Phase 3 Tariff Refunds Open With 425,517 Entries Accepted

CBP’s Phase 3 tariff refund system accepted 425,517 finally liquidated entries on launch day, Oct. 6, according to a court filing reported by Supply Chain Dive.

If your store imports its own inventory, you are the importer of record, and only that party gets paid. At Ecommerce Paradise I write for owners who sell expensive goods, so the question here is simple: do your entries sit in this pool, or does your supplier hold the claim?

Phase 3 is the narrow one. It covers only finally liquidated entries tied to a court-ordered reliquidation, and the launch numbers show how lawyer-driven it is. I cover who qualified, how the pool grew to $136.6 billion, where the government appeal stands, and the five checks I would run this week. If you run the standard model from my guide to high-ticket dropshipping, I cover your angle too.

Customs records and refund claims attach to a legal entity, so form the LLC your imports will run through with Northwest Registered Agent, the LLC formation service I’d pick for ecommerce owners. Plaintiffs and regulators look up the address on an LLC filing, and Northwest’s registered agent address keeps yours off it. Form your LLC with Northwest →

CAPE Phase 3 Takes 425,517 Entries on Launch Day

CBP launched Phase 3 of its Consolidated Administration and Processing of Entries system, known as CAPE, in the early morning of Oct. 6, according to a post from customs brokerage Sobel Network Shipping. By midday, 477 Phase 3 declarations had passed initial checks, covering 425,517 eligible entries.

Supply Chain Dive reported on Oct. 8, citing an Oct. 6 court filing, that the same 477 declarations were accepted for processing. The outlet says this phase is expected to handle roughly $11.4 billion, or 6.9% of all IEEPA tariffs collected.

That needs a baseline. Corp-Intl’s Sept. 17 explainer puts the full pool at about $166 billion across 53 million entries and 330,000 importers. By my math, 425,517 entries is about 0.8% of those 53 million. Day one is a first slice, not the finish.

The gate is tight. Only plaintiffs that gave CBP a valid importer of record number “by July 30, 2026” can currently receive these refunds, per the court filing as relayed by Supply Chain Dive. Plaintiffs who submitted later get instructions at a time CBP has not stated. Kelly Nelson of KPMG Trade & Customs Services called the launch “another important step in the CAPE process” for importers in the litigation.

Across all phases, the numbers moved. Sobel reports 297,887 declarations submitted through early October, with 209,262 clearing validation and covering 27.4 million entries. About $136.6 billion in potential and certified refunds has been accepted, and Supply Chain Dive says $126 billion of it went to Treasury for disbursement as of Oct. 2.

Compare that with September. Cherry Bekaert’s Sept. 23 alert and Corp-Intl show roughly $134.7 billion accepted and $122 billion certified. The dates differ by a few weeks, but that is about $1.9 billion more accepted and about $4 billion more sent to Treasury.

The rejection figure is the one to read twice. Sobel says about 6.2 million entries failed entry-level validation, mainly for three reasons: entry dates outside CBP’s 90-day statutory reliquidation window, missing Chapter 99 HTS numbers tied to the original duties, and duplicate entry numbers already submitted. Against the 27.4 million that cleared, that is roughly 18% failing if those two buckets are the whole pool, though Sobel does not say so.

Processing is not payment. Corp-Intl says valid refunds typically issue 60 to 90 days after acceptance, by ACH to a US bank account, with interest running under 19 U.S.C. §1505. National Jeweler’s Oct. 8 report adds that you need an ACE Secure Data Portal account and ACH setup, because CBP does not issue checks. Supply Chain Dive’s headline says CBP “starts paying out,” but its text describes processing, and no source I read reports a Phase 3 dollar landing yet.

How CAPE Reached $136.6B and Where the Appeal Stands

The pool exists because the Supreme Court struck down the IEEPA tariffs in February, per Supply Chain Dive. CBP then rolled CAPE out in stages. Thompson Hine’s Sept. 16 alert dates Phase 1 to April 20 for unliquidated and recently liquidated entries, and Phase 2 to June 29 for certain reconciliation entries.

