In a previous alert on April 20, 2026, titled U.S. Government Now Accepting IEEPA Tariff Refund Claims: 5 Things to Know, we summarized the launch of U.S. Customs and Border Protection’s (CBP) Consolidated Administration and Processing of Entries (CAPE) portal, which is the centralized refund mechanism for tariffs invalidated in Learning Resources, Inc. v. Trump. Only a month into the process, several important developments have emerged.  According to a declaration filed in the U.S. Court of International Trade (CIT) on May 26, 2026, CAPE has cleared $20.6 billion in refunds to importers, with more than 15.8 million entries accepted in Phase 1 accounting for roughly $85 billion in potential and certified refunds.

Four updates since the refund process opened:

  1. IEEPA Refunds Are Now Flowing—But the Window Remains Narrow. CBP began issuing the first refunds the week of May 11, 2026, and by the May 26 declaration had finalized $20.6 billion in repayments sent to the U.S. Department of the Treasury, with approximately $85 billion potential and certified refunds in the CAPE system. Over the prior two weeks, an additional 177,396 entries reached final liquidation or were reliquidated without IEEPA duties. Phase 1, however, remains limited to certain unliquidated entries and certain entries within 80 days of liquidation. Importers with entries fully liquidated outside that window remain in queue for Phase 2.
  2. The Lead Case Changed and Disputes Remain. On April 8, 2026, Atmus Filtration was dismissed, and Euro-Notions Florida, Inc. v. United States became the lead case before Judge Richard K. Eaton.  A Government appeal of the case and reassertion that refunds should only be applied to those that have filed a claim in the CIT is still possible in the coming weeks.  On May 27, 2026, Judge Eaton ordered that CBP Commissioner appear before the court to answer questions about CBP’s compliance with the court’s orders, signaling that the court and Administration continue to be at odds with regard to the speed and scope of paying billions of dollars in refunds. In a separate order that same day, the Court noted it was “particularly concerned about the millions of informal entries where liquidation was simultaneous, or nearly simultaneous, with the time of entry, and for which the liquidation is now final” which, to date, “the Government has not presented a[ny] proposal to address.”
  3. Government Contractors Should Confirm Disposition of Refunds Before They Arrive. As we noted in the April 20 alert, contractors that treated IEEPA tariffs as allowable costs under a contract and passed those costs through to the federal government should not assume CAPE refunds may simply be retained in their entirety and must carefully analyze how the original tariff costs were handled. FAR 31.201-5, for example, provides that in certain cases a cost rebate should be credited to the government.  Similarly, the standard Allowable Cost and Payment clause, FAR 52.216-7(h)(2), contains a similar requirement.  The mechanics of how the refund is credited depend on contract type and cost treatment. Contractors should inventory contracts under which IEEPA tariffs were billed now, identify the relevant cost-credit clauses, and plan refund disposition before CAPE proceeds disburse. The failure to do so may risk potential exposure under the False Claims Act (FCA). More broadly, robust FCA enforcement in the tariff space has continued as evidenced by recent FCA settlements arising from alleged tariff evasion including the April 24th settlement by Echelon Fitness Multimedia LLC for $2.1 million and the May 12th settlement by Perfectus Aluminum, Inc. and its affiliated companies for $549.5 million.
  4. Refunds Are Not the End of the Story. Tariff exposure has not disappeared. Effective February 24, 2026, the United States imposed a global import surcharge under Section 122 of the Trade Act of 1974, a temporary, 150-day measure tied to balance-of-payments concerns. Separately, there is an emerging set of potential consumer class actions and actual suits being brought against companies like Amazon premised on the theory that IEEPA refunds should flow downstream to purchasers and end consumers. Phase 2 of CAPE, expected later in 2026, will determine how the more complex categories of entries are administered.

The procedural posture in Euro-Notions Florida underscores that the merits dispute is largely settled but the scope, speed, and mechanisms of refunds are not yet final. For government contractors, business concerns related to government relations, compliance with the FAR, and commercial customer expectations must be weighed judiciously before acting. Contractors that paid IEEPA tariffs, whether as importers of record, supply-chain participants, or government contractors, should engage counsel immediately to confirm CAPE eligibility, identify any FAR-based credit or disclosure obligations, and preserve their position in preparation for further developments and refunds.

Fluet’s International Trade and Government Contracts teams are well-equipped to advise clients on the government contracts specific complications and on the full refund lifecycle.