Each phase of the Consolidated Administration and Processing of Entries (CAPE) refund system has unlocked additional refunds for importers who paid IEEPA tariffs and are seeking reimbursement. Most recently, on October 6, CBP deployed Phase 3 for finally liquidated entries tied to importers involved in the Freestyle World v. United States litigation. For many importers, that’s welcome news. Refunds are flowing via ACH and all seems right in the world. But for those of us living in the drawback universe, we’re still waiting for the next chapter that we’re calling “Phase X”. This phase is important for any company who may have filed a drawback claim for entries that contained IEEPA refunds. Even if the MFN rate is all that is claimed, it prevents a CAPE request from being submitted for those import entries.
Why the mysterious “X”? Because drawback doesn’t exactly fit into a neat refund box. Drawback is a post-entry process with enough twists, turns, and plot twists to keep any customs programmer up at night. With drawback, the amount of duty remaining on an entry can vary based on direct identification versus substitution methodologies. Add tariff stacking rules, maximum duty limitations, and reconciliation adjustments, and you’ve got a puzzle that would make even the most seasoned ACE developer reach for another cup of coffee.
Think of it as a complicated relationship. CAPE and standard refunds are already getting along quite well. CAPE and drawback? Well, they’re still figuring out where the relationship is headed. There are a lot of moving parts, and nobody wants to make things official until all the details are sorted out. So, until we hear otherwise, we’ll continue referring to drawback’s future place in CAPE as “Phase X”. Like every good sequel, we’re optimistic it’s coming. We just don’t know when the release date will be announced.
