The news: About 20,000 IEEPA tariff refunds, worth $1.1 billion, are stuck at CBP because the importers never gave it a bank account for refunds.
Implications:
Your refund account: Paying duties by ACH doesn’t mean CBP can pay you back, because refunds need their own setup in ACE.
Rejected refunds: A refund CBP couldn’t send won’t go out again until you enroll and tell CBP you did.
Check now: ACE report REV-613 lists any of your refunds that were rejected this way.
The News
U.S. Customs and Border Protection was holding 20,362 refunds of IEEPA tariffs, worth about $1.1 billion, because the importers owed that money never set up a bank account to receive them, CBP said in its latest sworn declaration to the Court of International Trade. The same filing shows CBP has sent about $126 billion in refunds to the Treasury for payment, so the stuck refunds are a small share of the total. CBP has now updated its FAQ walking importers through the setup again.
Why It Matters
CBP now pays refunds by electronic transfer with rare exceptions, and an importer that has paid duties by ACH for years can still have no refund account on file, because the two are set up separately. Until one is added, CBP’s refund page says, the refund “will not be paid until that information is provided.”
Zoom In
The number of stuck refunds has stayed near 20,000 across CBP’s last four reports to the court, while the dollars tied up fell from about $1.7 billion in August to $1.1 billion. The latest count of 20,362 is up slightly from the 20,184 we reported in mid-September.
Finding and releasing a stuck refund takes four steps, according to CBP’s FAQ and its replacement refund instructions:
Run REV-613: this ACE report lists refunds CBP rejected because no ACH enrollment was on file.
Set up the refund account: in the ACE Portal, the Importer sub-account has an ACH Refund Authorization tab, where the bank details show only after clicking “Get Info/Refresh.” Each importer of record number needs its own sub-account, and the bank has to accept FedACH payments.
Tell CBP: once the account is in, CBP’s instructions say to notify its ACH refund mailbox, [email protected].
Keep the portal user’s contacts current: any change to refund bank details now needs a security token sent by email, or text if chosen, to the ACE Portal user making it, so a stale address stops the change.
What It Costs
On average, $1.1 billion across 20,362 refunds works out to about $54,000 per refund, by our math, though some refunds bundle many entries and others cover just one. CBP tells importers to allow four to six weeks once a replacement request is accepted, so a company that fixes its account this week would still wait more than a month for the money.
Who’s Exposed
Four kinds of importers are at risk of having money stuck:
Importers that pay duties by ACH: they may assume CBP already has their bank details, but the refund account is a separate setup and can differ from the one used to pay.
Foreign importers: ACH refunds need a U.S. bank account, so those without one have to name a U.S. customs broker on CBP Form 4811 to receive the refund for them.
Companies with several importer numbers: each importer of record number needs its own sub-account, even when all of them pay into one bank account.
Importers whose broker collects the refund: the broker named on Form 4811 has to be enrolled for ACH refunds too, or CBP can't pay it.
What’s Next
Oct. 22: the government and the importers in the class case propose a schedule. The court has certified a class of importers that never sued, which could open refunds on entries that are closed today, and that money would need the same refund account.
Oct. 26: CBP files its next refund report with the trade court, which will show whether the stuck count is falling.
Dig Deeper
