Phase three of the Consolidated Administration and Processing of Entries (CAPE) tariff refund tool will be ready by the end of July. U.S. Customs and Border Protection (CBP) confirmed that timeline at a June 9, 2026 hearing in the U.S. Court of International Trade (CIT). Susan Thomas, executive assistant commissioner for CBP’s trade office, delivered the update before Senior Judge Richard K. Eaton. The case is V.O.S. Selections, Inc. v. United States (Court No. 25-00066).
However, the federal government continues to contest the legal basis for refunds on finally liquidated entries. As a result, it remains unclear whether refunds will actually flow once the technical capability is in place.
CBP CONFIRMS PHASE 3 WILL COVER FINALLY LIQUIDATED IEEPA ENTRIES
CAPE Phase 3 will address finally liquidated entries that paid International Emergency Economic Powers Act (IEEPA) tariffs. According to Thomas, programming for Phase 3 will be ready in late July 2026. In addition, Phase 3 will require importer of record numbers. This step ensures that refunds reach the correct importers and guards against erroneous payments on entries where verification is more complex.
However, technical readiness does not guarantee that refunds will follow. The DOJ continues to argue that CBP lacks authority to reliquidate finally liquidated entries without an individual lawsuit. That position is now before both the CIT and the U.S. Court of Appeals for the Federal Circuit.
PHASE 2 RECONCILIATION ENTRIES LAUNCH SET FOR JUNE 29, 2026
In addition to the Phase 3 timeline, Thomas confirmed that Phase 2 of CAPE remains on track for a June 29, 2026 launch. Phase 2 will address entries flagged for reconciliation, which are entries subject to post-filing adjustments. The government first announced the June 29 launch date in a response to a May 27 order from Judge Eaton.
CBP launched Phase 1 of CAPE on April 20, 2026. The launch followed the U.S. Supreme Court’s February 2026 ruling that tariffs imposed under IEEPA were unlawful. Phase 1 was generally limited to unliquidated entries and entries liquidated within the prior 80 days. According to CBP, that scope covered an estimated 63 percent of affected entries.
REFUND TOTALS REPORTED TO THE COURT
According to declarations filed with the CIT, around 330,000 importers paid or deposited an estimated $166 billion in IEEPA duties. Those duties were spread across more than 53 million entries. So far, CBP has processed more than 16 million entries under Phase 1. In addition, CBP has accepted more than $89 billion in potential and certified IEEPA refunds for processing. Of that total, roughly $22 billion has moved to the U.S. Department of the Treasury for disbursement.
Both the plaintiffs, led by V.O.S. Selections, and the United States told the court that the current pace of CAPE development has been acceptable. Both sides also indicated that ordering CBP to refund every duty at once would slow progress. Thomas stated that trying to refund every type of entry simultaneously would significantly slow the process.
DOJ POSITION ON FINALLY LIQUIDATED ENTRIES
Claudia Burke, counsel for the United States, told the court that CBP can ready CAPE for Phase 3 but cannot process finally liquidated entries for refunds. Burke suggested that the CIT itself was the main holdup. According to Burke, the court could simply create a list of importers who filed suit. CBP could then issue refunds to those companies.
In its June 4 court filing, DOJ stated that “Congress has not given CBP the authority to pay refunds on entries that are liquidated and final.” The filing added that to make refunds available for such entries, “an importer must file suit in this Court, and the Court must enter an importer-specific order.” Furthermore, the government noted that CBP has already accepted nearly $90 billion in refunds while the suspension of immediate compliance remains in place. According to the filing, the injunction is not needed to deliver refunds where CAPE functionality already exists.
THE FEDERAL CIRCUIT APPEAL
On May 29, 2026, the DOJ filed a notice of appeal and a motion to amend the CIT’s order. The filings went to the U.S. Court of Appeals for the Federal Circuit. The petition for a writ of mandamus argues that universal injunctions are unlawful under the Supreme Court’s 2025 ruling in Trump v. CASA. The CIT had previously distinguished CASA from its own authority. However, the government’s June 4 filing pointed to the Federal Circuit’s en banc decision in V.O.S. Selections, which vacated an earlier universal injunction based on CASA.
The DOJ filing also argued that the CIT failed to apply the equitable factors for injunctive relief required by the Federal Circuit’s en banc IEEPA decision. In addition, the government argued that the universal injunction disregarded party-presentation principles. According to the filing, no party had a pending request for a preliminary injunction.
