Tariff Refunds After IEEPA: What’s Next For Importers? With Valerie Sorensen-Clark (Podcast)

Lalo (00:00.096)

suddenly hear a female voice interrupt, that’s because she might hear something off. and so, you know, th that that’s that’s who that is in the background. But again, no worries. W we can always edit and cut. Okay. So so let’s go ahead, Andy.

Valerie Sorensen-Clark (00:05.753)

Okay.

Valerie Sorensen-Clark (00:15.96)

Okay.

Andy Shiles (00:17.804)

Okay. hang on just a sec excuse me.

All righty. Here we go. Hey folks, we’re on for another show of the Simply Trade Podcast, and we are looking forward to another good discussion. By the way, thank you so much for your listenership for what you guys are doing. You’re sharing us, you’re liking us and all that. And hope you’ll keep doing it. Subscribe to us. Lalo, it’s it’s humbling. I’ve even had somebody this past this week that

So, yeah, you know what? I heard about that show and and I’ve been and I’ve listened to an episode and they’re a new listener here in Arkansas, Central Arkansas. So it’s like good night. That’s it’s humbling. So to you and your team there, Lala, they’re doing a good job with with putting everything together. So you make us look good.

Lalo (01:13.536)

Well thank you. No, I I actually had a encounter of the same day the same way. never in my life did I ever think anybody here in El Paso would I was at a Costco and those are super big lines all the time and I just happened to have gotten behind someone that

Andy Shiles (01:28.426)

Mm-hmm. Yeah.

Lalo (01:34.397)

As he checked out and he was leaving, I think he timed it perfectly because he was probably embarrassed or did not or did not want to say something. I know he’s listening because he says he listens to every episode, but he didn’t want to give me his name. He didn’t want to tell me where he’s from. I told him, Look, I’ll give you a shout out. But he didn’t want to say anything, but he’s like, Hey, y’all should keep up that good work that you’re doing with that podcast. And I was like, What the heck? Really? You listen to the pod So anyway, but yeah. So anyway, but today we do have

Andy Shiles (01:56.831)

my goodness.

Valerie Sorensen-Clark (01:58.085)

Let’s go.

Lalo (02:04.28)

A guest that we’ve had several of their folks from their team on our on our podcast before. So the the law firm GDLSK, we’ve had Eric Smithwise, we’ve had Heather Littman, and we’ve had one of the founders, Mr. Frank Desiderio, as well. I think that’s about it that we’ve had. I I I’ve been trying to get one of your newer attorneys on the podcast but

Andy Shiles (02:10.87)

Mm-hmm.

Lalo (02:33.456)

I don’t know if Sarah would Raymond will come on my show or not. I hope she does one day. Yeah, and Alan. So Alan as well. Yeah. So so

Valerie Sorensen-Clark (02:36.912)

I’ll try to convince her.

Andy Shiles (02:38.798)

Well we don’t we don’t bite.

Valerie Sorensen-Clark (02:43.152)

pretty persuasive. I’ll work on her.

Lalo (02:46.174)

Yeah, and then so do we also have Alan that that said he’ll come on. he’s another one of the co founders. but anyway, yeah, he is, he is. So but anyway, so we have a a an another attorney from from that law firm, Valerie Sorensen Clark. Please tell me I said that right.

Andy Shiles (02:50.637)

Mm-hmm.

Alan’s a good guy.

Valerie Sorensen-Clark (03:07.342)

You did. You did.

Lalo (03:08.732)

Okay, cool. Okay. So anyway, so Valerie, thank you. Mallory reached out to us because she’s been she’s done a few or at least that I know of at least one webinar talking about several topics, especially regarding importing and and CAPE and and AIPA and terrorists and all that kind of stuff. And she’s also been on a panel with one of two, three of our I think it was three of our

Either hosts or guests at AAI. So you were on with Cindy, Alan, Pete Mendo. Was Pete on your panel?

Andy Shiles (03:39.299)

Mm-hmm.

Valerie Sorensen-Clark (03:46.129)

Yeah, at what point are we allowed to pause, by the way? Like, is that? Okay, is it okay to not say that I reached out to you? Because that just sounds kind of weird. Okay, thank you. I mean, I did. Because it sounds like I’m being solicitous, but it was more just like, this could be fun. But yeah, okay, Sorry. Thank you.

Lalo (03:49.608)

Yeah. Anytime.

Andy Shiles (03:50.114)

you any time.

Lalo (03:56.587)

No, no, no worry. No no don’t don’t worry. Th it w we’ll we’ll definitely we’ll definitely we’ll definitely we’ll definitely edit that out.

Lalo (04:07.082)

Yeah, yeah. No don’t worry. we can edit that out. Yeah. So so at the A so at AAEI she was on a panel with Cindy Allen, Pete Mento, if I’m not mistaken. And was Amy Morgan on there or no? Valerie? okay, so th she was a moderator and you three were on the panel. Okay, so every one of you have been on our podcast now. So yeah great.

Valerie Sorensen-Clark (04:23.056)

She was. She was a moderator.

Andy Shiles (04:33.538)

Been on the show.

Lalo (04:36.276)

So welcome, Valer. Yeah, thank you. Thank you for joining us here on our podcast.

Valerie Sorensen-Clark (04:36.784)

complete this set.

Thanks for having me.

Andy Shiles (04:45.312)

folks, for today’s topic I think we’re gonna be talking a little bit, Valerie with the IEEPA and and some of the refunds and things of that nature, right?

Valerie Sorensen-Clark (04:56.516)

Yeah, that’s what you want to talk about.

