bottom Line — What Should Importers Do Now to Best Preserve IEEPA Tariff Refunds?

Importers that have not filed protective actions under 28 U.S.C. § 1581(i) may face substantial delays — or potentially no recovery at all — for certain categories of IEEPA tariff refunds outside CAPE Phase 1. Against that backdrop, the most prudent course is twofold: continue pursuing refunds through CAPE, but also consider filing a protective Section 1581(i) action.

The same analysis applies to reconciliation entries and entries involving AD/CVD issues. Although such entries may be addressed in CAPE Phase 2, the timing and scope of that relief remain uncertain. There is also risk that disputes over those categories could become entangled in the Government’s broader appellate arguments about the availability of relief for non-parties. A protective Section 1581(i) action may therefore offer an additional advantage by putting importers in a better position to seek earlier or more targeted relief.

A protective Section 1581(i) action does not require an importer to abandon CAPE or assume that full litigation will be necessary. Rather, it functions as an insurance policy, preserving the importer’s own claim while the courts decide whether the Government can lawfully withhold refunds from non-parties for finally liquidated or otherwise excluded entries.

If you would like more information about potentially filing a Section 1581(i) protective filing, please reach out to the authors or your �鶹ֱ�� relationship attorney.

Frequently Asked Questions: Preserving the Right to IEEPA Tariff Refunds

FAQ #1: What are the IEEPA tariffs, and how can companies determine how much they paid?

The IEEPA tariffs were imposed by the Trump Administration in 2025 under the International Emergency Economic Powers Act (IEEPA). These tariffs included:

• Fentanyl-related tariffs announced in February 2025 on China, Mexico, and Canada;
• Global and reciprocal tariffs announced in April 2025 (“Liberation Day”) addressing trade imbalances; and
• Country-specific tariffs announced later in 2025 on India and Brazil.

Although the Supreme Court directly reviewed only the first two tariff programs, the logic of the Court’s decision—that IEEPA does not authorize broad-based tariffs—likely has implications for all tariffs imposed under IEEPA.

Importantly, IEEPA tariffs do not include:

• Section 232 sectoral tariffs (e.g., steel, aluminum, copper, lumber, automotive tariffs);
• Section 301 tariffs on China;
• antidumping or countervailing duties; or
• the normal HTS tariffs in Chapters 1–97.

Companies can determine their IEEPA tariff exposure by reviewing data in Customs’ Automated Commercial Environment (ACE). This typically involves running reports beginning February 1, 2025 and filtering for entries containing the relevant Chapter 99 tariff provisions associated with IEEPA measures (such as 9903.01.xx or 9903.02.xx).

If a company does not have ACE access, its customs broker can typically generate the necessary reports.

FAQ #2: What is the deadline to file a §1581(i) action?

Section 1581(i) actions are generally subject to a two-year statute of limitations under 28 U.S.C. § 2636(i). But there is significant uncertainty as to when that period begins to run, including whether it could be tied to:

• the date duties were paid;
• the date of liquidation; or
• the date of the Supreme Court’s decision.

Because the Government may raise timeliness defenses under any of these theories, importers should consider filing sooner rather than later.

There is also a separate timing concern: Section 1581(i) is a residual jurisdictional provision and may become unavailable if another avenue of review is deemed adequate. For that reason, waiting may create additional risk. The safest course for importers that want to preserve judicial options is to evaluate protective filing promptly.

FAQ #3: Can companies still recover refunds if their entries have already been liquidated?

Possibly, but liquidation creates additional risk. Ordinarily, liquidation makes duties final and conclusive unless the importer files a timely protest. In the IEEPA litigation, however, the CIT has indicated that, at least for importers that filed Section 1581(i) actions, the court may have authority to order relief even for liquidated entries.

The greatest concern now is with finally liquidated entries—that is, entries liquidated more than 90 days earlier, or more than 80 days earlier under CBP’s current CAPE framework. The Government has expressly argued that refunds for those entries should be limited to importers that filed protective Section 1581(i) actions.

That issue is particularly important because the universe of finally liquidated entries is larger than many companies assume. CBP often liquidates entries more quickly than the outer statutory timeline, especially for lower-value or informal entries, and post-summary corrections can also accelerate liquidation.

FAQ #4: Will refunded IEEPA tariffs include interest?

Yes.

FAQ #5: What information is required to file a §1581(i) action?

A typical filing includes a summons, complaint, and supporting disclosures. To complete the filing, importers generally must provide:

• the identity of the importer and its principal place of business;
• the importer’s corporate ownership structure, including publicly held parent companies and affiliates;
• identification of any real party in interest, if different from the importer;
• whether the importer has requested extensions of liquidation from CBP; and
• whether the importer has filed post-summary corrections or protests relating to IEEPA entries.

FAQ #6: What happens if an importer does not file a protective action?

An importer that does not file may face substantial uncertainty. At a minimum, it may have to wait while the Federal Circuit and potentially the Supreme Court address the scope of the CIT’s refund authority. More specifically, it may face:

• the risk that refunds will be limited to parties before the court;
• additional complications arising from liquidation finality;
• delays or uncertainty as to reconciliation and AD/CVD-related entries; and
• reliance on administrative refund mechanisms that may be incomplete or delayed.

In the worst case, an importer that does not file may be unable to recover certain refunds at all.

FAQ #7: Can non-importers of record recover IEEPA tariffs?

