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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 11 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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On January 2, 2026, U.S. Customs and Border Protection (&ldquo;CBP&rdquo;), an agency within the U.S. Department of Homeland Security, published an <a href="https://www.federalregister.gov/documents/2026/01/02/2025-24171/electronic-refunds">interim final rule</a> announcing it will move to an all-electronic refund system beginning February 6, 2026.&nbsp; As a result, the agency will no longer issue paper checks for refunds&mdash;including tariff refunds&mdash;absent a waiver approved by CBP.
The interim final rule (&ldquo;IFR&rdquo;) applies to refunds CBP must issue under 19 U.S.C. &sect; 1505(b), which governs the refunding of excess deposits of duties and fees&mdash;with interest&mdash;within 30 days of an entry&rsquo;s liquidation or reliquidation.&nbsp; The IFR also covers other refunds authorized under 19 U.S.C. &sect; 1520, which addresses amounts erroneously or excessively collected by CBP, including amounts refunded pursuant to mitigation agreements.
CBP has long offered electronic refunds through its Automated Clearing House (&ldquo;ACH&rdquo;) Refund program, but participation was previously voluntary.&nbsp; Now, however, importers not currently enrolled in the ACH Refund program must submit an application through the Automated Commercial Environment Secure Data Portal (&ldquo;ACE Portal&rdquo;) and designate a U.S. bank account to receive such payments; importers already enrolled will continue receiving electronic refunds without interruption.&nbsp; The IFR emphasizes that importers are responsible for ensuring the accuracy of any third-party payment designation and for notifying CBP if banking or account information changes.
According to CBP, the IFR aligns with <a href="https://www.federalregister.gov/documents/2025/03/28/2025-05522/modernizing-payments-to-and-from-americas-bank-account">Executive Order 14247</a> (&ldquo;Modernizing Payments To and From America&rsquo;s Bank Account&rdquo;) issued by President Donald Trump on March 25, 2025.&nbsp; That executive order directs federal agencies to transition from paper checks to electronic payments for all federal disbursements and receipts to the extent permitted by law.
In the IFR, CBP highlighted the speed, security, and cost savings associated with electronic refunds.&nbsp; For example, electronic payments are typically deposited into a recipient&rsquo;s designated bank account within one to two business days, compared to three or more days for refunds issued by mailed U.S. Treasury checks.
The timing of the IFR is notable as importers continue to monitor litigation before the U.S. Supreme Court challenging President Trump&rsquo;s authority to impose tariffs under the International Emergency Economic Powers Act (&ldquo;IEEPA&rdquo;).&nbsp; Since returning to office, President Trump has invoked IEEPA multiple times to impose tariffs, prompting ongoing questions among importers about how to preserve refund rights on entries subject to IEEPA duties if the U.S. Supreme Court were to conclude that the statute does not authorize such measures.&nbsp; The IFR, however, does not address the pending case, which may be decided <a href="https://www.supremecourt.gov/oral_arguments/2025TermCourtCalendar.pdf">as early as January 9, 2026</a>, when the justices return from their four-week holiday recess.&nbsp; (For more background on the case at the U.S. Supreme Court, see <a href="https://www.thompsonhinesmartrade.com/2025/11/trumps-emergency-tariffs-face-scrutiny-and-skepticism-at-the-supreme-court-2/">Update of November 7, 2025</a>.)
Although the IFR takes effect on February 6, 2026, CBP is accepting public comments on it through March 3, 2026.&nbsp; Comments should be submitted via the federal rulemaking portal (<a href="http://www.regulations.gov">www.regulations.gov</a>) under docket number USCBP-2025-1076.

CBP to Issue All Refunds Electronically Starting February 6, 2026

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