What Every Multinational Should Know About … Preserving the Right to IEEPA Tariff Refunds (Updated with FAQs) - Foley & Lardner LLP

Importers of goods from China subject to certain Section 301 tariffs need to be aware of an ongoing legal challenge that could potentially lead to significant refunds. The U.S. Court of International Trade (CIT) is currently hearing a case, A/M 3M Co. v. United States, which challenges the legality of tariffs imposed under Lists 3 and 4A. While the outcome of this litigation is uncertain and could take time, the window for importers to preserve their right to any potential refunds is strict and time-sensitive.

The core of the legal challenge revolves around whether the U.S. Trade Representative (USTR) followed proper administrative procedures when imposing the tariffs under the International Emergency Economic Powers Act (IEEPA). If the CIT rules that these tariffs were unlawfully imposed, importers who paid them could be eligible for refunds, but only if they have filed timely protests. This makes understanding and adhering to the protest deadlines absolutely critical for any multinational company that imported goods subject to these specific duties.

The tariffs in question are those applied to goods under Section 301 Lists 3 and 4A. Specifically:

• List 3 Tariffs: These were initially imposed on September 24, 2018, at a rate of 10%. This rate was subsequently increased to 25% on May 10, 2019.
• List 4A Tariffs: These tariffs were imposed on September 1, 2019, at a rate of 15%. The rate was later reduced to 7.5% on February 14, 2020.

For any entry subject to these tariffs, the statutory deadline for filing a protest with U.S. Customs and Border Protection (CBP) is 180 days from the date of liquidation of that entry. Missing this 180-day window means forfeiting the right to a refund, even if the CIT ultimately rules in favor of the plaintiffs.

Given the potential for substantial refunds, importers should take immediate action to review their import records and ensure compliance with protest requirements. Here’s what importers should do:

• Identify Affected Entries: Review all import entries from China that were subject to Section 301 List 3 or List 4A tariffs.
• Track Liquidation Dates: For each identified entry, determine its liquidation date. This is crucial for calculating the 180-day protest deadline. The 180-day clock begins ticking only after an entry has liquidated.
• File Timely Protests: For any entry that has liquidated within the last 180 days, or for any future entry that will liquidate, ensure a protest is filed within the statutory timeframe. It is advisable to file protests for all entries subject to these tariffs to preserve refund rights.
• Consult Experts: Work closely with your customs broker or trade counsel to manage the protest process, especially given the complexities of tracking liquidation dates and ensuring proper protest filings.

While the legal challenge progresses, importers must proactively safeguard their interests by adhering to these critical administrative deadlines. Failure to do so could result in the permanent loss of potential tariff refunds, regardless of the court's final decision.