The CAPE Risks Nobody Is Talking About — False Claims, Offsets, and Today's Court Ruling

Today's Court Hearing — What's on the Table

The Court of International Trade is holding a closed settlement conference with Judge Eaton today, April 28, 2026. CBP is required to file a Phase 1 progress report on CAPE performance the same day.

The hearing is expected to provide clarity on the Phase 2 timeline and expanded eligibility for older liquidated entries that fall outside the current Phase 1 80-day protest window. The lead case driving the next round of court orders is Euro-Notions Florida, Inc. v. U.S. Customs and Border Protection — a case that has positioned itself as the procedural vehicle for resolving Phase 2 questions.

This article will be updated as today's ruling becomes public.

The False Claims Act Risk — The Whale-Sized Problem

This is the angle most importers and their advisors are not discussing loudly enough.

Snell & Wilmer, one of the nation's top trade law firms, has explicitly warned: "If an importer of record did not include the correct valuation of the product, or engaged with the foreign manufacturer for pricing manipulation schemes or transshipment via a domestic subsidiary of the manufacturer at a lower valuation, filing a declaration knowing of such an issue could lead to separate criminal and civil liabilities."

In plain English: if your original entries had any valuation issues, HTS misclassifications, country-of-origin problems, or tariff-stacking errors — and you file a CAPE Declaration anyway — you are certifying those entries as accurate. CBP is treating CAPE as a front-end intake for a full review and validation process, not a passive refund system.

CAPE is not file-and-forget. CBP has confirmed claims may be subject to review, documentation requests, and post-refund audit activity. For large importers with hundreds of entries across complex supply chains, the risk of an overlooked error is real. The larger the refund claim, the more scrutiny it will receive.

For a company claiming $2 million in IEEPA refunds, an undisclosed valuation issue found during a CBP audit is not just an embarrassment — it is potential False Claims Act exposure that could exceed the refund itself.

The Offset Risk — Automatic Deduction

CBP has officially confirmed that IEEPA refunds processed through CAPE are "available to offset amounts owed with respect to other duties."

Translation: if you owe CBP money on any other entries — unpaid duties, penalties, liquidated damages, bond claims — CBP will deduct that from your IEEPA refund before you see a dollar.

For large importers with active compliance issues, pending audits, or liquidated damages claims, this offset is a significant consideration before filing. You may trigger a net settlement you weren't expecting, and the time to learn that is before submission, not after.

The AD/CVD Complication — 166,000 Entries in the Slow Queue

Approximately 166,000 entries subject to antidumping and countervailing duty (AD/CVD) orders — representing roughly $2.9 billion in IEEPA duties — require manual CBP processing. CBP has acknowledged this will dramatically increase the workload of CBP officials and will likely result in significant delays for this category.

If you imported products subject to AD/CVD orders — Chinese steel, Vietnamese shrimp, furniture, tires, solar panels, and many others — your IEEPA refund is in the slower manual queue regardless of how clean your CAPE filing is.

For importers with mixed AD/CVD and non-AD/CVD entries, splitting your CAPE Declarations to keep the clean entries on the fast track is a real strategic decision. Mixing them puts the whole filing in the slow lane.

What the Administration's Aggressive Posture Means

The Administration has signaled it will aggressively contest refunds at every opportunity. That includes:

- A potential Federal Circuit appeal of the refund order. The government has until approximately June 7 to appeal. - Using offset authority to reduce net refunds wherever possible. - Applying maximum scrutiny to CAPE submissions for compliance issues. - Potentially challenging the scope of refunds for entries with any post-entry modifications.

For large importers, this is not a situation where you submit a CSV and wait for a check. This is an adversarial environment where CBP is simultaneously processing your refund and looking for reasons to reduce, delay, or offset it.

What Large Importers Should Do Before Filing

Seven actions, in order:

1. Conduct a full pre-submission audit of every entry you plan to include.

2. Verify HTS classification accuracy on all IEEPA-duty entries — even minor variances trigger manual review.

3. Check entered value against actual transaction value. Any pricing arrangements with related parties should be reviewed.

4. Confirm country-of-origin documentation for all entries. Transshipment flags will surface during CBP review.

5. Review any open compliance matters, liquidated damages claims, or pending CBP debts before submitting. The offset will happen automatically.

6. For entries with AD/CVD exposure: consult a trade attorney before including them in Phase 1.

7. Document everything. CBP may request supporting documentation post-submission, sometimes months later.

The Math on Getting It Wrong

A company with $5 million in IEEPA refunds that files a CAPE Declaration containing 3% bad entries could face all of the following at once:

- Rejection of those bad entries — losing roughly $150,000 in refund. - Manual review routing for the clean entries — 60-90 day timeline extends materially. - CBP compliance review of the entire filing — broader exposure beyond IEEPA. - Potential False Claims Act exposure if any of the errors were known. - Offset of (for example) $200,000 in unrelated CBP debts, reducing the net refund to $4.65 million.

Net result: months of delay, a six-figure refund haircut, and legal exposure — all from rushing a filing that should have been audited first. The audit typically costs a fraction of one percent of the refund. The math is not close.

The Bottom Line for Large Importers

Speed matters. Accuracy matters more. The importers getting paid first are not the ones who filed fastest. They are the ones who filed clean.

If your refund is $250,000 or more, this is not a DIY filing. It is a tax and compliance event that requires licensed customs professionals with ACE access, entry-level audit capability, and experience with CBP review processes.

Our network handles IEEPA refund filings for importers with $250,000+ in estimated refunds. We audit your entries before submission, coordinate with your customs broker, and manage the filing through your ACE account. Free consultation for qualified importers.