Why CAPE Phase 3 Must Block Non-IEEPA Duty Adjustments in Reliquidation
CBP delayed the court-order phase while it builds controls to account for improperly reported IEEPA duties and prevent non-IEEPA duty adjustments. Covered plaintiff importers should preserve the original entry and prepare an IEEPA-only delta schedule while awaiting operative filing instructions.
Primary lensEntry posture review
Sub-topicCAPE processing
Evidence base10 records used
Use caseRefund posture
CBP says CAPE Phase 3 is delayed because the order-backed population needs new controls. The system must account for IEEPA duties reported improperly on the original entry and prevent any duty adjustment outside the IEEPA refund during court-ordered reliquidation.
ECF No. 38 describes Phase 3 as covering finally liquidated entries filed by plaintiffs for whom the Court of International Trade has ordered reliquidation. The July 15 form order separately reaches covered plaintiff entries more than 80 days after liquidation, including the day-81-to-90 interval before Section 1501's 90-day period closes. The public record reviewed here does not say whether CBP will assign those day-81-to-90 entries to Phase 3 before they become final. The pause applies only to Phase 3. Phases 1 and 2 remain operational.
The practical consequence is immediate even though Phase 3 has no announced launch date. A plaintiff importer should not treat its Phase 3 candidate entries as a general correction queue. The working file should isolate the IEEPA delta and preserve the original entry version. Each non-IEEPA issue should be identified separately so counsel can determine whether any distinct route and deadline remain available.
The delay is tied to two validation functions
The August 25 declaration from Brandon Lord, executive director of CBP's Trade Programs Directorate, provides a precise description of the Phase 3 deployment problem. Paragraph 8 uses the phrase "finally liquidated entries" and identifies two functions the new validations are intended to perform.
In Traverse's terms, one aim is a negative control: prevent any duty adjustment outside the IEEPA refund. The other concerns original reporting: account for IEEPA duties reported improperly on the original entry.
CBP has not published a technical specification. Paragraph 8 nevertheless indicates that removing reported IEEPA lines alone may be insufficient when the original entry itself contains improper reporting. Traverse does not infer how CBP will detect or resolve those cases.
Finally liquidated entries require a separate rule set
Phase 1 guidance describes a broad recalculation inside a still-open legal window. After an entry passes CAPE validation, ACE removes the applicable IEEPA Chapter 99 numbers, creates a new minor version of the entry summary, and recalculates duties, taxes, and fees as if the IEEPA duties had never been owed.
That process came with a sequencing rule. A post summary correction could not initiate an IEEPA refund. If the importer needed a PSC for another issue, CBP told the filer to submit the PSC before the CAPE declaration. The guidance requires filing first; it does not say the PSC must be completed before the declaration.
A finally liquidated entry is different. Section 1501 gives CBP 90 days after liquidation to reliquidate voluntarily. The July 15 order uses "finally liquidated" for entries beyond that period. Section 1514 separately generally permits a protest within 180 days after liquidation or reliquidation. Expiration of Section 1501 authority does not end every review route.
Phase 3 therefore cannot simply copy Phase 1 and extend the date filter. The declaration indicates, and Traverse treats as the operative constraint, that the order-backed reliquidation is not a general reopening of unrelated customs treatment.
This is why the delay should not be read as evidence that CAPE generally stopped working. Lord said the existing Phase 1 and Phase 2 functions remain operational. The deployment pause is tied to a new legal posture and a narrower permitted change.
The court order supplied authority, but Phase 3 still needs execution controls
The July 15 form order directed reliquidation of covered plaintiff entries more than 80 days after liquidation and supplied the IOR-matching and CAPE-acceptance structure, which Traverse mapped in its earlier Phase 3 analysis. For entries already beyond 90 days, the court said the order supplied the authority CBP needed. ECF No. 38 separately describes Phase 3 for finally liquidated plaintiff entries. For that population, Phase 3 must now answer a narrower execution question: can the reliquidation produce the IEEPA adjustment without producing any non-IEEPA duty adjustment?
Legal eligibility therefore does not settle every candidate. Original IEEPA reporting may be inconsistent, and the team may also have a separate non-IEEPA issue that requires its own route.
The validation must identify the IEEPA delta and prevent other adjustments
The phrase "improper reporting" deserves restraint. ECF No. 38 does not identify the affected patterns, estimate how many entries are involved, or allege fraud. CBP's general CAPE guidance separately describes filing scenarios that can change the refund calculation. They include combined 15 percent framework-agreement reporting and entries on which non-IEEPA duties, including Sections 201, 232, or 301 duties, were unpaid or underpaid. The record does not establish that those examples are the complete Phase 3 validation set.
What the filing does establish is that the original entry matters. Its reference to original reporting suggests that current refund estimates alone may not be sufficient. Traverse therefore recommends preserving a versioned trail from the accepted original through liquidation and any later changes.
Phase 1 guidance shows that removing applicable IEEPA Chapter 99 numbers triggers an entry-level recalculation of duties, taxes, and fees.
