The IEEPA Tariff Refund Question No One Is Asking

Informal Entries, Section 321, and a Procedural Gap in the Case Law

Recent litigation over tariffs imposed under the International Emergency Economic Powers Act (IEEPA) has focused on a recurring procedural question: if the tariffs are ultimately held unlawful, can importers recover the duties they paid? 

In addressing that question, courts have declined to halt liquidation of entries pending Supreme Court review, reasoning that the availability of post-payment remedies defeats the need for emergency relief.

That conclusion, however, rests on an unstated assumption about how customs refunds work. Specifically, it assumes a formal-entry model of liquidation and protest that does not necessarily apply to informal entries, and particularly not to Section 321 (de minimis) shipments. That assumption has received little attention to date, but it may prove consequential.

The Judicial Posture to Date

In recent cases challenging IEEPA-based tariffs, importers asked the Court of International Trade to postpone liquidation while the Supreme Court considers whether IEEPA authorizes tariffs at all. The court declined to do so. The reasoning was procedural rather than substantive. The court did not rule on the legality of the tariffs. Instead, it concluded that the requested injunction failed on the irreparable harm prong because any duties later determined to be unlawful could, in theory, be refunded.

That approach is consistent with long-standing equitable principles. Courts evaluating requests for injunctive relief have held that monetary injury is not irreparable where a legal mechanism exists to recover the money later. The Supreme Court has framed this principle clearly, explaining that “mere injuries, however substantial, in terms of money, time and energy necessarily expended in the absence of a stay, are not enough” to establish irreparable harm where recovery remains possible. Sampson v. Murray, 415 U.S. 61, 90 (1974).

The Court of International Trade has applied the same principle in trade cases, including where duties are challenged but statutory refund mechanisms remain available. The recent IEEPA cases follow that pattern.

What the courts have not done is describe how refunds would occur, or for which categories of entries those remedies would actually be available.

The Procedural Model Being Assumed

The refund logic invoked by the courts presumes a familiar sequence under the customs laws:

1. A formal entry is filed.
2. U.S. Customs and Border Protection liquidates the entry under 19 CFR § 159
3. The importer files a protest within 180 days of liquidation under 19 CFR § 159.9
4. If the protest succeeds, or if the underlying legal basis for the duties collapses, the entry may be reliquidated and duties refunded, with interest under 19 CFR § 159.38

This framework is well established and functions as intended for importers who file formal entries and actively manage post-entry compliance. It is also the framework that underlies most tariff litigation, because those cases are typically brought by large importers operating squarely within this system.

The difficulty is that this framework is not universal.

Informal Entries Operate Differently

Informal entries exist to simplify customs processing for lower-value or lower-risk shipments. They involve reduced documentation, expedited release, and streamlined accounting procedures. In many cases, they do not follow the same liquidation sequence contemplated by § 159, and the availability of protests may be limited or unclear.

Refund rights under U.S. customs law are procedural. They depend on specific administrative acts such as liquidation, denial of protest, or reliquidation. Where those acts do not occur in the conventional way, the statutory machinery that courts assume will later provide relief may not engage as expected.

This distinction becomes particularly acute when Section 321 is considered.

Section 321 and the Limits of the Refund Assumption

Section 321 of the Tariff Act, codified at 19 U.S.C. § 1321, permits qualifying shipments to enter the United States free of duty and tax, subject to specified conditions.

De minimis shipments are designed for speed and volume. When duties are imposed on such shipments, whether due to changes in eligibility, aggregation rules, or broader policy shifts, those duties are often assessed and collected immediately. There may be no conventional liquidation event, no clear protest deadline, and no established pathway for reliquidation.

Yet when courts state that duties can be “refunded later,” they are almost certainly contemplating formal entries. The plaintiffs before them file formal entries. The administrative record reflects formal-entry procedures. The refund logic assumes liquidation and protest.

Whether that logic extends to Section 321 shipments is largely untested.

Why the Issue Has Not Surfaced

The absence of judicial analysis on this point is not surprising. The challenges to IEEPA-based tariffs have been brought by importers with the scale and compliance infrastructure to litigate. Those importers do not typically rely on informal or de minimis entry procedures.

As a result, courts have had no occasion to examine whether the assumed availability of refunds exists for other categories of entries. The refund assumption has functioned as a background premise rather than a contested issue.

Practical Implications

None of this establishes that informal or Section 321 importers are categorically barred from relief if IEEPA-based tariffs are invalidated. It does suggest, however, that the procedural certainty courts rely upon for formal entries does not necessarily extend to all forms of importation.

For formal-entry importers, the message remains familiar: track liquidation, monitor extensions, and preserve protest rights. For importers relying heavily on informal or de minimis entries, the risk profile is different. The administrative hooks that make refunds possible in theory may not exist in practice.

The Unanswered Question After IEEPA

As attention focuses on the Supreme Court’s forthcoming decision on the scope of IEEPA, it is worth remembering that legality is only part of the story. The more difficult questions may arise afterward, when theory meets procedure. Whether duties can be recovered will depend not only on what the Court decides, but on how the underlying entries were made. That distinction has so far gone largely unexamined, and it may matter more than many expect.

Contact us today if your company needs help assessing how entry type, liquidation practices, or de minimis procedures could affect refund exposure after the Supreme Court’s IEEPA decision. O’Meara & Associates provides technical analysis and planning support to help companies understand their risk profile and prepare internally. We do not file protests or act as legal counsel, but we work alongside brokers and attorneys to ensure decisions are grounded in a clear understanding of customs procedure.