Andy Shiles (04:58.144)

Okay. Well well it it’s with that is you know, folks remember there’s some tariffs that the Trump administration had put in and it went to the Court of International Trade, I believe. And Valerie, you’re gonna have to correct me because I’m dumb as a box of rocks. So I’m gonna have this all, you know, screwed up and and and all that. But the court ruled that under the IEEPA

I guess laws, it does not provide for the provision to issue tariffs. So all of the tariffs that were collected over whatever period of time there there was there, apparently there are refunds now that have to be issued by the government. And that process is underway and actually from what I gathered it’s fairly simple. However, you gotta know what you’re doing. So

Have I got that in the context that that’s what’s happened in in in in a nutshell for somebody, you know, like the dumb old country boy here that can figure it out, right?

Valerie Sorensen-Clark (06:09.134)

Yes, that’s accurate.

Andy Shiles (06:11.114)

Okay. So why don’t you say and let’s start off a little bit, what do you know about the IEEPA and your background there and and on what guidance you can give somebody?

Valerie Sorensen-Clark (06:24.132)

Yeah, I was an in-house customs, an in-house attorney with customs for almost a decade. I left in April. I was in the International Trade Litigation Office for the last eight years of that time. And I was CBP counsel on the OS selections and part of the broader IEEPA litigation team in my office. So I was

Andy Shiles (06:33.133)

Mm-hmm.

Andy Shiles (06:41.23)

Mm-hmm.

Valerie Sorensen-Clark (06:53.872)

you know, CBP’s attorney on that case, which is the case that, and along with learning resources and the Oregon lawsuit, are the ones that were kind of wrapped together and went at it, that were considered at the Supreme Court learning resources didn’t have the jurisdiction. but yeah, so I was the attorney on that. And then I was also on the team.

for Atmos, which was at the time the case that the CIT was using as the vehicle for the CAPE refunds. And I largely drafted the, worked on the brand and Lord declarations, the March 6th and March 12th ones in that case that were the first instances where the CBP was able to speak about CAPE.

say, hey, we’re doing this. And then also this is what it’s going to look like. So I worked very closely with the Manit Customs who was designing Cape to write the March 12th declaration in particular. So I have a really good understanding of how it works.

Andy Shiles (08:08.546)

Well, you definitely were like right there on the inside with that. when did you step out from customs and and into the private sector?

Valerie Sorensen-Clark (08:12.176)

I was.

Valerie Sorensen-Clark (08:20.526)

In April. Actually, yeah, I left in April and I started at TDLSK in May.

Andy Shiles (08:27.628)

Well, congratulations to the other side of the table. but from an attorney’s perspective this go ahead.

Lalo (08:31.039)

Yeah.

Valerie Sorensen-Clark (08:31.044)

Thank you. Thank you.

to pause, can we pause real quick? Can you, is my air conditioner too loud? Should I turn it off? Okay, I’m just gonna pause and fix my, I gotta fix my browser. Don’t want that on video. Sorry.

Lalo (08:37.844)

Yeah, go ahead.

Lalo (08:41.79)

No, no, no. We can’t hear it at all. Yeah. Yeah, we have we have a fe Yeah, we we ha we have a no problem. We have a feature called echo cancellation and we can’t really hear anything in I mean loud noises we may be able to hear, but we can cancel that out. So d right now we can’t hear anything.

Andy Shiles (08:42.274)

Mm mm. No, you’re fine. Yeah.

Andy Shiles (09:01.102)

Yeah.

Valerie Sorensen-Clark (09:01.328)

Great, because it’s distracting to me, so I’m like, gosh, okay, great, that’s great. Okay, give me one second, let me just. Sorry, so uncomfortable. I’m like, my God, can’t move. Trying to do it discreetly and I was failing miserably and I’m like, this is ridiculous. Okay, all right, okay, we’re good, we’re good. Yeah, lady problems, sorry. Okay, and I’m good now, I think, I hope, we’ll see. All right, there we go.

Lalo (09:04.37)

Yeah. No worries. Mm-hmm.

Andy Shiles (09:06.028)

No, you’re fine.

Andy Shiles (09:13.484)

No, no. Well that’s a

Andy Shiles (09:26.414)

So coming out of customs, I mean you’re hardly out of in back into the private sector. Well, let me ask this question. Were you an attorney in the private sector before going into C BP?

Valerie Sorensen-Clark (09:43.311)

was. I was in private practice doing international trade, international arbitration, some other things for about two years in like big law before. Then I was a law clerk for Judge Stamthu at the CIT for four years during his tenure as chief judge. Then I was a professor, international trade and customs professor in China. And then I went to CBP.

Andy Shiles (09:55.352)

Mm-hmm.

Valerie Sorensen-Clark (10:13.52)

And now I’m here as a partner at GDL’s kit.

Andy Shiles (10:17.845)

Wow.

Lalo (10:17.856)

That that you must have started when you were like six, seven years old.

Valerie Sorensen-Clark (10:19.44)

my god. God bless you.

Andy Shiles (10:21.536)

Yeah, d I was just gonna say Yeah yeah.

Valerie Sorensen-Clark (10:26.734)

This is great. I’ll come on your podcast anytime.

Andy Shiles (10:33.304)

Yeah, well, I will say that is an extremely impressive background and and experience. That that’s the one thing though is that you know then both the well actually three sides of this then it sounds like the private sector, obviously being in practice yourself, running your own business, if you will.

Valerie Sorensen-Clark (10:47.556)

You do.

Andy Shiles (10:53.036)

being on that side of things, helping companies from you know, litigating into the the CIT and and whatnot, and then joining the government side, which is a bureaucratic nightmare. there’s a l it’s the flexibility internally to the government sometimes is or should I say the bu the bureaucracy just chokes you sometimes in in getting progress.

on s certain issues, but you know, there’s obviously been some things going through. Now coming back out. So but you also have academia experience in there. So that’s a whole different animal, isn’t it?