Generally, only the importer of record has standing to obtain duty refunds directly from CBP. That said, other parties that ultimately bore the economic burden of the tariffs may have contractual or commercial arrangements with the importer regarding the allocation of any refund recovery.

The �鶹ֱ�� International Trade & National Security Practice

The �鶹ֱ�� International Trade & National Security Team covers the full gamut of international trade needs, including for tariffs, customs, supply chain/supply chain integrity, trade remedies/antidumping/countervailing duty, export controls, economic sanctions, and CFIUS national security filings. Our Tariff & International Trade blog regularly publishes practical guidance, like this client alert, on all international trade topics and compiles it by topic area on the �鶹ֱ�� Tariff & International Trade Resources blog. for our email list to receive future emails and practical international regulatory compliance tips, including our What Every Multinational Should Know articles.

For much of the past year, the principal focus of the IEEPA tariff litigation has been whether the tariffs were lawful and whether importers would ultimately be entitled to refunds. Following the Supreme Court’s February 2026 decision invalidating the tariffs and the subsequent proceedings before the Court of International Trade, those questions have largely been answered. The focus has increasingly shifted from whether refunds should be paid to how those refunds will be processed, administered, and distributed.

As CBP continues implementing refunds through the CAPE process and related reliquidation procedures, however, a new issue is beginning to emerge. For many companies, the most significant disputes associated with IEEPA refunds may no longer involve the government at all. Instead, they may involve customers, suppliers, distributors, shareholders, bankruptcy stakeholders, and other private parties seeking to claim a portion of the resulting recoveries.

At first glance, the answer may appear straightforward. The importer of record paid the duties and therefore receives the refund. From a customs perspective, that is generally correct. CBP’s relationship is with the importer of record, and refund payments are ordinarily made to the party that paid the duties.

The more difficult question is whether other parties may possess contractual, equitable, or commercial claims to some portion of those funds once they are received.

For many companies, that question may prove significantly more complicated than the underlying tariff litigation itself.

Why Refund Ownership May Become the Next Major Dispute

The emerging disputes surrounding IEEPA refunds arise from a fundamental distinction between customs law and commercial reality.

From CBP’s perspective, the analysis is relatively straightforward. The importer of record paid the duties and receives the refund. The customs process generally does not attempt to determine which participant in a supply chain ultimately absorbed the economic burden of those duties.

Commercial relationships, however, often operate very differently.

Over the course of the IEEPA tariffs, many companies took steps to offset the financial impact of the duties. Some imposed tariff surcharges. Others increased product prices. Still others renegotiated supply agreements, implemented cost-sharing arrangements, modified purchasing terms, or otherwise attempted to pass tariff costs through the supply chain. In many industries, the economic burden of the tariffs ultimately moved well beyond the importer of record.

As a result, the party that paid the tariffs to the government may not be the same party that ultimately absorbed those costs. In some situations, the importer may have borne the full burden of the tariffs. In others, the costs may have been passed entirely to customers. In still others, the burden may have been shared among multiple participants throughout the supply chain.

This distinction between paying the tariff and bearing the cost of the tariff lies at the heart of the disputes that are now beginning to emerge. As refunds begin to flow, downstream purchasers, distributors, retailers, consumers, and other commercial counterparties are increasingly asking whether they possess a claim to some portion of those recoveries if they previously reimbursed another party for tariff-related costs.

There is unlikely to be a single answer to that question. Rather, the outcome will often depend on the specific facts surrounding the transaction, including the contractual arrangements between the parties, the manner in which tariff costs were allocated, the existence of tariff pass-through provisions, and the representations that were made when those costs were incorporated into pricing decisions.

Businesses receiving significant IEEPA refunds should therefore begin evaluating not only whether they are entitled to receive the refund from CBP, but also whether other parties may claim an interest in those funds once they are received.

Why Consumer Refund Claims Face Significant Obstacles

A number of consumer class action lawsuits have been filed seeking recovery of tariff-related price increases. Although the legal theories vary, the underlying premise is generally the same: companies allegedly increased prices in response to IEEPA tariffs and therefore should not be permitted to retain tariff refunds if those tariffs are ultimately returned by the government.

At a practical level, this argument has intuitive appeal. Consumers may reasonably ask why a company should be permitted to retain a refund if the economic impact of the tariff was previously reflected in higher prices.

The legal analysis, however, is considerably more complicated.

One of the threshold challenges facing many consumer plaintiffs is establishing that they possess a legal entitlement to any portion of a tariff refund in the first place. Consumers generally purchased products at prevailing market prices, not contractual rights to future tariff recoveries. The fact that a company increased prices while tariffs were in effect does not necessarily create a legal obligation to reduce prices or issue refunds if the company’s costs subsequently decline.

Even if such a theory were recognized, significant evidentiary challenges would remain. During the period in which IEEPA tariffs were in effect, businesses faced numerous factors affecting pricing decisions, including inflation, transportation costs, labor expenses, supply-chain disruptions, inventory management concerns, and broader market conditions. Isolating the precise impact of tariffs on any particular product, transaction, or consumer purchase may prove difficult.

Additional complications arise where tariff costs were incorporated into broader pricing decisions rather than separately identified as a distinct surcharge. In many cases, tariffs became only one of many factors influencing overall pricing decisions. Determining whether a particular consumer paid more as a result of tariffs, and if so by how much, may therefore require a highly fact-intensive analysis.