Phase 3 slipped. Supply Chain Dive says it was targeted for the end of July, while Cherry Bekaert says an Aug. 20 release was postponed and Judge Richard K. Eaton ordered CBP to explain on Aug. 27. Different outlets, different dates, same result: the long tail arrived two months late.

I have followed this thread since spring. In May I covered the first $85 billion CAPE wave. In June I wrote about the government’s move to freeze refunds on appeal.

In July I explained why most sellers miss out. On Oct. 3 I previewed who qualified for Phase 3. This post is the first look at what actually happened when it opened.

The counterpoint is the appeal. The Justice Department argues that CBP cannot reliquidate old entries, or refund importers who never sued, without an importer-specific court order, and that the Court of International Trade cannot grant universal relief. The government appealed on May 29, per Corp-Intl, and as of mid-September the Federal Circuit had set no argument date.

The other side is the court’s original order, which required refunds whether or not the importer sued. Per Cherry Bekaert, non-litigants cannot use CAPE for finally liquidated entries unless a court orders it. Until the Federal Circuit rules, those importers sit in limbo. The sources I read agree on the status quo and differ only on who should win.

One scope note from National Jeweler: only IEEPA duties are refundable. The 10% to 12.5% “forced labor” tariffs that took effect in July are not part of this process, so a refund on last year’s duties does not lower this quarter’s landed cost. My earlier post on the 77 Chinese goods named for tariff cuts covers where duties are heading next.

What Phase 3 Means for Store Owners Who Import

My read is that Phase 3 is a lawyer’s phase, and day one proves it. Dividing 425,517 entries by 477 declarations gives about 890 entries per declaration, my arithmetic, not a reported figure. That is a large importer with counsel, not a store that brought in a few pallets.

It still matters to a small operator, because the money is real at small scale. Here is hypothetical math, not a reported number. Say your LLC imported $300,000 of landed goods across the IEEPA window at a blended 20% duty. That is $60,000 sitting at CBP, and a single container of furniture or powersports gear can carry five figures of it.

Which phase applies depends on the entry’s status, and that is a broker question. Unliquidated and recently liquidated entries go through the earlier phases. Finally liquidated entries need a pending court case and a reliquidation order. If you hold finally liquidated entries and never sued, the honest answer today is that you wait on the Federal Circuit or talk to trade counsel, and I am not a lawyer, so that conversation is not one I can have for you.

The 6.2 million failed entries are the part I would act on first. My view is that the first dollar leaks through bad paperwork, not missing lawyers. A declaration with a missing Chapter 99 number or an entry past the 90-day window bounces, and you lose weeks inside a 60 to 90 day payment clock. Those are the same sloppy-record problems that draw enforcement, which is why I flagged the DOJ trade fraud unit naming resellers a target. A rejection is not fraud, but both punish careless customs files.

The entity question comes next. CBP pays the importer of record, not the brand on your website, and sellers who run storefront sales and imports through one LLC have a muddier trail than sellers who split them. If you want a clean second entity for the import line, Bizee can stand one up quickly.

My walkthrough of how long an LLC takes sets the timeline. My business formation guide covers the rest.

Your address is part of that record. If your customs file lists a home address, fix it before the next filing, and my guide to getting a business address without renting an office shows the options.

Then there is the cash. A refund is a one-time event, not a revenue trend. Book it on its own line so margin reporting stays honest, and read why your payout is not your profit before treating it as ad budget. A bookkeeping platform like Finaloop keeps the refund out of cost of goods sold.

There is a financing angle too. I wrote this morning about the 24-year Treasury yield high and what it does to credit lines. When borrowing costs climb, a refund is the cheapest working capital you will find, but only if you plan around the 60 to 90 day window and not around the day you filed.

If you would rather stop being an importer, the cleanest move is domestic stock. Suppliers on Inventory Source put customs forms on someone else’s desk. Wholesale2b works the same way for general catalogs.

My piece on private label supply chain problems shows what you take on when you do import.

If you want a high-ticket store built on domestic suppliers from day one, so tariff paperwork is never your job, my turnkey done-for-you team builds and launches it for you.