Valerie Sorensen-Clark (11:36.972)

and from the judge’s perspective as well.

Andy Shiles (11:38.44)

yeah, well there you go. So

Valerie Sorensen-Clark (11:41.186)

I wrote judicial opinions for first drafts anyway.

Andy Shiles (11:47.351)

With all of that in the current scenario, let’s go back to this IEEPA situation. Is I guess importers are are they asking you, you know, what should I do? Do I qualify? How do I know if I qualify? I mean, I’m like, look, I’ve been importing, you know, my company’s been importing, you know, all these goods. What do I do? Where do I go? And what what do you advise them to do?

Valerie Sorensen-Clark (12:18.16)

That’s a really broad question. So why aren’t I, I know, right? Do I, should I start off with, guess, how, yeah, well, how, why don’t I frame it in how the government is thinking about the, the entries that need, that have refunds that are pending or, you know, that had, where people paid IUPA duties. And

Andy Shiles (12:21.784)

Yeah.

Andy Shiles (12:28.44)

Whatever you want to do.

Lalo (12:43.786)

Yes.

Andy Shiles (12:45.879)

Yeah.

Valerie Sorensen-Clark (12:47.792)

I’ll start off actually, I’ll back up a little bit and I’ll just give a little extra context and stop me from getting too into the weeds. it was the CIT said that they were, IEEPA Tariffs were not legal. And then that was appealed almost immediately. And then it went to the Court of Putsbothra Circuit and then they issued a pretty quick decision as well saying, you know, upholding that decision.

But also, and this is an important point, they remanded the order that the court issued where it said that the government had to give back all the refunds to everybody, this universal relief. The court of appeals said, CIT, you need to reconsider that because of the Supreme Court’s decision in CASA, which was earlier that year, which kind of limited the scope of universal injunctions. that was the order.

is telling the government what they had to do. And so that was kind of pending. And then when the government appealed to the Supreme Court, so even though the court of appeals said, we agree with you, but they said you need to rethink the scope of your order in that decision. And so that was still hanging out when the Supreme Court case happened and then Supreme Court agreed that

The tariffs were not legal, but the Supreme Court doesn’t do the actions, right? It’s just said, this is the law. doesn’t say, it didn’t say like, you need to do this, you do that. It was just like, here you go. And we’re going to give it back to them. The CAFC and that they’re the CAFC’s mandate. Damn right. And the mandate is what, when the CAFC says the court of says, yeah, this, this is fine. no. And, so, so put a pin in that.

that that sort of legal issue was still floating out there, like the scope of what the court was allowed to legally order. So keeping that in mind, I mean, if I’m losing you, if I get too into it, but it’s important to understand some stuff that people are very confused about. So the government is thinking about these and they said this in, I believe it was their May 29th motion.

Andy Shiles (14:56.866)

You’re fine.

Valerie Sorensen-Clark (15:11.7)

in what case it keeps going. They keep changing cases. I think it might have been your own notions. It could have been DOS. the one where they said that we’re going to appeal this order and everyone was freaking out, in that one, they laid out the three different categories that they were thinking about these entries. And the first was unliquidated entries. The second category was liquidated entries that had

a valid case pending before the CIT. And then the third category were liquidated entries with no case where the entries were not in front of the CIT. So the government has had, CBP has had a long standing view that, well, I’ll put a pin in that. I don’t want to get too into the weeds. I’m sure you’re going to ask me about that later, but just thinking about it in those contexts will help you understand.

what is active right now. So right now, CAPE can accept unliquidated entries, but for certain types. And that’s because there were a few types of entries that created technical issues that needed additional programming. And so the government, you know, they made, was like a Sophie’s choice, you know, and the decision was made to

give as many people as much of the refunds as possible as soon as possible, rather than waiting until all of the functionality was built out for all of the illiquidated entries. And in fact, executive director Susan Thomas said in her June 9th hearing, which is something I had predicted, I said, I don’t usually speculate, but in the webinar I was like,

I would ask me to take in a couple of months for anybody, a couple of more months for anybody to have gotten any refunds if they had waited until all of the liquidated entries could have been covered. People were very upset about reconciliation and they were very upset about drawback. They were very upset about entries with ABCD duties on them. And then there’s informal entries. So there were these very specific categories with very specific programming issues.

Valerie Sorensen-Clark (17:36.291)

operational issues. so, yeah, I mean, it was a let’s get as many people, you know, with the simpler entries, their money back as soon as possible. So let’s build out all of that functionality. Let’s focus on that so that we can get that money out. And that was a substantial amount. Also, you know, trying to get people refunds before the entry is liquidated. And I can explain the legal reasons why liquidation gets tricky.

But so in addition to the vast majority of simpler entries, there is one of the more difficult categories that they did end up being able to you know, develop more functionality for. And that was entries that were flagged for reconciliation. So type O, type O1, type O2, and type O6, but not, you know, not where it was like a type O9 final. So that chunk.

Andy Shiles (18:26.904)

Mm-hmm.

Valerie Sorensen-Clark (18:33.434)

they were able to build out the programming for that. And that went live, I believe, June 29th. So they are making progress on the other types of unliquidated entries, but that helped.

Andy Shiles (18:42.734)

Okay.

Andy Shiles (18:46.898)

and Lisa there’s progress on it. Just just for our listeners real quick, we’ve used the term CAPE. That’s the system that customs uses to to where you file for I I I want a refund and it goes through that that system and processing. So the programming to do the refunds in this case are in that CAPE system, correct?