For these reasons, while consumer litigation is likely to continue, many of these cases may face substantial hurdles long before a court reaches the ultimate question of whether any refund should be passed through to consumers. The central issue may not be whether tariffs affected prices. Rather, it may be whether consumers possess a legally enforceable right to recover funds that were refunded to the importer years after the original purchase occurred.

Why Business-to-Business Claims May Present the Greater Risk

While consumer lawsuits have received significant attention, the more consequential disputes for many companies may arise within commercial supply chains.

Unlike consumer transactions, business-to-business relationships are frequently governed by detailed contracts addressing pricing, tariff allocation, cost-adjustment mechanisms, reimbursement obligations, and other commercial matters. As a result, commercial counterparties often possess legal theories that are considerably stronger than generalized claims of unfairness or unjust enrichment.

Indeed, the key distinction is that consumer plaintiffs frequently rely on broad equitable arguments, while commercial counterparties may possess express contractual rights. As IEEPA refunds begin to flow, reports are already emerging of downstream purchasers asserting that they are entitled to all or a portion of those recoveries because they previously reimbursed suppliers for tariff-related costs.

For many companies, the central question will be whether the parties merely agreed that tariff costs would be passed through to the purchaser, or whether they also addressed what would happen if those tariff costs were subsequently refunded. Unfortunately, many agreements were drafted when the possibility of a large-scale judicial invalidation of tariffs seemed remote, leaving little guidance regarding how future refunds should be allocated.

As a result, companies may find themselves revisiting provisions that were originally drafted to address tariff increases rather than tariff refunds.

Among other things, parties may need to evaluate:

• Whether tariffs were expressly addressed in the contract.
• Whether tariff costs were separately identified and passed through.
• Whether the agreement contained change-in-law provisions.
• Whether tariff surcharges were temporary, permanent, or subject to adjustment.
• Whether the parties addressed the possibility of future tariff refunds.
• Whether pricing adjustments were intended to reimburse actual tariff costs or merely reflect changing market conditions.
• Whether the purchaser agreed to bear the tariff burden permanently or only while the tariffs remained in effect.

The answers to these questions may vary significantly from one contract to another.

Why Cascading Claims Increase Litigation Risks

The complexity increases further because these disputes may not remain confined to a single contractual relationship.

In many industries, tariff costs moved through multiple levels of the supply chain before ultimately reaching the end customer. Manufacturers passed costs to distributors. Distributors passed costs to wholesalers. Wholesalers passed costs to retailers. Retailers passed costs to consumers. If refunds are later paid to an importer near the beginning of that chain, multiple parties may argue that they bore some portion of the economic burden and therefore possess a claim to the resulting recovery.

This creates the possibility of cascading claims throughout the supply chain. A downstream purchaser may seek recovery from its supplier. That supplier may then seek reimbursement from another entity further upstream. Additional parties may in turn attempt to pursue recovery from other participants in the chain.

In complex supply chains involving multiple intermediaries, determining who ultimately absorbed tariff costs may become extraordinarily fact-intensive. The analysis may require reviewing years of pricing decisions, contract amendments, surcharge programs, customer communications, and cost-allocation practices. Matters become even more complicated where products were sourced from multiple countries, tariff costs fluctuated over time, or pricing changes were driven by a combination of tariffs and broader market conditions.

As a result, future disputes may involve a wide range of legal theories, including breach of contract, unjust enrichment, indemnification, contribution, declaratory judgment actions, and other commercial claims. What initially appears to be a straightforward customs refund may therefore evolve into a much broader dispute concerning how tariff costs were allocated throughout the supply chain and who ultimately bore the economic burden of those costs.

For many companies, this may prove to be the most significant unresolved issue arising from the IEEPA refund process. The litigation over whether refunds would be paid may be winding down. The litigation over who ultimately owns those refunds may only be beginning.

Litigation Is Not the Only Risk

Even where no lawsuit is filed, companies should not assume that the receipt of a significant IEEPA refund will be free from scrutiny.

Many organizations spent months or years explaining the impact of IEEPA tariffs to customers, suppliers, investors, lenders, and other stakeholders. In some cases, companies imposed tariff surcharges, implemented price increases, renegotiated contracts, or otherwise communicated that tariffs were increasing costs and affecting commercial decisions. As refunds begin to flow, those same stakeholders may naturally ask what happens next.

Organizations that publicly attributed price increases to IEEPA tariffs may face questions from customers, suppliers, investors, regulators, and the media regarding how refund proceeds are ultimately used. Even where no legal obligation exists to pass refunds through to downstream parties, companies may nevertheless confront commercial pressure to explain why they are retaining recoveries associated with costs that were previously passed through the supply chain.

Conversely, companies that elect not to pursue available refunds may face a different set of challenges. Shareholders, lenders, bankruptcy stakeholders, private equity sponsors, and other interested parties may question whether management exercised appropriate diligence in protecting corporate assets. For some organizations, particularly those facing financial pressure or operating in distressed situations, decisions regarding whether and how to pursue refunds may themselves become the subject of scrutiny.

The result is that many companies may face difficult questions regardless of which path they choose. Pursuing refunds may create expectations among customers, suppliers, or other counterparties regarding how those funds should be allocated. Declining to pursue refunds may generate concerns regarding corporate stewardship and the preservation of value.

As a result, businesses should view IEEPA refunds not merely as a customs issue, but as a broader legal, commercial, financial, and reputational issue. The companies best positioned to navigate this next phase will be those that evaluate refund-related decisions holistically, considering not only what they are legally entitled to receive, but also how those decisions may be viewed by the various stakeholders affected by the original tariff costs.

