U.S. Customs and Border Protection (CBP) has published an interim final rule, Electronic Refunds (FR Doc. 2025‑24171), requiring that almost all refunds of duties, taxes, fees, and interest be paid electronically via ACH, with paper checks allowed only in limited waiver cases under Treasury regulations. The rule is effective February 6, 2026, and CBP will accept public comments through March 3, 2026. CBP held an industry call on January 14, 2026; here is a recap of the interim final rule and CBP’s operational guidance.
What’s changing
- CBP will issue electronic refunds under 19 U.S.C. 1505(b) (excess duty and fee deposits, with interest) and 19 U.S.C. 1520 (amounts erroneously or excessively collected, including certain mitigation refunds).
- Refunds will be deposited via ACH into a designated U.S. bank account—typically the importer’s or a properly designated agent’s—generally within 1–2 business days after CBP issues the refund, instead of by mailed Treasury check.
- Paper checks will no longer be used unless the payee qualifies for a waiver under 31 CFR 208.4, which is expected to apply only in narrow circumstances.
- If CBP certifies a refund but cannot deliver it because ACH banking information is missing or incomplete, the payment will be rejected, and no additional interest will accrue under 19 U.S.C. 1505(d) for the period during which the refund could not be delivered.
CBP notes that this shift is part of a broader federal initiative to digitize disbursements, reduce fraud, and lower administrative costs associated with paper checks.
Who is covered
The interim final rule applies broadly to CBP‑issued monetary refunds, including:
- Duty and fee refunds under 19 U.S.C. 1505(b)
- Refunds of amounts erroneously or excessively collected under 19 U.S.C. 1520
- Protest‑related refunds
- Drawback and certain mitigation‑related refunds
- Refunds paid to designated third parties (e.g., customs brokers, attorneys) when authorized on CBP Form 4811
Where a third party is properly designated, refunds will be paid electronically to that party’s enrolled ACH account.
Why IEEPA litigation makes ACH setup urgent
Many importers have filed preemptive cases at the Court of International Trade challenging IEEPA‑based “reciprocal” and “Fentanyl” tariffs, positioning themselves to seek refunds if the Supreme Court agrees that these duties were unlawful. With potentially tens of billions of dollars in IEEPA duties at stake, any court‑ordered refunds will almost certainly flow through CBP’s new electronic refund framework, not paper checks.
Importers that have already filed at the CIT should ensure their ACE ACH Refund Authorization is fully in place now, so that if and when refunds are ordered, payments can be issued promptly to the correct accounts—without rejections, lost interest, or avoidable delays at precisely the moment when timing and cash‑flow matter most.
What you need to do before February 6, 2026
1. Confirm ACH Refund enrollment in ACE
CBP has deployed an ACH Refund Authorization function in the ACE Secure Data Portal to support this transition.
- Log into your ACE Secure Data Portal.
- Open the ACH Refund Authorization tab.
- Provide or verify your U.S. bank account information for refunds.
- If you already receive ACH refunds in ACE and your banking data is current, generally no additional setup is required.
2. If you use a Designated Agent (CBP Form 4811)
If your refunds are routed to a customs broker or other representative:
- Confirm the agent is correctly listed and authorized in ACE (Form 4811 / Notify Parties).
- Ensure the agent has completed ACH Refund enrollment in its own ACE account, with a U.S. bank account designated for receipt of refunds.
- If the designated agent is not enrolled for ACH Refund, CBP may default the refund to your enrolled ACH account, or reject the refund if no valid ACH details are available.
3. Non‑resident (foreign) importers
Non‑resident importers remain fully subject to the electronic refund requirement and must:
- Open a U.S. bank account and enroll directly for ACH Refund in ACE, or
- Designate a U.S.‑banked agent (for example, a customs broker) on CBP Form 4811 and ensure that the agent is ACH‑enrolled and linked correctly in the Notify Parties tab.
4. ACH Refund is separate from ACH Duty Payment
- Enrollment in ACH Duty Payment does not automatically enroll the importer in ACH Refund.
- A separate ACH Refund Authorization is required in ACE, even if you already pay duties electronically via ACH.
Benefits to importers
The electronic refunds rule is intended to improve speed, security, and transparency for importers and other refund recipients.
- Faster refunds: ACH deposits typically settle within 1–2 business days, compared with the longer timeframes for mailed checks.
- Greater security: ACH significantly reduces the risk of lost, stolen, or misdirected checks.
- Operational efficiency: Electronic processing reduces manual handling and offers better visibility into refund status via ACE.
Waivers, comments, and CBP contact
- Waivers from the electronic payment requirement are available only in limited situations under 31 CFR 208.4 and must be requested and granted on a case‑by‑case basis.
- For waiver requests or unusual refund scenarios, CBP directs stakeholders to contact the Revenue Division at [email protected].
- Interested parties may submit public comments on the interim final rule through the Federal eRulemaking portal (Docket USCBP‑2025‑1076) by March 3, 2026.
How OFW Law can help
OFW Law assists importers, brokers, and other trade stakeholders in understanding and implementing CBP’s electronic refund requirements.
Services can include:
- Evaluating your ACE account structure, user access, and governance around refund receipt.
- Guiding your team through ACH Refund Authorization setup and internal controls for banking data.
- Reviewing and optimizing Form 4811 / Notify Party designations to align refund flows with your commercial arrangements.
- Identifying legacy or pending refunds that could be affected by the transition from paper checks to ACH and advising on waiver or comment strategies where appropriate.
To minimize refund disruption and potential loss of interest after February 6, 2026, importers should complete ACH Refund enrollment as early as possible. For assistance with compliance planning, implementation, or submissions related to the interim final rule, please contact OFW Law.