Valerie Sorensen-Clark (18:51.428)

Yes. I’m sorry. Yes.

Valerie Sorensen-Clark (19:04.944)

Mm-hmm.

Valerie Sorensen-Clark (19:11.258)

Correct, yes. And, yeah.

Andy Shiles (19:14.178)

Okay.

Andy Shiles (19:18.124)

Well, and and here’s the other thing is that in in looking at it, it just seems like there’s a lot of confusion in some of this. But the process itself, from what I’m I’m looking at, I mean I’ve actually if

Done some of this myself is that you have to have an ACE account, which means as an importer, you need to go in. And if you don’t have an ACE account, you need to get in there and and and and get an ACE account established for yourself so that you can run your own reports, you can see what customs sees on your entries and those kinds of things, and run your own reports on on w what the government’s seeing. But at the same time, it’s that if you know the entries that

would qualify for a refund, you just enter those entry numbers, I guess, into this system and flag them or whatever, and it’s electronically done and it’s goes off into the system and it’s processed. And and so you have to have your bank account in there as well. But that’s a pretty simple process compared to what it used to be, where you’re filing protests or amendments and all that kind of stuff, right? So we’re

Valerie Sorensen-Clark (20:23.29)

Yeah.

Valerie Sorensen-Clark (20:27.416)

Yeah, and thank you for pointing that out too because I know that they tried to design that to be as simple as possible.

Andy Shiles (20:37.644)

Well, and it’s I d I guess let me ask this question, because you you were right in the midst of all of that kind of stuff is from what you were destru describing earlier. Man, I’m gonna tell you what. Sometimes you wake up in the morning and it’s like my tongue is all tied up and and whatever. And I feel it’s like I feel like I’m my rodeo here trying to talk at the same time. Okay. as I’m trying to get through this, it’s that

You were part there there seems to be, I guess, in the development that of what you were talking about in in the programs here, a very I guess, streamlined process, a very forward thinking type of a process to simplify things, which is contrary to what it has been in the past.

Where it’s been very bureaucratic and very, you know, you do this and then you do this and you wait thirty days or ninety days or a hundred and twenty days or whatever it is. It’s like to you know, you and the team there, it’s like there was a change, I guess, in the out in in your perspective of what you were trying to accomplish.

Valerie Sorensen-Clark (21:47.568)

I… yes and no. I think that the best way to think about it is this way.

There are two hurdles, two big hurdles to CBP giving people their money back in any context, Legal and operational. Do they have the programming, right? And one of my favorite people at Customs once said who deals with ACE a lot, you know, they want Google technology, they need to give us Google funding.

Andy Shiles (22:10.358)

Fifty.

Valerie Sorensen-Clark (22:26.576)

It’s a massive operation. know, this was an unprecedented situation for everybody. You know, this grand experiment that was like, but it’s a kerfuffle, for lack of better word. You know, it’s a kerfuffle for everybody. it’s the law and the systems weren’t designed for this. And that’s where you’re seeing the, that’s where the slowness is coming in.

I mean, it’s not even honestly, it’s been pretty fast as you pointed out for typical stuff. But a lot of what the sort of process that you’re talking about for other kinds of refunds, that’s legal hurdles. And the agency can only do what it’s legally authorized to do, which is the important thing.

The reason why they prioritized, and that speaks to the reason why they prioritize unliquidated entries, was because they have the legal authority to reliquidate unliquidated entries. There’s no hurdle on that. can, you’re not even reliquidating because they were never liquidated in the first place. So let me correct myself. They can issue the refunds on unliquidated entries because they never even liquidated in the first place.

They can do that. that’s something that’s important that people missed in some of the government’s filings. They’re doing that under their own authority. They don’t have to wait for the court to tell them that they need to do this. So that’s why they focused on those. like, we don’t have to wait for the court to do this. Let’s do these. that’s legal distinction, but it’s a big one in practice.

Yeah, so I don’t know if that answers that question. It’s kind of all melds together because it’s such a big topic.

Andy Shiles (24:29.996)

Well, it does, but I mean well, for for our listeners, one of the things I mean, we’re getting into a little bit of some advanced stuff, but hang in there with this discussion because what it means is if especially if you’re a small or medium sized company, the big companies have deep pockets and they’ll have legal teams and they do all their things. But for the small guys or the medium sized guys,

you need to listen through this a little bit. So you know, this should give you enough information so that you can hear the questions or here’s the information you need to provide to your broker or to your counsel and all that. And we’re gonna get into that in a second, is like, okay, Valerie, what should they be asking them? But as we’re looking at it, one of the things you keep throwing out the term liquidated, and that’s for those of us in the industry, we may know that, but it

Valerie Sorensen-Clark (25:09.156)

Yeah.

Valerie Sorensen-Clark (25:13.807)

Yeah.

Valerie Sorensen-Clark (25:18.756)

liquidation is, yeah. For lay people, my favorite way to explain liquidation, so being a professor in China made it really, it was a crash course in explaining complicated terms simply. So my favorite way to describe liquidation is that it’s CBP’s final bill. It’s when you import your issuing, you’re giving deposits on what you think is owed.

Andy Shiles (25:23.202)

What is what’s I mean, what’s the big deal about a liquidated entry or unliquided? Yeah.

Andy Shiles (25:38.914)

Mm-hmm.

Valerie Sorensen-Clark (25:47.089)

And then the merchandise moves through, but then CBP has some time to take a look at it. And then they’ll decide, you paid too much, you paid too little, you paid just the right amount. It’s a goldilocks, right? if you, so liquidation is, okay, here’s your final bill. This is what we think you actually owe. And more often than not, it’s just automatically liquidated. It’s auto liquidation. And it goes through and everything’s fine and you get it.