What Companies Should Be Doing Now

Companies expecting substantial IEEPA refunds should consider undertaking a proactive review of their contractual and commercial arrangements before refunds are received.

Areas warranting particular attention include:

• Tariff pass-through provisions.
• Price-adjustment mechanisms.
• Change-in-law clauses.
• Reimbursement obligations.
• Indemnification provisions.
• Settlement agreements.
• Customer communications regarding tariffs.
• Public statements concerning pricing decisions.
• Internal analyses regarding tariff cost allocation.

Companies should also consider preserving documentation demonstrating how tariff costs were allocated throughout the supply chain and whether those costs were ultimately absorbed, shared, or passed through to other parties.

Organizations that wait until a demand letter arrives may find themselves reconstructing decisions that were made years earlier under very different business conditions.

*          *          *

The litigation surrounding IEEPA tariffs continues to evolve. The initial disputes focused on whether the tariffs were lawful and whether importers would ultimately be entitled to refunds. More recent proceedings have focused on the mechanics of obtaining those refunds, including the scope of CBP’s refund obligations and the procedures for returning unlawfully collected duties.

As those issues move closer to resolution, attention is increasingly shifting to a different set of questions. For many companies, the most significant remaining disputes may no longer involve the government at all. Instead, they may involve customers, suppliers, distributors, shareholders, bankruptcy stakeholders, and other private parties asserting competing claims to the resulting recoveries.

The fact that a refund is paid to the importer of record does not necessarily resolve who ultimately bears the economic benefits or burdens associated with that refund. Those questions may depend on contractual arrangements, tariff pass-through provisions, pricing decisions, commercial communications, and the specific manner in which tariff costs were allocated throughout the supply chain.

As a result, companies receiving substantial IEEPA refunds should view those recoveries not simply as customs matters, but as potential sources of broader legal, commercial, financial, and reputational risk. Organizations that proactively evaluate these issues before refunds are received will generally be better positioned to manage the disputes and stakeholder expectations that may follow.

The principal legal question surrounding IEEPA tariffs was once whether refunds would be paid. Increasingly, the more important question may be who ultimately has the right to keep them.

For several months, the U.S. government has been signaling an impending challenge of the Court of International Trade’s (CIT) authority to require refunds of IEEPA tariff payments (i.e., payment refunds for tariffs enacted pursuant to the International Emergency Economic Powers Act) for entries liquidated more than 80 days earlier. Now, the hanging sword has dropped. In recent filings in the CIT and in its appeal to the Court of Appeals for the Federal Circuit (CAFC), the government has stated its intent to argue that Judge Eaton’s refund orders cannot require the return of finally liquidated IEEPA tariff payments except, at most, for plaintiffs that filed protective actions under 28 U.S.C. § 1581(i).

An updated version of this article was published as What Every Multinational Should Know About … The Government’s IEEPA Federal Circuit Appeal on June 18, 2026.

That position creates material uncertainty for importers whose entries are not covered by Phase 1 of Custom and Border Protection’s (CBP) Consolidated Administration and Processing of Entries (CAPE) refund program. Most immediately, the dispute concerns “finally liquidated” entries — i.e., entries liquidated for more than 90 days (80 days under CAPE, which includes a ten-day buffer period). These entries may account for an estimated $30 billion or more in unlawfully collected IEEPA tariff payments. But the concern is broader. Other categories of entries that fall outside CAPE Phase 1, including reconciliation entries and entries involving antidumping or countervailing duty (AD/CVD) issues, also may face delayed, uncertain, or contested refund treatment, depending on how the planned Phase 2 plays out.

The practical consequence is straightforward: importers that have not filed Section 1581(i) protective actions may be at risk of losing, delaying, or complicating their ability to recover certain IEEPA tariff refunds. That risk is most obvious for finally liquidated entries, but it may also extend to other categories outside CAPE Phase 1 if the timing of refunds remains unclear or if those categories become caught up in the government’s broader appellate arguments over the scope of relief available to non-parties. More than 3,000 companies have already filed such actions, but many importers, customs brokers, and individual importers have not. For companies with a meaningful volume of entries that are more than 80 days past liquidation — or with substantial reconciliation or AD/CVD-affected entries — now is the time to seriously consider filing a protective action to preserve refund rights and potentially position themselves to seek earlier relief.

The government’s appeal will likely prolong uncertainty while the CAFC, and potentially the U.S. Supreme Court, consider the scope of the CIT’s refund authority. In the meantime, the liquidation clock continues to run, the number of finally liquidated entries grows by the day, and categories of entries outside CAPE Phase 1 remain in limbo. Accordingly, importers should promptly evaluate whether they need to take affirmative steps to protect their rights, including filing a Section 1581(i) protective action at the CIT if they have not already done so.

The Stage Is Set: What Happened at the CIT in March and April 2026?

On March 27, 2026, following the Supreme Court’s decision in Learning Resources v. United States, 607 U.S. __ (2026), the CIT ordered the government to refund all IEEPA tariff payments, including those for finally liquidated entries — i.e., entries liquidated for more than 90 days. The order was first entered in Atmus Filtration v. United States, Case No. 26-1259. After the plaintiff in Atmus withdrew its complaint, the CIT on April 7 entered a materially similar refund order in Euro-Notions Florida v. United States, Case No. 25-595. This transfer of the order to a new case pushed back the 60-day window for the Department of Justice (DOJ) to appeal and may have materially increased the number of “finally liquidated” entries (those beyond 90 days from entry) as a result.

