While tariff claims are not new, the recent litigation against the International Emergency Economic Powers Act (IEEPA) is adding new considerations for importers. There are a few actions businesses can take today to prepare for the Court of International Trade (CIT) and U.S. Customs and Border Protection’s (CBP) guidance on the IEEPA refund process.
Identify the Right Partners to Support Your IEEPA Claims
Businesses with IEEPA tariff claims will want to work with specialists in customs and international trade. But the type of partner you need depends on what your business needs done. Typically, importers with tariff claims may want support with legal strategy, filing work, or claims trading.
Here’s a basic overview of the types of firms an importer might consider and what they do:
Now that the Supreme Court has ruled against IEEPA tariffs, importers are more likely to receive refunds for tariffs paid. However, the Courts and CBP have yet to define the exact process for requesting refunds, leading to uncertainty about the procedures and timing. The right partner can help importers navigate this uncertainty or monetize their claim today by selling it to institutional investors.
Determine the Best Path to Refund
What’s the difference between claims trading and the standard refund path? Claims trading means working with a claims trader or financial broker to sell your claim at a discounted rate in exchange for guaranteed cash. This is a great option for companies that want immediate or predictable cash flow.
The standard refund path means working with legal counsel or a customs broker to fight for a full refund on the tariff claim. This process will depend on CIT guidelines in coordination with CBP. While the refund timeline remains uncertain and may take several years to resolve, waiting can be a viable option for companies with experienced legal counsel that are comfortable navigating the legal process and have the financial capacity to hold the claim through a potentially extended recovery period.
While cash-flow considerations are often the primary driver, companies should also evaluate the size of their IEEPA exposure. For businesses with larger claims, a hybrid approach may make sense, pursuing the standard refund process while monetizing a portion of the claim through a sale.
How Would I Sell My IEEPA Claim?
The best way to sell a potential IEEPA claim, or a portion of a claim, is to work with a financial firm that specializes in claims trading. Claims trading is common in areas like bankruptcies, litigation, tax and tariffs. Look for firms with proven track records of brokering complex claims, and who have long-standing relationships with institutional investors.
For IEEPA-related claims, the claims trading process will involve a due diligence phase to evaluate claims, matching claim holders with potential buyers, and structuring the transaction to ensure proper execution and settlement for all parties.
Seaport Global’s claims trading desk has a proven track record helping clients unlock value from complex, time-sensitive asset classes. Leveraging unmatched sourcing expertise and deep institutional investor relationships, we have executed transactions involving hundreds of millions of dollars in Employee Retention Credits and several billion dollars in claims from landmark cases such as Lehman Brothers, Madoff, and the Visa/Mastercard antitrust litigation.
We built Seaport Marketplace to connect businesses holding tariff refund claims with institutional investors, while also providing a practical resource for importers navigating a rapidly evolving landscape. If you’re looking to convert a pending refund into immediate liquidity, our team can help you move quickly and confidently.
Contact Seaport Global to learn more.
Takeaways
- Three types of firms may serve importers with IEEPA claims: law firms and customs attorneys, customs brokers, and claims traders.
- These roles are not mutually exclusive. Many importers will engage more than one type of firm depending on the size and complexity of their exposure.
- Claims trading means selling your refund right at a discount in exchange for guaranteed, near-term cash. The standard refund path means pursuing full recovery through CIT and CBP proceedings, which may take several years.
- For importers with larger claims, a hybrid approach may be optimal: pursue the standard refund process while monetizing a portion of the claim through a sale.
- When evaluating claims trading firms, look for proven track records with complex claims and established institutional investor relationships.
Seaport Global and Seaport Loan Products LLC provide financial services and are not engaged in the practice of law. This post is for informational purposes only and does not constitute legal or financial advice. Companies should consult qualified trade counsel regarding their specific legal rights and obligations.
