CAPE One Month In: Refunds Are Landing, the Validation Rate Is Lower Than You Think, and the June 7 Deadline Is the One to Watch
The first ACH refund payments from the CAPE process began landing in importer bank accounts a week ago. That is the news that matters most after two months of waiting. CBP committed in court to issuing the first refunds around May 11. They did. The system is working. For importers who took the preparation steps seriously, this is the moment the IEEPA refund process stopped being theoretical and started being money in the bank.
It is also a moment when the cracks in the system are visible in a way they were not on launch day. The validation rejection rate is higher than most importers expected. A secondary market in refund rights has emerged faster than most analysts predicted. And the legal framework underneath all of this faces a real test in three weeks. This post covers what is working, what is not, and what to do about each of them this week.
What is working: the numbers
As of CBP's April 28 declaration to the Court of International Trade, importers and brokers had submitted approximately 75,300 CAPE declarations covering more than 11.2 million individual entries. Of those, roughly 1.74 million entries had cleared all validations and were moving through liquidation and refund processing. Volume on the input side is real.
On the output side, CSMS #68536553 confirmed ACH refund payments could begin issuing as early as May 12, and the first payments started arriving within that window. Refunds are being consolidated by importer of record and by liquidation date, then issued as single payments through ACH. The structure is working roughly as CBP described it back in March. Phase 1 ultimately covers approximately 82% of IEEPA entries when fully processed, which is a meaningful share of the total $166 billion in duties that need to be returned.
For importers who got their ACE accounts set up correctly, completed ACH refund enrollment (which, again, is a separate module from duty payment enrollment), and submitted clean declarations early, the experience has been close to what the agency promised. That is not how it always works with new federal systems. Worth recognizing.
What is not working: 63% validation rate and what it tells you
The number that has surprised most people watching the rollout closely is the first-validation pass rate. As of late April, only 63% of submissions had cleared the first validation step. Roughly one in three CAPE declarations is being returned, and importers have to fix the underlying issue and resubmit before anything moves forward. CBP is not selectively rejecting individual entries within a declaration. A single error returns the whole file. That is the design, and it is unforgiving when applied at this volume.
Three patterns are causing most of the rejections. The first is outdated ACE credentials. ACE accounts that were set up years ago are sometimes still linked to former employees, departed customs brokers, or accounting staff who are no longer with the company. CBP rejects submissions where the credentials and the entity do not match. The fix is a CBP Form 5106 update before filing, which a customs broker can run on the importer's behalf.
The second is the wrong ACH module. The ACE Portal has separate enrollment paths for paying duties and for receiving refunds. Importers who set up ACH years ago for duty payments often assume they are also set up to receive refunds. They are not. CBP will accept the declaration but then hold the payment until the refund-specific banking information is added. This is the single most common reason refunds are getting delayed after the declaration passes validation.
The third is entry number formatting. Each entry number must be 11 alphanumeric characters with no duplicates. For broker and filer accounts, the first three characters must match the filer code on file. Simple, but easy to get wrong when you are pulling thousands of entries into a CSV file and pasting from multiple sources. Run a clean-up pass before uploading.
The secondary market for refund rights
Here is something that was not on most importers' radar a month ago: a secondary market for IEEPA refund claims is now actively trading. Specialty financing firms and trade-claim investors are offering to purchase refund rights from importers at a discount to face value, paying cash now in exchange for the right to collect the refund when CBP eventually pays. The discount varies by transaction, but in some cases is north of 30% of the anticipated refund.
The appeal is straightforward. CBP is quoting 60 to 90 days from declaration acceptance to refund issuance. For some importers, that is a meaningful liquidity gap. A discounted upfront payment looks attractive against waiting most of a quarter for funds. For others, particularly companies with significant working capital strain, the discount is the cost of getting access to cash on a timeline they can actually use.
The complication is legal, and it is real. The federal Anti-Assignment Act restricts outright assignment of claims against the United States before certain statutory prerequisites are met — generally, the claim must be allowed, the amount decided, and a warrant for payment issued. For most CAPE claims, those conditions are not met at the time of an early sale. A purported assignment made before those conditions are satisfied could be void or voidable. The workaround being used is structuring the transaction as a financing arrangement rather than an outright sale, with the importer retaining the legal claim and assigning the proceeds to the purchaser. This is not a transaction to enter without legal counsel reviewing the specific structure.
If your company is considering a secondary market sale, the right preparation is to model the refund timeline realistically against your cash flow needs, get clear on the structure of the proposed transaction, and have counsel review the documents before signing. The market is real and legitimate operators are participating. There are also opportunistic buyers. Tell the difference before money changes hands.
The June 7 deadline that changes the math
The most consequential date on the IEEPA refund calendar is not on CBP's website. It is the government's deadline to appeal the CIT's nationwide refund order to the U.S. Court of Appeals for the Federal Circuit. That deadline runs through early June 2026 — practically, June 7.
Here is why this matters in practical terms. If the government appeals before June 7 and seeks an emergency stay pending appeal, the refund process could be suspended overnight. The Federal Circuit demonstrated last week that it is willing to issue stays quickly in tariff cases. On May 12, just five days after the CIT struck down the Section 122 tariffs, the Federal Circuit issued a temporary stay of that ruling pending appeal. The same path is available for the IEEPA refund order, and the administration has signaled it intends to challenge the CIT's authority to mandate refunds nationwide.
The conservative position for importers with eligible entries in the Phase 1 window is straightforward: file your CAPE declaration before June 7 rather than after. Declarations already filed and accepted before any stay would be in a stronger position than declarations filed after the stay. Whether refunds already in the payment pipeline could be clawed back is a more complicated legal question that depends on the specific language of any stay order, but the cleaner outcome is to have the money in your account before the appeal is filed.
This does not mean rushing a declaration that is not ready. A rejected declaration filed in panic is worse than no declaration. But for importers who have been waiting to compile data perfectly, the calendar is now telling you to file with what you have and run a supplemental declaration later for entries you missed.
Other tools that have become essential
Two ACE reporting tools are now genuinely useful for tracking refund status. The REV-603 Trade Refund report shows successful refunds. The REV-613 ACH Rejected Refunds report shows payments that bounced, typically due to stale banking information when CBP attempted to pay. CBP has also deployed an ES-022 report that links CAPE declaration numbers, entry summaries, refund claim identifiers, and refund payment information in one view. If you have filed declarations and are not running these reports regularly, you are leaving operational visibility on the table.
Where things stand for entries excluded from Phase 1
Phase 1 still does not cover six categories of entries: those flagged for reconciliation, those designated on a drawback claim, entries covered by open protests, entries not filed in ACE or without a liquidation status in ACE, certain entries subject to AD/CVD with pending liquidation, and entries that are finally liquidated. CBP has committed to addressing all of these in subsequent phases. The CIT has finally ruled that liquidated entries are part of the overall mandate. There is still no public timeline for when Phase 2 functionality goes live.
For importers with significant exposure in those excluded categories, maintain protests where they exist and consider parallel CIT action where the volume justifies legal cost. The court is the entity actually setting the deadlines here, not CBP.
How ShipTech can help
Our customs brokerage team is filing CAPE declarations for clients, monitoring refund status via ACE reports, and helping importers resolve validation rejections. We can also help confirm that your ACE account structure and ACH refund enrollment are set up correctly before you file. If you want to move ahead of June 7 rather than react to it, reach out to your ShipTech account manager directly.