Trade Lawyer: Government to Make IEEPA Refund Process as Difficult as Possible
The U.S. government will try to make it very difficult for tariffs enacted through the International Emergency Economic Powers Act to be refunded should the Supreme Court vacate them, according to trade lawyer Michael Roll.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Roll said on a webinar he hosted Sept. 25 that he thinks "the government's going to make it as hard as possible to get refunds" for tariffs enacted through IEEPA. He said that the more difficult the government can make the refund process, the more importers "are going to have to lawyer up" and by forcing importers to go to court, "the less money they'll have to give back. And I personally think that's what they're going to do."
Roll joined other law firms with the message that importers must take action (see 2509160049): "If you're an importer who's paid these tariffs and you want them back, ... you need to do something." No one should "just assume" that they will get a refund, he said. "This is not Alice in Wonderland, where the government, if it loses, is going to just start saying, 'Okay, we lost, and we're going to give all the money back.'" How hard the government is "going to fight, dig in," remains to be seen, he said, but importers need to be proactive to "protect your rights."
Importers have three options for pursuing refunds, Roll said. They can extend liquidation on their entries, file a protest, or take the government to court. Extending liquidation can be problematic for importers, he said, because of the collateral they may have had to pay to back up bonds, which have increased with tariff rates. If importers extend liquidation, he said, "I'm not going to say you can kiss your collateral goodbye, but it'll certainly put off the day ... you can get back your collateral."
As for protests, Roll said that they are "not a guaranteed outcome," because CBP does not have to act on the protest. "If the government wants to play hardball and limit the financial bleeding," he said. "They could just deny your protest." Additionally, he said that if importers are in CBP's reconciliation program, then filing protests "will definitely gum up the works on your reconciliation filings" because you cannot complete reconciliation until the protests are decided. The same principle applies to drawback filing, he said.
Roll said that importers need to start having these discussions now because, "the day the court rules the tariffs are illegal, there's going to be one long line at the proverbial courthouse." This will cause a "lawyer capacity issue," he said, because there are a limited number of lawyers able to practice at the CIT. "There will be bandwidth issues, and I'm sure we'll all figure it out, but you might be waiting in line for a while to get your refund," he said.