Customs paperwork eats the hours you need for ads, suppliers and margin. My team scales the store you already have while you sort out the refund. See the scaling service →

Five Checks Before You File or Fix a CAPE Entry

These are the five checks I would run this week, in order. The first two cost a phone call.

Get an entry list by status from your customs broker. Ask for every entry filed under your importer of record number since IEEPA duties began, tagged unliquidated, recently liquidated or finally liquidated, and ask whether you are a plaintiff on any of them. That one sheet tells you which phase applies to each dollar.
Confirm your importer of record number reached CBP. If you are a plaintiff and your number went in after July 30, ask counsel for the instructions CBP promised, because the court filing says those arrive later with no date.
Audit entries against the three rejection reasons. Check each entry date against the 90-day reliquidation window, confirm every line carries its Chapter 99 HTS number, and make sure no entry number was submitted before. A tool like DocHub speeds up signing and returning the documents your broker needs.
Verify ACE access and ACH enrollment. You need an ACE Secure Data Portal account and ACH details on file, and refunds do not arrive by check. If you live abroad, know how you will move the money out of the US account, and a multi-currency account like Wise helps with that step.
Assign the paper trail and book the refund separately. Entry summaries, commercial invoices and proof of payment take hours to gather, so hand that to a contractor from OnlineJobs.ph and send one folder to counsel. Record the refund as its own line in QuickBooks or your books of choice, and if your import setup is tangled across suppliers and entities, a quick discovery call beats guessing.

Frequently Asked Questions

Is Phase 3 open to every importer?
No. It covers finally liquidated entries for plaintiffs whose entries fall under a court reliquidation order and who gave CBP a valid importer of record number by July 30, per Supply Chain Dive and Sobel. My Oct. 3 post has the eligibility detail.

Has CBP paid any Phase 3 refunds yet?
The reports I read describe declarations accepted and processing, not payments. Corp-Intl says valid refunds typically issue 60 to 90 days after acceptance, so plan cash flow without counting on a date.

Why did 6.2 million entries fail validation?
Sobel lists entry dates outside the 90-day reliquidation window, missing Chapter 99 HTS numbers and duplicate entry numbers as the main causes. Fixing those before you file is the cheapest win available.

Are the July forced labor tariffs refundable?
No. National Jeweler reports that only IEEPA duties qualify, so the 10% to 12.5% forced labor tariffs are outside this process.

I run a standard dropshipping store. Do I get anything?
Almost certainly not directly, because the refund goes to the importer of record and that is usually your supplier or their forwarder. If you are still picking what to sell, grab my free high-ticket niches list. The 150-plus niche breakdown is the next stop after that.

Is this tax or legal advice?
No. I am not a tax or legal advisor, so run refund treatment past your accountant and any claim past trade counsel. My guide to filing taxes as an ecommerce seller covers the record-keeping basics.

Not sure whether your entries sit in Phase 3 or your supplier is the importer? Get 1-on-1 coaching and I will help you sort out your import setup. Get the coaching details →

Make the broker call today, even if the answer is that your supplier is the importer. A confirmed “not mine” costs nothing, and a missed “yours” can cost five figures. Subscribe to the YouTube channel for daily breakdowns. More breaking news coming through the day.

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Trevor Fenner

Trevor Fenner is an ecommerce entrepreneur and the founder of Ecommerce Paradise, a platform focused on helping entrepreneurs build and scale profitable high-ticket ecommerce and dropshipping businesses. With over a decade of hands-on experience, Trevor specializes in high-ticket dropshipping strategy, niche and product selection, supplier recruiting and onboarding, Google & Bing Shopping ads, ecommerce SEO, and systems-driven automation and scaling. Through Ecommerce Paradise, he provides free education via in-depth guides like How to Start High-Ticket Dropshipping, advanced training through the High-Ticket Dropshipping Masterclass, and fully done-for-you turnkey ecommerce services for entrepreneurs who want a faster, more hands-off path to growth. Trevor is known for emphasizing sustainable, real-world ecommerce models over hype-driven tactics, helping store owners build scalable, sellable, and location-independent brands.