The CIT partially stayed compliance with that order and instead required the government to provide weekly closed-door status updates on its refund efforts. During those conferences, the government described the development of its CAPE refund system, which appeared designed to process refunds for unliquidated entries and entries liquidated for 80 days or less (entries that had not hit the 90-day post-liquidation mark, taking into account a ten-day buffer period). The government did not explain how it would handle entries liquidated for more than 80 days.

On April 17, Judge Eaton entered similar refund orders, along with similar partial stays, in three additional cases: V.O.S. Selections v. United States, Case No. 25-66; AGS Company Automotive Solutions v. United States, Case No. 25-255; and Grant & Bowman v. United States, Case No. 25-689. Those four cases became the lead matters for ongoing refund-related proceedings.

The Play Reaches the Crisis Point: What Happened at the CIT in May and June 2026?

In late May 2026, Judge Eaton signaled increasing concern with the pace and scope of the government’s compliance. On May 27, in V.O.S. Selections, Judge Eaton ordered briefing on whether the stay should be lifted and whether the government should be required to comply immediately with the refund order. He also directed CBP Commissioner Rodney S. Scott to appear at a June 9 hearing to address the timing of CBP’s compliance. In Euro-Notions, Judge Eaton separately required another CAPE status report and scheduled a June 11 conference.

On May 29, the government asked the CIT to excuse Commissioner Scott’s appearance and allow lower-ranking officials to appear instead. The CIT denied that request. More importantly, in that briefing, the government made explicit what it had previously only implied: it intended to appeal the CIT’s refund orders on the ground that they amounted to an impermissible universal injunction because they ordered relief for both parties and non-parties that had not filed protective Section 1581(i) actions. The government further stated that, as to finally liquidated entries, it would seek a stay of the refund orders except for the named plaintiffs in the cases before the court.

On June 3, the government filed notices of appeal in the Federal Circuit in V.O.S. Selections, Euro-Notions, AGS Company, and Grant & Bowman, and moved to consolidate those appeals. The government also separately appealed the order requiring Commissioner Scott to appear, and the Federal Circuit promptly stayed that order, leading Judge Eaton to modify the order to permit other CBP representatives to appear instead.

Meanwhile, on June 4, the parties in V.O.S. Selections briefed whether the stay of compliance should remain in place. The government again argued that the refund orders were impermissibly universal, while plaintiffs disagreed but acknowledged that immediate full compliance was not necessary while the appeal is pending. Also on June 4, Terry Precision Cycling, a plaintiff in another Section 1581(i) case, moved in V.O.S. Selections to certify a class of importers with IEEPA tariff refund claims not currently eligible for processing through CAPE, taking advantage of an exception to the universal injunction rule that allows for class actions with universal application to a class of plaintiffs. The government’s response is due June 25, 2026.

At the June 9 hearing, a CBP representative testified that CAPE Phase 3 entries — a category of entries including finally liquidated entries — will start being processed for refunds. The CBP representative repeated the government’s earlier argument that such entries could only be processed for importers that have filed Section 1581(i) actions before the CIT. The representative also stated that CAPE Phase 2 entries — a category of entries including reconciliation entries and entries involving AD/CVD issues — will launch on June 29.

The Ending of the Play Is Unknown: Action Moves to the Federal Circuit

It is not clear how the Federal Circuit will resolve the government’s appeal of the CIT’s refund orders. Based on its recent submissions, the government likely will rely heavily on the Supreme Court’s decision in Trump v. CASA, 606 U.S. 831 (2025), arguing that Judge Eaton’s orders operate as impermissible universal injunctions by requiring relief for importers beyond the named plaintiffs before the court. The government will likely also argue that it is complying with the CIT’s orders to the extent administratively feasible through CAPE and that any importer seeking refunds for finally liquidated entries has an adequate path to relief by filing its own Section 1581(i) action.

Plaintiffs, by contrast, are likely to argue that CASA does not control. The CIT is not an ordinary district court, and its statutory jurisdiction over customs matters is uniquely tied to the administration of a uniform tariff regime. From that perspective, an order requiring CBP to refund unlawfully collected tariffs on a uniform basis is not an improper extension of relief to strangers to the case but a necessary consequence of the court’s role in supervising the lawful administration of customs duties. Plaintiffs are also likely to argue that limiting refunds for finally liquidated entries to importers that filed protective Section 1581(i) actions would undermine the constitutional and statutory requirement of uniformity in customs duties by allowing the government to retain unlawful tariff payments from some importers while refunding identical payments to others.

There also is room for Plaintiffs to argue that the statutory provisions blocking refunds of “finally liquidated” entries are not applicable at all. The entire Customs and tariff statutory structure is premised on the presumption that the tariffs collected were lawful, with the statute then setting 90 days after liquidation as the date that liquidation becomes final for these lawful tariffs. Here, however, the Supreme Court has stated that the IEEPA tariffs were unlawful from the start. There accordingly is room to argue that any rules regarding the finality of liquidation are moot in this particular context. Or, to put it another way, in case there is any tension between the Supreme Court’s ruling and the statute when it comes to refunds, the Supreme Court decision trumps the statute, not the other way around.