But if you need to get a bill, you’ll get like a lot of times people will get a bill like once a month, periodic monthly statement for all the duties that they owe and things like that. that’s what liquidation is. And one of the sticking points is,

So again, it’s really important and this is where I’ve tried to be very active since leaving because I’m trying to help people who are not lawyers and people who are not customs lawyers and lawyers who think they’re customs lawyers but they’re not customs lawyers. Try to understand. People are missing nuances that are really, really important.

In this situation, liquidation is by design, Congress only gave CBP the authority to reliquidate, which means basically reissue their final bill, right? In very limited circumstances. And that’s actually a good thing. That protects importers. So that CBP hypothetically can’t just say, you know, 10 years later, by the way, we actually think you owe more. So we’re going to reissue your bill.

They can’t do that. They can do it in very limited circumstances. That 90-day window, in case there was some error, that comes into play. That’s why you’ll see 80 days, anything that’s liquidated past 80 days. Because even if you did issue the final bill, they’re legally allowed to reliquidate those within that certain period of time. Congress said, okay, you can do this. Again, they can’t do anything that Congress didn’t say, you’re allowed to do this.

Valerie Sorensen-Clark (27:58.082)

And the other one is through protests, right? And even then it’s limited. And then the other method though, this is not congressionally granted, it’s court granted authority. And this is something that CBP has maintained not just in this case, but across multiple cases. I was also CBP counsel on the section 301 cases, the HMTX.

Andy Shiles (28:00.185)

Right. Right.

Valerie Sorensen-Clark (28:27.087)

So I was on that one from 2020 all the way up until almost the very end. I’m actually sad I didn’t quite carry it across the finish line. yeah, yeah, so I’m weirdly an expert on this sort of authority or the court to order reliquidation. And that gives the court, that gives CBP authority to reliquidate in certain circumstances. And CBP’s acknowledged that for a long time. I know, because I’ve heard it.

Andy Shiles (28:29.838)

Mm-hmm.

Andy Shiles (28:36.92)

Finished that, yeah.

Valerie Sorensen-Clark (28:57.719)

the court violence on it. you know, so the court can order CBP to reissue the bill, right, with a refund. But they can’t just do it on their own. So that’s part of the problem.

that make sense?

Andy Shiles (29:16.086)

All right. Well, with that, let me I’m gonna give a layman wa way of providing this is that and Lalo and I have talked about this before and I’ve used this example before, is that when you’re filing an entry, whether you do it yourself, which you can do under your own provision, or you have a customs broker do it, which is what most people do,

when an entry is filed, it’s filed on your behalf, you’re making a declaration to the government. And in that process, it would be, and here’s where a lot of for our layman term folks, this would be like you’re filing an IRS

income tax return, you know, let’s say every day or every week, and it goes in and for what you’ve earned for that time period, you’re making a declaration to the IRS or to the government, if you will. And so as it goes through that process, is that then your this liquidation is saying government side of it says, you know what? You’ve called this a widget. It is the duty rate is, you know,

Valerie Sorensen-Clark (30:00.538)

Yeah.

Andy Shiles (30:29.036)

whatever it is duty free or five percent or two percent or whatever it is and the harmonized tariff numbers there and the values there and all that and and basically when you make that declaration the liquidation is basically saying we agree with your assessment on this entry there you go and and then it’s finished out. That doesn’t mean to say you may not be audited later on. It you can get audited where the the

Valerie Sorensen-Clark (30:53.973)

Exactly.

Andy Shiles (30:58.018)

They’ll come in and say, Now, you know, you’ve done these entries, they were liquidated. Now we’re here to actually get into the details to say, Did you, you know, prove that you actually, you know, these are the things, these are still a widget, it’s still that value, it’s whatever. But that’s a side issue there. As we’re going through though, and accepting if with the liquidation now,

Valerie Sorensen-Clark (31:18.371)

And they can only do that in limited circumstances, just trying to clarify like that after it’s liquidated, looking under the hood, yeah. Which is good for importers.

Andy Shiles (31:26.124)

yeah. Well and and and to that point, I guess that’s where I’m I’m looking at it is there’s always an exception. It’s like, yeah, here’s where the majority of the stuff goes.

But and that butt’s bigger in Dallas is like here’s an exception. It’s like it’s you know, it’s like, all right, in this case and that we know there’s so many different little exceptions, but it’s not for everything. So it’s like, okay, understand that. And with this process though, I think it’s a good segue into all right, so we understand we got entries, they’re liquidated or they’re not liquidated and and as far as the process.

What do you suggest your importers do to get themselves organized to come to a a law firm like yourself or a customs broker or something like that to say, I’ve got questions. I think I’ve got money that’s I’m due or refund, or do I or whatever? What what what kind of information or what kind of questions should do you advise for somebody to go to to get counsel or advice?

Valerie Sorensen-Clark (32:30.159)

Yeah, so I guess this is where I can say, you know, I’m speaking on my own behalf and not necessarily reflecting my entire firm. But and also I’m not I’m going to be careful to not give legal advice. But you normally my advice would be call your customs lawyer. But, you know, I think it’s important to understand this the universe of your entries. I also think like so what what

Andy Shiles (32:51.63)

Mm-hmm.

Valerie Sorensen-Clark (32:58.799)

what are the different entries that you have that were you paid out your duties? Did you have, are they, they, are they liquidated? Are they unliquidated? If they’re unliquidated are, do any of them have those flagged issues where the operational capability to process them does not exist yet? If it does pay attention to that. They gave some really good guidance about reconciliation, you know, if it is an 09 or whatnot and, and about, you know, if, the period, you know, for

finally reconciliation is coming up to prioritize that over your CAVE claim. So there’s practical concerns. look at the CSMS messages, which is the customs. my goodness, the commercial messaging. Yeah, I don’t know. can’t remember the acronym right.