Traverse infers that a before-and-after system check may be required, although CBP has not published one:
What IEEPA amount and line treatment did the original accepted entry record show?
Under CBP's eventual validation rules, what IEEPA-only adjustment did the reliquidation produce?
Does a comparison of the controlling pre-Phase 3 liquidation version and the Phase 3 reliquidated version show any non-IEEPA duty adjustment?
These are Traverse's readiness questions, not CBP certification language.
Separate the Phase 3 file from every other customs issue
The hardest Phase 3 candidate will not be a clean entry with a correctly reported IEEPA line. It will be an entry that also carries an unresolved question about classification, customs value, origin, Section 232 or Section 301 duties, antidumping or countervailing duties, fees, or another element.
Phase 1 expressly told filers to submit any PSC for another issue before CAPE. ECF No. 38 supplies no comparable Phase 3 procedure.
For an internal readiness file, not an announced CAPE submission requirement, Traverse recommends tracking the covered entry, the plaintiff and court order, the original IEEPA reporting, and an internal estimate of IEEPA-only principal. Keep that estimate distinct from CBP's calculation and any CBP-calculated interest. Any unrelated correction theory needs its own legal and procedural assessment.
A separate file does not establish that another correction route remains open. Protest status, a separate court claim, reconciliation, liquidation instructions, or a closed deadline may control. The existing CAPE, PSC, and protest map remains the starting point.
Do not decide filing treatment from an issue label alone. Counsel and the broker should determine whether the unrelated issue affects Phase 3 eligibility, requires a separate preservation step, or creates a reason to hold the candidate once CBP publishes operative instructions.
Build an IEEPA-only entry delta schedule
The most useful pre-launch file is an IEEPA-only delta tab joined to the existing Phase 3 ledger. This is a Traverse operating recommendation, not a form CBP has announced.
Delta-tab field
Required showing
Existing-ledger key
Link to the existing Phase 3 ledger by its row key or entry number; add the CAPE declaration ID only when assigned
Original-reporting source
Identify the original accepted entry-summary version and preserve its line-level IEEPA reporting
Pre-Phase 3 baseline
Identify the controlling liquidation or reliquidation version immediately before Phase 3
Original IEEPA map
Capture the original line, IEEPA Chapter 99 provision, originally reported IEEPA duty amount, and relationship to the base HTS line without recoding
Internal IEEPA estimate
Isolate the internal principal estimate; label interest separately as internal estimate, CBP-calculated, or received
Phase 3 scope field
Record "no non-IEEPA duty change included"; link any separate issue to its owner, route, and deadline
Post-Phase 3 scope test
Compare the pre-Phase 3 baseline with the Phase 3 reliquidated version for unintended non-IEEPA duty differences
Evidence links
Link to the existing ledger's validation, reliquidation, certification, and payment records rather than duplicating those states
Back the delta tab with the original accepted entry-summary record, the controlling pre-Phase 3 liquidation version, and the Phase 3 reliquidated version. Link, rather than copy, the existing ledger's court order, IOR, broker-authority, CAPE-response, and payment records. For each excluded issue, record the owner and separate route. Version the tab and give it an as-of date.
What the filing does not settle
The August 25 declaration does not set a new deployment date. It does not publish validation codes, a revised CSV template, filer instructions, evidence requirements, or a process for challenging a rejected Phase 3 entry.
It also does not identify which of the reporting scenarios already described in CBP's general CAPE guidance the Phase 3 validation will cover. Importers should not invent a Phase 3 error taxonomy and present it as CBP policy. The new filing is a reason to preserve original-entry evidence and wait for the operative guidance.
The filing is limited to finally liquidated entries filed by plaintiffs for whom the court has ordered reliquidation. ECF No. 38 does not decide class treatment or establish an equivalent route for nonparties. No class-certification ruling appeared on the public docket reviewed through ECF No. 38 on August 26. Those coverage issues remain separate from the Phase 3 scope control. Traverse's analysis of refunds beyond CAPE addresses the additional claims-plan problem without turning CAPE into universal relief.
When CBP announces Phase 3, the first useful question will not be how many old entries the portal accepts. It will be whether the agency has published and demonstrated the promised scope control.
Read the launch guidance for the eligible order-backed population, original-entry fields tested, validation and rejection codes, treatment of improperly reported IEEPA duties, and post-reliquidation evidence. Use the original accepted version to assess original reporting, but test Phase 3 scope by comparing the controlling pre-Phase 3 liquidation version with the Phase 3 reliquidated version. Reconcile the importer's IEEPA principal estimate to CBP's resulting duty adjustment, record CBP-calculated interest separately, and investigate any non-IEEPA duty difference.
If future guidance creates rejection or hold statuses tied to plaintiff, IOR, court-order, or original-reporting validation, monitor each separately. Do not group those records with an entry that passed validation but has not yet been reliquidated or paid.
Under Traverse's launch test, Phase 3 will be operationally proven when it can implement only the authorized IEEPA duty adjustment or adjustments for an order-backed entry and produce evidence that no duty adjustment outside the refund occurred. A launch notice without that record would establish availability, not successful scope control.
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