An additional distinction that may prove important is that this case does not present the usual concern animating objections to nationwide or universal injunctions. In the ordinary case, the objection is that a single trial court is effectively making policy for the entire country before the merits have been finally settled. Here, by contrast, the merits have already been resolved by the Supreme Court: the IEEPA tariffs were unlawful. The question is therefore not whether relief should be granted in the first instance, but whether the CIT may require the government to implement that merits determination on a uniform basis. That posture may make this case materially different from the paradigm case addressed in CASA.

Even if plaintiffs ultimately have the better legal argument, however, the government’s appeal introduces real uncertainty — and potentially significant delays — for importers that have not already filed Section 1581(i) protective actions. Although our view is that plaintiffs ultimately have the stronger legal argument, there is no question that the filing of the appeal divides the world of IEEPA tariff refunds that fall outside of Phase 1 into two categories: the IEEPA tariff refund “haves” (those that have filed protective Section 1581(i) actions at the CIT) and the “have-nots” (those that have not filed such actions). Ongoing litigation could lead to material delays and other administrative hurdles for importers that have not filed Section 1581(i) actions in the CIT and, perhaps, an inability to claim refunds of finally liquidated or other non-Phase 1 entries.

Why Is the Set of Finally Liquidated IEEPA Tariff Entries Important?

In some respects, the government has moved surprisingly quickly to implement refunds. It has represented that more than $95 billion of the approximately $166 billion in IEEPA tariff payments has already been queued for refund through the CAPE system. CBP has stated that, by the end of June, more than $40 billion should actually have been paid out. For many importers, significant money in the bank is significant and welcome progress.

The problem is that the category of entries the government is now contesting is still very large — potentially more than $30 billion. That category consists of entries that were liquidated more than 80 days ago and are therefore “finally liquidated” under the government’s current view of CAPE Phase 1.

At first glance, that category might appear relatively narrow. CBP often liquidates entries within approximately 314 days after importation. Because the earliest IEEPA tariffs took effect on February 4, 2025, one might assume that only a limited set of early 2025 entries could have become finally liquidated by the time the Supreme Court struck down the tariffs in late February 2026.

In practice, however, CBP frequently liquidates entries much sooner than 314 days after importation. In some cases — particularly lower-value or informal entries — liquidation may occur automatically and on a faster timetable. The filing of post-summary corrections also can result in earlier liquidation. As a result, for many importers, the universe of entries that may already be more than 80 days past liquidation is much broader than it first appears.

That is why the dispute matters so much. For importers with significant volumes of lower-value or quickly liquidated entries, the amount at stake may be considerable, and the risk is not limited to a small pool of early-2025 imports.

Bottom Line: What Should Importers Do Now to Best Preserve IEEPA Tariff Refund Opportunities?

The government’s position is now established: there may never be a CAPE Phase 2, or, if there is, it may not ever cover all remaining (non-Phase 1) entries. Although CBP has made meaningful progress in processing refunds for entries within CAPE Phase 1, CBP will align with the position of the DOJ that importers that have not filed protective actions under 28 U.S.C. § 1581(i) should wait, perhaps forever, for certain categories of IEEPA tariff refunds.

For that reason, the most prudent course for importers that want to maximize and preserve their refund rights is twofold: first, continue pursuing refunds through the government’s CAPE process; and second, seriously consider filing a protective Section 1581(i) action in the CIT. CAPE may well deliver refunds for many entries, but a Section 1581(i) action remains the best available tool for preserving an importer’s independent right to seek recovery if the government continues to resist broader relief for finally liquidated entries or other categories outside CAPE Phase 1.

This calculus also extends to other categories of entries that do not appear to be included in CAPE Phase 1, most notably reconciliation entries (which are subject to planned coverage in CAPE Phase 2) and entries involving AD/CVD issues. The timing for refunds of those entries remains uncertain, and there is at least some possibility that disputes over those categories could become wrapped into the government’s broader appellate arguments about the scope of relief available to non-parties. For importers with significant volumes of reconciliation entries or AD/CVD-affected entries, there may therefore be an additional advantage to filing a protective Section 1581(i) action: parties before the CIT may be better positioned to seek earlier or more targeted relief for those entries, while non-parties may be forced to wait and see how the litigation develops.

This is especially important for importers that have a meaningful number of entries liquidated more than 80 days ago, importers with large volumes of lower-value entries that may have liquidated quickly, and importers with entries subject to reconciliation or AD/CVD complications. For those companies, the downside of inaction may be significant: absent a protective filing, the importer could find itself dependent on the outcome of appellate litigation over the scope of the CIT’s authority, with no guarantee that refunds for all affected entries will be preserved.

A protective Section 1581(i) filing does not require an importer to abandon CAPE or to assume that litigation will ultimately be necessary on every entry. Rather, it serves as an insurance policy. It preserves the importer’s own claim to relief while the courts sort out whether the government can lawfully withhold refunds from non-parties for finally liquidated or otherwise excluded entries. In the current environment, where the government has appealed and is expressly challenging the availability of broader relief, that protection may prove critical.

If you would like more information about potentially filing a Section 1581(i) protective filing, please reach out to the authors or your �鶹ֱ�� relationship attorney.