Andy Shiles (33:48.546)

Yeah, w it’s basically an electronic messaging from the from the custom system is yeah.

Valerie Sorensen-Clark (33:51.427)

Yeah, yes, sign up for those alerts. They’re really helpful. And yeah, and so pay attention to all that. you know, just have your have your the scope of what you paid IEEPA duties on ready to go. And if you filed an I case, it’s the IT. That’s another thing. So that is coming as well. And the court recently issued some interesting cloak and dagger type of

directions. I thought it read like a ransom note, you know, it’s like, have to, the court will send you something on paper and then you have to like, send a certified mail envelope back, probably for security reasons, but it was just very, it’s like, you know, do not call the police, leave the money in the oak tree. Like, was very funny. was like, what is this? But I’m sure they have their, but, but it’s basically, you know, the government was saying,

for a couple of weeks now to make sure that you have your importer record numbers ready for your lawsuits. Because in an I case, it’s not like if you’re filing an A case, is if you’re filing a lawsuit on a decision where CBP denied a protest, right? They don’t have the same kind of information at the court, or the CBP doesn’t have access to the same information.

They don’t have the importer of record number. And it’s not always just your EIN. Like somebody asked me about that once and I was like, no, it can be lots of different things. I remember, you know, there are times where I’ve had to like reverse engineer and try to figure out what an IRR number might be from the plaintiff’s name. So like you have to really, you know, you have to provide that to CBP to make sure they know. Cause you can also have multiple IRR numbers on the same plaintiff cause you could be operating in different ways as well. So.

So feel like that’s kind of what’s happening right now. So make sure that you provide that information to your attorneys if you do have an eye case. Because the court has started asking for that, I believe. that CBP has said that it will, it should have the capability to cross those liquidated entries where CBP has issued the final bill. So they’ll have operational capability.

Valerie Sorensen-Clark (36:16.912)

And they’re recognizing, and they’ve said they’ve recognized the court’s legal authority to give them the legal permission to refund, to reliquidate those entries in this specific situation. But the government’s view was, you know, especially in light of CASA, because it’s an open question, there’s no dispute, disputes that the court can say, need to reliquidate.

like reissued a bill on these liquidated entries to give them a refund for every plaintiff before the court. Like nobody disputes that. Everybody agrees, like on all sides, that the court can do that. So, you know, that was one of the things that DOJ talked about in the June 9th hearings. Like we’re just waiting for the court to give orders that we know we can clearly follow.

And so the court has done that. issued, Judge Eaton issued the orders in all of the cases. It’s tremendous amount of work. Thanks, Judge Eaton. And so they’re legally ready to go. And now they’re just waiting for the operational green light. You know, that all the coding and the functionality is there to be able to process those. So that’s next. That second bucket of entries as far as the way the government’s looking at it, right?

And then the third bucket is the entries that are not in front of the court where the final bill was issued that are liquidated. Because that’s still an open legal question, especially in light of the Supreme Court’s decision. Like I have my thoughts, but I’m not going to share them here. I mean, the point is the court needs to decide. Yeah.

Andy Shiles (38:07.872)

Well, let me ask the it

Right. Well, but that’s that’s where that’s why it’s important for an importer that basically says, Okay, I’ve paid IEEPA re tariffs, and I I I need to go in and request that refund, which puts it in the block to say we’re we’re advising the government. So if to say I I need to get those back versus those

Of th those would be importers or entries. Those IEEPA duties were assessed, but those importers may not have asked for that refund. Is that what I’m under am I understanding that group correctly? And is like should they automatically be getting refunds back? Is that what we’re talking about here?

Valerie Sorensen-Clark (38:57.104)

Are you talking about the group that they never request? They weren’t able to request CAPE in time where they didn’t and then their entries liquidated and they did not file a lawsuit and they’re just hanging out? They’re just hanging out. Let that, there’s no other way. They’re just wait and see. I think, I know.

Andy Shiles (39:14.796)

Right. Right.

Valerie Sorensen-Clark (39:22.916)

I know every, I will also make this point. I know everybody, all of the lawyers that are involved in this process right now, like before the court, the legal aspects of the refund process, the DOJ attorneys, the CBP attorneys, the private sector attorney, and the judges. I know them all very well and I’ve known them for over a decade. And they are all, every single one of them is a person of incredible integrity. And I think people are trying

Andy Shiles (39:34.766)

Mm-hmm.

Valerie Sorensen-Clark (39:52.357)

to figure out how to make this work within the law. You know what I mean? you, I think part of the issue is people think that the government’s trying to drag its feet and I get why it looks like that. I get it, know, especially because the government can’t communicate. They’re so restricted on what they can say, which is why I’m glad I can give some clarity now, you know? But, you know, it’s,

Andy Shiles (39:58.638)

Awesome.

Andy Shiles (40:19.34)

Mm-hmm.

Valerie Sorensen-Clark (40:20.676)

I think everyone’s working on it and trying to figure out what to do, but the agency can’t do what it’s not legally allowed to do. So as long as there’s a legal question about it, that needs to be resolved before they can actually act because otherwise they’re breaking the law. And it seems like a nuance, but this is the world I lived in for a long time. The agency’s very careful about only doing what they’re legally allowed to do.

Which again, on the whole is a good thing in this situation. It’s annoying. like, can’t you just bend the rules? But you know, so it’s just it’s an open legal question. But I do think the court is trying to find a way. I don’t know what’s going on with class actions. They’re thinking about I mean, I have no idea what’s going on with that. But there’s the case that’s currently the one that’s the vehicle for refunds is one where they’re asking for a class action. I don’t know what that means.