JUDGE EATON’S QUESTIONS AT THE JUNE 9 HEARING
During the hearing, Judge Eaton pressed Burke on the rationale for the appeal. He noted that the United States appeared willing to provide refunds. Eaton then asked why the government was pursuing the appeal. He also suggested a path forward. According to the judge, the government could include a stipulation to limit the decision to this case if it wanted to avoid setting precedent.
Burke responded that the decision in this case could set precedent for the similar ongoing litigation over Section 122 tariffs. However, she did not concede whether the United States would win or lose that matter.
Eaton also raised the issue of liquidation deadlines. Thomas confirmed that she had not extended liquidation deadlines for entries after the Supreme Court’s February 2026 ruling. Consequently, Eaton said this action, or inaction, has resulted in more entries becoming liquidated. He then asked Thomas to consider extending those deadlines.
PLAINTIFF ARGUMENTS AND CLASS CERTIFICATION
Counsel for V.O.S. Selections, argued that no legal statute requires a court order to issue refunds on finally liquidated entries. According to plaintiffs, the United States is selecting which companies can receive refunds by limiting recovery to importers who file suit at the CIT.
Counsel also pointed to Terry Precision Cycling’s pending motion for class certification, arguing that if the government is committed to refunds but worried about CASA, it should not oppose that motion. However, Eaton expressed reservations about that path. “It would be disappointing to me if we go into the world of class actions,” he said during the hearing.
CBP’S STATED CAPACITY CONSTRAINTS
In its June 4 filing, the government also addressed broader capacity issues at CBP. According to the filing, diverting additional resources to the refund process could affect the agency’s other trade enforcement functions. Specifically, the filing cited duties that include detecting false declarations of country of origin, addressing free trade agreement abuse, preventing forced-labor goods from entering the country, and addressing antidumping and countervailing duty evasion.
Thomas also told the court that CBP designed CAPE as a web-based portal. This design ensures that all parties, whether large or small, have equal access. In addition, the agency has held webinars for small businesses that may be unfamiliar with international trade processes.
WHAT COMES NEXT
The Federal Circuit will now consider the government’s mandamus petition and request for a stay pending appeal. If the CIT denies a stay first, the government has indicated it will seek the same relief from the Federal Circuit. In the meantime, CBP will continue processing refunds for unliquidated and nonfinal entries under Phase 1.
The agency is also preparing for the Phase 2 launch on June 29. Phase 3 technical capability remains on track for the end of July. However, the legal authority to apply it to non-litigant importers stays contested.
Companies tracking these proceedings can review CBP’s official IEEPA Duty Refunds page for the latest CAPE operational updates and CSMS messages.
FREQUENTLY ASKED QUESTIONS
What is CAPE Phase 3?
CAPE Phase 3 is the third stage of CBP’s Consolidated Administration and Processing of Entries tool. According to testimony at the June 9, 2026 CIT hearing, Phase 3 will be ready by the end of July 2026. Phase 3 will cover finally liquidated entries that paid IEEPA tariffs.
Will Phase 3 automatically refund finally liquidated entries?
Not necessarily. The technical capability is on track for late July. However, the DOJ argues that CBP cannot issue refunds on finally liquidated entries without an individual lawsuit at the CIT. This question is currently before the U.S. Court of Appeals for the Federal Circuit.
When does Phase 2 of CAPE launch?
Phase 2 will launch on June 29, 2026 and will cover reconciliation entries.
How much has CBP processed in IEEPA refunds so far?
CBP has accepted more than $89 billion in potential and certified refunds for processing under Phase 1. Of that total, around $22 billion has moved to the U.S. Department of the Treasury for disbursement.
What is the basis for the government’s appeal?
The DOJ argues that universal injunctions are unlawful under the Supreme Court’s 2025 ruling in Trump v. CASA, Inc. In addition, the government argues that the CIT’s order disregards party-presentation principles. According to the DOJ, the CIT also failed to apply equitable factors required by the Federal Circuit’s en banc V.O.S. Selections decision.
ORIGINAL SOURCES
- Defendants’ Response to Order to Show Cause and Motion for a Stay Pending Appeal, V.O.S. Selections, Inc. v. United States, No. 25-00066 (CIT June 4, 2026), available via CourtListener: https://storage.courtlistener.com/recap/gov.uscourts.cit.17080/gov.uscourts.cit.17080.98.0_2.pdf
- S. Customs and Border Protection, IEEPA Duty Refunds: https://www.cbp.gov/trade/programs-administration/trade-remedies/ieepa-duty-refunds
- CSMS # 68340863, CAPE for IEEPA Refunds, April 20, 2026 Deployment: https://content.govdelivery.com/accounts/USDHSCBP/bulletins/412cc7f
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