Cryptocurrency investment scams perpetrated by transnational criminal organizations (TCOs) located in Southeast Asia are on the rise. Colloquially known as “pig-butchering” scams, TCOs build trust with victims, convince victims to invest in real cryptocurrency, and then con victims into transferring the real cryptocurrency into fake cryptocurrency investments. The TCO scammers then launder the cryptocurrency through sophisticated methods to include the utilization of accounts that are outside of U.S. jurisdiction. According to the U.S. Secret Service (“USSS”), “this scam industry defrauds Americans of nearly $10 billion per year.”[1] Now,  the U.S. Attorney’s office for the District of Columbia has announced it has a plan to stop them.

On November 12, 2025, U.S. Attorney for the District of Columbia Jeanine Ferris Pirro announced the creation of the Scam Center Strike Force (“Strike Force”) in partnership with several law enforcement and Federal agency partners.[2] The Strike Force’s stated goal is to “secure America against Southeast Asian cryptocurrency-related fraud and scams”[3] by recovering stolen assets used to evade sanctions and facilitate scams and returning those assets to victims.

Civil Forfeiture As A Long-Armed Enforcement Tool

The Strike Force will use civil forfeiture actions to reclaim not just the stolen funds but also the infrastructure utilized to facilitate the scams, such as satellite terminals used for internet connection.   While the seizure of property does require judicially authorized warrants, subsequent civil forfeiture actions do not require any initiation of criminal proceedings. These actions are against the property itself and do not require the property to be owned or in the actual custody of the perpetrators of the alleged criminal activity at the time of the seizure.  The government must only explain in the warrant by a preponderance of the evidence, or more likely than not, that the property is linked to criminal activity. If the government can meet this low burden, law enforcement officials have the authority to seize and take control of the property for eventual forfeiture.

The DOJ’s civil forfeiture authority is extremely broad and can pose significant complications for those whose property is seized.  Property owners with no actual knowledge of the alleged criminal activity may still lose possession of their items, which can be difficult and time-consuming to contest, as the property owners must both establish ownership of the property and in some instances prove that the property was not connected to a crime. However, proponents counter that civil forfeiture is an essential tool in combating organized crime as the seizure of criminal enterprises’ assets and proceeds materially disrupts their operations. 

Despite their arguments to the contrary, foreign-based cryptocurrency exchanges are not beyond the reach of U.S. jurisdiction in the context of civil forfeiture. Statutes empowering the Strike Force to engage in civil forfeiture, such as the terrorism subsection of the Civil forfeiture statute, [4] explicitly extend to foreign and domestic assets. DOJ has strong policy and enforcement incentives to use civil forfeiture proceedings under this statute against TCOs, particularly those designated as Foreign Terrorist Organizations.

Targets and Trends

The Strike Force is identified and focused on Chinese-organized crime affiliates with operations in Cambodia, Laos, and Burma as key leaders of these cryptocurrency investment schemes. The Strike Force has already conducted operations in Myanmar, Indonesia, and Thailand, and has seized and forfeited over $400 million dollars in scam-obtained cryptocurrency funds. As part of U.S. Attorney Piro’s November 12 Strike Force announcement, she noted the Strike Force has initiated civil forfeiture proceedings seeking another $80 million in stolen funds.

Though the Strike Force is focused on Southeast Asia, the rise of cryptocurrency investment scams is a global trend. For example, on November 14, 2025, the Department of Justice announced five guilty pleas and over $15 million in civil forfeiture actions against the Democratic People’s Republic of Korea for “multimillion-dollar virtual currency heists at four overseas virtual currency platforms in 2023,” among other charges.[5] In addition, on October 14, 2025, the DOJ announced the largest ever forfeiture action against approximately $15 billion in Bitcoin tied to a multinational business conglomerate’s alleged involvement in cryptocurrency investment fraud schemes run through forced labor compounds.[6] The Bitcoin was previously stored in unhosted digital wallets whose private keys the chairman and founder of the conglomerate had in his possession.

Moreover, the Strike Force is aligned with a broader shift in U.S. strategy for addressing cryptocurrency scams. In April 2025, U.S. Deputy Attorney General Todd Blanche published a memorandum titled “Ending Regulation by Prosecution,” which outlined the DOJ’s approach to digital asset enforcement under the Trump Administration.[7] Blanche stated that the DOJ would “focus on prosecuting individuals who victimize digital asset investors, or those who use digital assets in furtherance of criminal offenses such as terrorism, narcotics and human trafficking, organized crime, hacking, and cartel and gang financing.”[8] Further, DOJ prosecutors would start prioritizing cases “that hold accountable individuals who (a) cause financial harm to digital asset investors and consumers; and/or (b) use digital assets in furtherance of other criminal conduct.”[9] The Strike Force is a clear step in this direction.

How To Prepare for the Strike Force’s Increased Enforcement

Corporations operating in sectors related to cryptocurrency or any companies dealing in large sums of digital assets on foreign exchanges should consider the creation of the Strike Force a warning sign that their assets may be at risk of being frozen even absent direct criminal exposure. Notably, the laws authorizing the Strike Force’s activity can be applied to persons that arguably facilitate violations or are strictly liable, including situations where the person “should have known” that they were facilitating a violation.

Given the heightened enforcement risk, those in the cryptocurrency space should engage in the following best practices:

• Implement robust anti-money laundering (AML) and know your customer (KYC) programs to ensure regulatory compliance.  
• Maintain detailed records surrounding trades, transactions, and internal communications to assist in challenging government-initiated forfeiture actions. 
• Consider utilizing blockchain analytic tools to ensure compliance with regulatory measures and establishing relationships with cryptocurrency forensic experts in order to ensure adequate preparation for contested forfeiture proceedings should there be a need to challenge government tracing methodologies or to assert “innocent owner” defenses.  
• Establish mechanisms for responding to any U.S. or foreign government inquiries and legal process demands, as cryptocurrency-related investigations frequently involve international cooperation among law enforcement and government agencies. This is particularly true for non-U.S. companies.

