U.S. Customs and Border Protection (CBP) has issued a notice establishing a new Court-Ordered Refunds under IEEPA Worksheet and related automated processing procedures through the Automated Commercial Environment (ACE) and the CBP Automated Processing Environment (CAPE). The notice states that the Supreme Court ruled on February 20, 2026 that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) and collected since February 3, 2025 were unlawful, and that CBP must now prepare to process refunds at unprecedented scale: an estimated $166 billion across more than 53 million entry summaries.

This is one of the largest customs refund processes in U.S. history. The operational and legal implications for importers, customs brokers, distributors, and companies that passed tariff costs through to customers are immediate and significant.

The Trump administration imposed tariffs under IEEPA beginning February 3, 2025, asserting that the statute authorized broad tariff authority in response to declared national emergencies. The tariffs applied to imports from a wide range of countries and covered a broad spectrum of goods.

Legal challenges to the IEEPA tariffs proceeded through the federal courts. On February 20, 2026, the Supreme Court issued a ruling holding that the IEEPA tariffs were unlawful. The ruling requires CBP to refund tariff amounts collected under IEEPA authority from February 3, 2025 through the date the tariffs were enjoined or otherwise ceased to be collected — a period CBP's notice identifies as running through approximately February 24, 2026.

The refund obligation does not extend to:

• Antidumping (AD) duties
• Countervailing (CVD) duties
• Section 232 duties (steel, aluminum, and derivatives)
• Ordinary (MFN/column 1) duties
• Taxes and fees (Harbor Maintenance Fee, Merchandise Processing Fee, etc.)

Only the IEEPA-specific tariff component of each entry is subject to refund. Importers must carefully segregate IEEPA amounts from other duty and fee components in their entry summaries.

CBP's notice establishes the following operational framework for processing refunds:

Court-Ordered Refunds under IEEPA Worksheet. CBP has created a new worksheet format for importers and customs brokers to submit refund claims through ACE. The worksheet captures entry summary data, IEEPA duty amounts, and payment information.

CAPE Submissions. Refund claims will be submitted through CAPE (CBP Automated Processing Environment), CBP's automated processing system. Each CAPE submission may include up to 9,999 entry summaries per declaration. Importers with large entry volumes — particularly those with thousands of entries during the February 2025 – February 2026 period — will need to structure their submissions accordingly.

Electronic Refunds. CBP's notice states that refunds will generally be issued electronically rather than by paper check. Importers must ensure that their ACH (Automated Clearing House) refund information on file with CBP is current and accurate. Outdated or incorrect ACH information will delay refund processing.

ACE Account Access. Importers must have active, properly configured ACE accounts to participate in the refund process. Companies that have not maintained active ACE access — or whose ACE account contacts have changed — should address this immediately.

Step 1: Identify Covered Entries

Pull all entry summaries filed between February 3, 2025 and February 24, 2026. For each entry, identify whether IEEPA tariffs were assessed and the specific IEEPA duty amount. This requires access to entry summary data in ACE or through your customs broker's records.

Step 2: Segregate IEEPA Amounts

IEEPA duty amounts must be separated from all other duty and fee components: AD/CVD duties, Section 232 duties, ordinary duties, Harbor Maintenance Fee, Merchandise Processing Fee, and any other charges. Only the IEEPA-specific component is refundable. Mixing IEEPA and non-IEEPA amounts in refund claims will result in processing errors or denial.

Step 3: Verify ACE Account and ACH Information

Confirm that your ACE account is active and that your ACH refund payment information is current. If your banking information has changed since the original duty payments were made, update it in ACE before submitting refund claims.

Step 4: Engage Your Customs Broker

If you used a customs broker for the covered entries, coordinate with the broker on the refund submission process. Customs brokers who filed entries on behalf of importers may have standing to submit refund claims, but the ultimate refund recipient and the allocation of refund proceeds between importer and broker should be clarified in advance.

Step 5: Review Contractual Obligations

Before submitting refund claims, review your supply chain contracts for provisions that may affect who is entitled to the refund proceeds. See the contractual analysis below.

The IEEPA tariff refund process raises significant contractual questions for companies that passed tariff costs through to customers, shared tariff costs with suppliers, or entered into tariff-related price adjustments during the covered period.

Tariff Pass-Through Clauses

Many supply contracts executed during 2025 included tariff pass-through provisions under which the seller was entitled to increase prices to reflect tariff costs, or under which the buyer agreed to reimburse the seller for tariff amounts. If a seller passed IEEPA tariff costs through to a buyer and now receives a CBP refund for those same tariffs, the buyer may have a contractual claim to some or all of the refund proceeds.

The analysis depends on the specific contract language. Pass-through clauses that entitle the seller to recover "tariff costs actually paid" may create an obligation to share refunds when those costs are subsequently refunded. Clauses that simply adjust the contract price without creating a reimbursement structure may not. Each contract must be reviewed on its own terms.

Price-Adjustment Clauses

Contracts with price-adjustment mechanisms tied to tariff rates — including escalation clauses, material cost adjustments, and force majeure-based price relief provisions — may need to be revisited in light of the refund. If prices were adjusted upward to reflect IEEPA tariffs, and those tariffs are now being refunded, counterparties may seek corresponding price adjustments downward.

Refund-Sharing Agreements

Some companies entered into explicit refund-sharing or tariff-recovery agreements during the IEEPA tariff period, anticipating potential legal challenges. These agreements should be reviewed to confirm their applicability to the CBP refund process and to determine the allocation of refund proceeds.

Reimbursement Clauses in Distribution Agreements

Distributors and resellers who absorbed IEEPA tariff costs — either by paying them directly or by accepting reduced margins from suppliers who passed costs through — should review their distribution agreements for reimbursement or margin-protection provisions that may be triggered by the refund.

Turkish exporters to the U.S. Turkish companies that exported goods to the U.S. during the February 2025 – February 2026 period and whose U.S. customers paid IEEPA tariffs on those imports should communicate with their U.S. customers about the refund process. Depending on the contract structure, Turkish exporters may have obligations to assist with refund documentation or may have contractual exposure if pass-through arrangements are revisited.

Turkish companies with U.S. import operations. Turkish-owned companies or subsidiaries operating in the U.S. that imported goods during the covered period should treat this as a priority compliance and financial recovery matter. The refund amounts can be material — IEEPA tariff rates ranged from 10% to 145% depending on the country of origin and product category.

M&A due diligence. For M&A transactions involving U.S. companies with significant import operations during the covered period, the IEEPA refund receivable is a balance sheet asset that should be identified, quantified, and addressed in the transaction. Buyers should confirm that the target has taken steps to preserve its refund rights; sellers should ensure that refund receivables are properly valued and allocated in the purchase price mechanics.

Customs compliance review. The IEEPA refund process requires importers to have accurate, complete entry summary records for a 12-month period. Companies that discover gaps in their customs records during this process should treat it as a signal to conduct a broader customs compliance review.

ULF New York advises Turkish companies and investors on U.S. customs law, trade compliance, and cross-border supply chain matters, including IEEPA tariff refund claims and contractual refund-sharing analysis.