I don’t think anybody knows what that means except maybe judging. But who knows? That could be a vehicle as to how to get people who are not, I don’t know. It could be a way to try to get more people that are in that third category covered. I don’t know. But we’ll see. But just wait and see. And the other point I would make as far as good due diligence to

Facilitate faster refunds. Obviously, make sure your ACH information is up to date. If the refund needs to go to someone other than the person who filed the entry, other than the importer of record, then you need to file a form 4811 and have that person be designated and that person or company, they need to have an ACH account. And you need to do that before you file in CAPE.

Andy Shiles (42:13.55)

Mm-hmm.

Valerie Sorensen-Clark (42:14.192)

do it after the fact for obvious processing reasons. then the other thing is, so think about this logically, right? The system is designed, it’s automated, right? So it’s going to be reading like, it’s assuming that you filed your entries correctly. And to be fair to all the customs brokers out there, what a bananas year and a half it has been.

Andy Shiles (42:38.722)

Yes.

Valerie Sorensen-Clark (42:41.55)

Right. And I mean, the fact that they had to expand ACE to include even more lines because with all the stacking and the unstacking with AEPA and, you know, because they just had to fit more information on them than they ever had before. So there was guidance, but it was extremely confusing. So a lot of people didn’t do it the way that they were supposed to, quote unquote, even though it might not have been very clear. And so if the system’s designed to read

you do you have section 232 duties out on this or do you have or you excluded from these or whatever, right? You know, and like the 18 different kinds of IEEPA or whatever, like if you didn’t enter it correctly, the system’s not gonna read it, right? And so you might end up with like a bill or a rejection or, you know, so just do your due diligence. And I know that speed is paramount, you know, when you’re processing these as a broker or

Lalo (43:19.44)

Yeah.

Valerie Sorensen-Clark (43:41.777)

an expediter or whatever. So people are like pushing it through because I have to, but it would be, you know, it’s helpful to go back through that. And if you get an error or rejection or a huge bill, the best advice is to look at the entries involved and then look at the instructions that were issued for those things. did you follow it?

Andy Shiles (44:02.946)

Well, and that’s that’s the thing you said.

Right. Well, and it’s a it’s again, it’s a pretty simple process to do the initial request for a refund w once you’ve got all your information. But that’s where I would g I guess look at is that if you then get a rejection or

different bill or something like that’s when you would escalate up and go, Okay, I need to get an attorney involved in this and look at it or with my broker and the attorney and figure out do we file a protest, do we appeal it? Do what what what do we do? And that would be your options on the the exceptions there. So with that, I guess any closing thoughts here on as far as trying to be organized with this or or

Valerie Sorensen-Clark (44:41.658)

Yeah. Yeah.

Andy Shiles (44:55.906)

what people should expect, I guess, over the next few months. You were talking about that I guess we’re waiting on a decision from the CIT on that court case, right?

Valerie Sorensen-Clark (45:05.52)

Well, the CIT, they kind of addressed it in a court filing, but that’s what the government appealed. That’s why everyone was freaking out. They’re like, this going to affect my CAPE refund? It’s like, no, CAPE right at that time was only on the unliquidated entries. This has nothing to do with that. You don’t need the court to intervene for those. Just slow your roll. Calm down. Everything’s fine. They appealed on that third category only.

Andy Shiles (45:32.514)

Mm-hmm.

Valerie Sorensen-Clark (45:34.394)

And that is now at the Court of Appeals. I don’t know, I haven’t heard anything about what’s going on with that in a bit. So that is going to have to make its way. So if you want to talk about your options, call a customs attorney, any customs attorney, hopefully a good one. And just to talk about what your options are. And most attorneys, will give, you’re not a client, they will give a free

They give a free consultation just to see if they can even help you. So it’s worth it just to do that. then you can assess what your options are, what you can afford, what makes sense for you practically speaking. So as far as what we can see on the horizon, that third category is going to take a little bit longer to sort out. But as far as unliquidated entries, we can expect that CBP is still working on

building out that functionality for the other things that it was too tricky to do before. I do not know what’s going to be going on with informal entries because those are ones where it’s immediate. And then international mail, The person abroad paid those duties and then it all goes to the, say it’s like La Poste in France, right? And then La Poste, once a month will give those to customs and they’re not like, but this was sent from, know, John.

You got to figure out what to do with those. There’s so many open, again, unprecedented situations that everyone’s been put in. So, and I will say that the people who are designing CAPE are working super hard. And most of them were working seven days a week while not getting paid because people forgot there was a Homeland Security shutdown for being short of that time.

Andy Shiles (47:24.098)

Yeah, the government shut down. I I gotta tell you that the the folks involved in in C V P first off, the teams that are in it and I think it w warrants you make a a good point, Val Valerie, excuse me, is that folks involved but it it’s there’s some great folks in C B P and you know

Valerie Sorensen-Clark (47:34.44)

either way, I go with either, it’s fine.

Andy Shiles (47:45.697)

folks would you know are easy to criticize customs at times on some of this and I gotta tell you, they were working as hard and trying to figure it out as they went along. And yeah, there was some confusing messaging. But you know what? The dedication, the passion of the folks at C B P it’s just phenomenal. a great, great group of people. there’s a lot of folks now that have retired or

Valerie Sorensen-Clark (48:11.813)

Yeah.

Which is unfortunate. Yeah.

Andy Shiles (48:15.307)

have moved on to the private sector. There’s new folks coming in. It is. But that means that trade us

Valerie Sorensen-Clark (48:19.195)

But it’s important to separate any administration from the civil servants on the front line. You have to think about it differently. It’s easy to complain, and I totally understand why. But most of these people are just trying to do their job. Yeah.