If you have questions or concerns about the issues raised in this article, please reach out to any of the authors or your �鶹ֱ�� & Lardner attorney.

The �鶹ֱ�� International Government Enforcement Defense & Investigations Team is monitoring all international trade, government enforcement, and regulatory developments, which we are posting as they occur on our Tariff & International Trade Resources blog. For additional resources surrounding the mitigation of risks posed by the Administration’s crackdown on FTOs and the DOJ’s utilization of civil forfeiture authorities, our article on “Foreign Terrorist Organization Designations Provide DOJ With New Civil Forfeiture Authorities and Opportunities/,” provides additional compliance assessment information. If you would like to see future updates on related topics, please sign up for our Tariff & International Trade blog — 

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[1] Press Release, New Scam Center Strike Force Battles Southeast Asian Crypto Investment Fraud Targeting Americans, U.S. Secret Serv. (Nov. 12, 2025), .

[2] The Strike Force is a collaboration between the U.S. Attorney’s Office for the District of Columbia, the Department of Justice (“DOJ”) Criminal Division, the Federal Bureau of Investigation (“FBI”), USSS, the State Department, the Department of Treasury’s Office of Foreign Assets Control, and the Department of Commerce. Id.

[3] Id.

[4] See 18 U.S.C. Section 981(a)(1)(G).

[5] See Press Release, Justice Department Announces Nationwide Actions to Combat Illicit North Korean Government Revenue Generation, U.S. Dep’t Just. (Nov. 14, 2025), .

[6] See Chairman of Prince Group Indicted for Operating Cambodian Forced Labor Scam Compounds Engaged in Cryptocurrency Fraud Schemes, U.S. Department of Justice (Oct. 14, 2025),

[7] Memorandum from Deputy Attorney General Todd Blanche, Ending Regulation By Prosecution (Apr. 7, 2025), .

[8] Id. at 1.

[9] Id. at 2.

As long-time readers of our biweekly series know from our last Thanksgiving’s compliance parody, Paul Simon originally planned to become a lawyer and even attended Brooklyn Law School for a semester. So, in honor of the career that might have been — Paul Simon’s work as a leading lawyer and compliance specialist — we thought we would celebrate the 50th anniversary of the release of Simon and Garfunkel’s first album with some further musings on Simon’s life as a compliance specialist. But first, here are a few little-known facts about Simon & Garfunkel’s first hit song:

• “Wednesday Morning, 3 AM,” which included a song you may have heard of, called “The Sounds of Silence,” was released in October 1964 and was a flop, selling only 3,000 copies and receiving no airplay. This led to both musicians temporarily abandoning their hopes of becoming recording artists, with Art Garfunkel going back to school to pursue a teaching degree in math and Paul Simon leaving the country.

• Totally unknown to either of the musicians, a producer at their record label decided to record an overlay of electric guitars, bass, and percussion for “The Sounds of Silence,” to take advantage of the growing popularity of electronic folk music. An amazed Paul Simon first found out when he bought a copy of a music magazine at a newsstand and saw that the number-one song was “The Sounds of Silence.”

• Although the song was originally released under the title of “The Sounds of Silence,” when it was re-released on Simon & Garfunkel’s second album, it was titled “The Sound of Silence,” which was a bit confusing because the album itself was titled “The Sounds of Silence.” But new research reveals that the title was all along intended to be …

The Missing Sound of Compliance

Hello, compliance, my old friend,
No one came to train again.
Compliance standards softly slipping,
Missing rules we’re not keeping.
And the warnings, that were written in our Code,
A useless bode.
The missing sound, of compliance.

In corporate halls I walk alone,
Internal controls left unknown.
‘Neath the halo of a dim desk light,
Our lack of training is a blight.
And my eyes were stabbed, by red flags all ignored,
Why bug the Board?
The missing sound, of compliance.

And in the light of day I saw,
Ten thousand workers, maybe more.
People working without knowing,
Compliance failures, all growing.
People signing certs they didn’t care to check,
What the heck?
The missing sound, of compliance.

“Fools,” said I, “you do not know!
Non-compliance makes trouble grow.
You brush aside every regulation,
As if it’s just an irritation.”
But my words, like silent red flags fell,
Whistleblower death knell.
The missing sound, of compliance.

And this lawyer bowed and prayed,
To the standards that I made.
Our Code flashed warnings loud and clear,
Through every audit that I revered.
And my emails said, “the rules are covered on our ethics calls!”
Ignored by all.
The missing sound, of compliance.

So it finally came to me,
This compliance reality.
Compliance needs backing from the top,
If they don’t care, it will all flop.
Employees take cues from management and the Board,
Get them aboard.
From them there can be, no silence.

Looking for more articles on the lighter side of compliance? Try out There Must Be Fifty Ways to Leave Your Agent, Internal Investigations Are a Poe Substitute for Compliance, The Grinch Who Stole Compliance, Peter Rabbit Discovers Compliance!, and The Compliance Mash! And if you would like to sign up for our biweekly series on “What Every Multinational Company Should Know About” various international trade and regulatory issues, .