CBP filed its status report yesterday, March 31, in Atmus Filtration to the CIT. 

It’s an important one!

Here are some key points regarding what Consolidated Administration and Processing of Entries (CAPE) “Phase 1” will and won’t be doing:

  • CAPE Phase 1 will be limited to entries that “are either unliquidated or for which the 90-day voluntary reliquidation period under 19 U.S.C. § 1501 has not expired,” despite Judge Eaton’s latest amended order extending relief to finally liquidated entries. 
  • However, CBP says that it “intends to expand CAPE to process finally liquidated entries in a subsequent phase of development.”
  • CAPE Phase 1 will accept entries where the liquidation status is “Suspended,” “Extended,” or “Under Review,” as well as warehouse and warehouse withdrawal entries, but in these instances, refunds will be provided in the normal course upon liquidation, rather than immediately. This includes entries subject to AD/CVD.
  • The following categories of entries will not be accepted for CAPE Phase 1:
    • Entries flagged for reconciliation
    • Entries designated on a drawback claim
    • Entries covered by an open protest
    • Entries not filed in ACE/entries without a liquidation status in ACE
    • Entries subject to AD/CVD for which Commerce has issued liquidation instructions that are pending liquidation under 19 U.S.C. § 1504(d).
  • In terms of timeline of processing: “CBP will take up to 45 days from its acceptance of a CAPE Declaration to review and liquidate the validated entry summaries identified on the CAPE Declaration, unless there is a compliance concern necessitating further review.”
  • For subsequent phases of CAPE, CBP says it expects to develop the following functionalities, among others:
    • “Enhanced tools and validations to ensure compliance”
    • “Tools to further streamline revenue enforcement in situations in which there is an outstanding bill for non-IEEPA duties associated with an entry included on a CAPE Declaration”
    • “The capability to process entries for which liquidation is final”
    • “The capability to process non-[ABI] entries where no entry summary lines exist.”

A few key takeaways:

  • First, our recommendation to continue protesting and consider filing a refund suit with the CIT remains. Why?  Because nothing in the status update addresses the protest-ability issue or whether suit is required. And although entries with an open protest won’t be covered in Phase 1, neither will finally liquidated entries. It is unclear whether importers can withdraw their protests and expect to be able to take part in CAPE Phase 1.
  • Second, this update suggests that importers should wait until after the 90-day voluntary reliquidation window to protest, just in case CAPE comes out in time for CBP to process these entries. CBP claims that if there’s at least 10 days left on the 90-day voluntary reliquidation clock, it can process them in time. However, waiting to file can mean missing timely protests altogether.
  • And third, CBP’s status update makes clear that it will be spot-checking entries for compliance issues and seeking offset on refunds. Again, this is another reason for clients to make certain that their entries are in order and that they have supporting documentation for their classification, value, COO, and other declarations.

Shapiro will be actively monitoring the situation and providing updates as they become available.