Andy Shiles (48:29.23)

Mm-hmm.

Andy Shiles (48:34.348)

Yeah. Well, I I get it. And and they’re just trying to do their job and unfortunately I think they were being held hostage in in a sense of of the deal, whether, you know, politically and all that to me, I mean, shutting down the government costs more than it it saves and and and all that political posturing is like from a personal standpoint I think that

Valerie Sorensen-Clark (48:48.286)

my gosh.

Andy Shiles (48:57.632)

Anytime there’s a s a shutdown, not only the elected representatives should their freight pay be frozen, but also the staffers. That would move it quickly. So you know.

Valerie Sorensen-Clark (49:06.385)

I agree, actually.

Andy Shiles (49:12.494)

So anyway, well Valerie, listen, thank you so much. Again, folks, if you’ve got some questions, the first thing to do on this, if you think that and we’re talking significant dollars here on some of this. you know, I I I know of somebody that only had like three imports and we’re talking like twelve to fifteen thousand dollars that they had on the table, didn’t realize it.

so I mean when you’re talking even more than that, and and all that, you CFOs, or or or CEOs, you you want to look at this. This would be going to your bottom line ’cause that’s hitting your cash flow. That would be a nice shot in the arm. So go to your customs brokers. You have other questions. Go ahead.

Valerie Sorensen-Clark (49:49.362)

Yeah. It’s crazy how tariffs have become a, you know, a sweet issue now. It’s not like a backend thing. It’s now it’s people need to start companies need to start paying attention to it, not just the big ones, but everybody. And, and for those who lay people who might not understand what we’re talking about, I think the terrorists,

Pretty sure everybody does, but if you want to visualize President Trump with that poster board with the tariffs, that’s in the realm of what we’re talking about here. Do you have any other questions or anything you want clarified? It’s very technical stuff, all this legal stuff. I tried to simplify it for non-lawyers.

Andy Shiles (50:27.437)

Mm-hmm.

Andy Shiles (50:33.9)

Well, I think for Yeah.

No, I appreciate it. It’s it’s that’s that’s where I was going is that you know, as far as the next step action, again, go to your customs broker, get your list of entries. A broker should be able to get that for you, get your ACE account going and you can look at that. And then if there’s in more questions on that, you start getting into the legal counsel if you start need having questions on the interpretation of the law or different things like that.

And go through that process. And then especially if you are receive any kind of a reject or something like that, that’s when you start needing, you know, legal counsel to say, What are my options? What do I need to do? And you go from there. especially if customs comes back and says, You know what, we don’t agree with your assessment and they wanna

change it and issue a CF twenty eight or twenty-nine. A CF twenty-eight is a is a customs from co from cus a le an actual question documented from customs saying what are you looking at is value, classification, whatever they’re doing. A CF twenty nine means and by the way that CF means customs form. CF twenty-nine is they actually took action in the entry process.

Valerie Sorensen-Clark (51:29.477)

Valerie Sorensen-Clark (51:48.144)

Mm-hmm.

Andy Shiles (51:56.791)

You still have options that you can do to try and, you know, answer that, but you don’t want to just willy-nilly not answer or answer it flippantly. You need to make sure that is a declaration to the government. So I’m telling you, they’ve questioned your declaration on the entry, you’ve got to respond, you need to do it properly.

Valerie Sorensen-Clark (52:02.329)

yeah.

Valerie Sorensen-Clark (52:09.403)

Yeah.

Valerie Sorensen-Clark (52:14.705)

Yeah, that’s when you call that’s when you call customs lawyer immediately because you have a very short window to respond to that. And that is it’s it’s an R request for information. The CF 28s and yeah, a small window to answer. And if you don’t answer, then they will just assume the worst, you know, and then you’ll get that CF 29. you’re going to the thing I don’t know about you guys, but have you heard about people seeing a ton of like a really big increase in CF 28s lately? Because I that’s what I’ve been hearing, like like a huge increase in the last couple of months.

Andy Shiles (52:33.794)

Yeah, they’re right and you’re wrong.

Andy Shiles (52:49.868)

Well, there’s a lot of action going on. Yeah, to your point, I think there’s been questions raised in a lot of ports where they’re questioning not only I guess how people are are classifying and declaring their goods, but there’s also even parties to the transaction and things of that nature. So it’s like they’re really digging in to say what you’re declaring this, what’s going on? So

Valerie Sorensen-Clark (53:14.831)

Yeah. I would suspect there’s, I’m sure everyone’s using AI, like on both ends to try to like figure out data and what’s going on and stuff. So it’s like, I think it’s it’s a good assumption that, you know, you can’t hide things anymore. Not that you should, but now you you now can’t. So.

Andy Shiles (53:36.354)

No. Well, whatever you say, the customs will even just Google it and say, Yeah, is this you know, is there a brick and mortar? Is there something right here or wrong, whatever? But well, Valerie, listen, we need to wrap this up, but thank you so much for being on the show. This has been excellent. We’re gonna have Valerie’s contact information on on our show notes. So if there’s any questions, I can reach out to you and go from there. Folks, like us, share us again, subscribe. Thank you so much.

Valerie Sorensen-Clark (53:39.771)

Ha ha ha!

Yeah. Yeah.

Valerie Sorensen-Clark (53:58.161)

Okay, thanks. I don’t know if that’s a good thing or a bad thing.

Andy Shiles (54:06.368)

Yeah, you betcha. And with that, we hope everybody has a great day. Thanks, Valerie.

Valerie Sorensen-Clark (54:09.424)

Thank you. Have a good one.