You’ve evaluated the numbers. You’ve weighed the government filing path against immediate capital. You’ve decided — for some or all of your IEEPA entries — to sell your claim for upfront payment. The offer terms are agreed, and you’re ready to move forward.
Now what?
The period between accepting an offer and receiving payment is typically 14-21 business days. It’s a structured process with defined steps, and understanding what happens at each stage removes the anxiety that comes with handing over a valuable asset. Here’s the complete walkthrough.
Step 1: The Claim Assignment Agreement (Days 1-3)
The claim assignment agreement is the core legal document in the transaction. It transfers your right to receive the IEEPA tariff refund from CBP to the purchaser.
What the Agreement Covers
- Identification of claims being assigned — specific entry numbers, duty amounts, and dates
- Purchase price — the amount the buyer will pay you, expressed as a dollar amount and/or percentage of face value
- Representations and warranties — you confirm you’re the rightful claimant, the claims are valid, and you haven’t assigned them to anyone else
- Assignment of rights — the legal transfer of your right to receive the government refund
- Payment terms — when and how you’ll be paid
- Conditions to closing — what needs to happen before the deal closes (typically due diligence completion)
- Non-recourse provisions — confirmation that the buyer assumes all risk of collection from the government
Key Terms to Understand
Non-recourse. This is critical. A properly structured claim sale is non-recourse, meaning the buyer assumes all risk that the government may delay, partially deny, or contest the refund. Once you receive payment, you have no obligation to return it regardless of what happens with the government claim. If a buyer proposes recourse terms — where you’d have to return money if the government doesn’t pay — that’s a fundamentally different and less favorable deal.
Scope of assignment. Make sure the agreement precisely identifies which entries are included. If you’re using a split strategy — selling some entries while filing government claims on others — the boundaries must be clear. Entries not included in the assignment remain yours.
Representations. You’ll be asked to represent that the data you’ve provided is accurate and complete, that you’re authorized to sell the claims, and that no other party has a prior claim. These are standard commercial representations, but make sure they’re accurate — misrepresentation could create liability even in a non-recourse deal.
Legal Review
Have your attorney review the assignment agreement before signing. This is not optional for transactions above $100,000. A trade attorney is ideal, but any business litigation attorney can review the core terms. Key items for legal review:
- Non-recourse language is genuinely non-recourse
- Assignment scope matches your intent
- Payment terms are clear and enforceable
- Representations are accurate and limited to what you can confirm
- No hidden conditions or contingencies
- Governing law and dispute resolution provisions
Step 2: Due Diligence (Days 3-10)
After the agreement is signed (or sometimes concurrently), the buyer conducts due diligence on your claims. This is the buyer’s opportunity to verify that the claims are real, properly documented, and likely to be collected from CBP.
What the Buyer Verifies
| Verification Item | Source | What They’re Checking |
|---|---|---|
| Entry existence and validity | ACE data / ES-003 report | Entries exist and are filed correctly |
| IEEPA duty amounts | Entry summaries / HTS codes | Duty amounts match claimed values |
| Liquidation status | ACE data | Entry statuses are as represented |
| No prior assignment | Your representation + public records | Claims haven’t been sold to someone else |
| Filing viability | Recovery path analysis | Claims are recoverable through available paths |
| Documentation completeness | Your data package | Supporting documents are sufficient |
What’s Expected of You During Due Diligence
Be responsive. The buyer’s due diligence team will have questions. Some will be clarifications on data you’ve already provided; others may require additional documentation. Quick responses keep the process on track.
Provide authorized access. If the buyer needs to verify data directly with your customs broker, you’ll need to provide written authorization for that communication. Have this ready in advance.
Don’t take questions personally. Due diligence questions are not accusations. The buyer is spending significant capital on your claims and needs to verify everything. This is professional practice, not distrust.
Common Due Diligence Issues
Entry amount discrepancies. Sometimes the IEEPA duty amount you calculated doesn’t match what ACE shows. This is usually a data extraction issue — perhaps non-IEEPA duties were included, or some IEEPA entries were missed. The buyer will work with you to reconcile, and the purchase price may adjust up or down based on verified amounts.
Missing entries. Occasionally, entries you thought were included turn out to have already been addressed through Post-Summary Corrections or aren’t actually in the IEEPA period. The scope of the assignment adjusts accordingly.
Documentation gaps. If certain entries lack sufficient documentation, the buyer may exclude them from the purchase (reducing the total price) or accept them at a lower valuation reflecting the additional risk.
Due diligence typically completes within 5-7 business days for straightforward portfolios. Complex portfolios with multiple brokers, mixed entry types, or documentation issues may take 7-14 business days.
Step 3: Final Closing (Days 10-15)
Once due diligence is complete, the transaction moves to closing.
Closing Documents
You’ll execute (or confirm) the following documents:
- Final claim assignment agreement (if adjustments were made during due diligence)
- Assignment notices — documents that formally notify CBP and your customs broker that the claims have been transferred
- Power of attorney — authorizing the buyer (or their representative) to pursue the claims with CBP on the assigned entries
- Closing certificate — confirming that all conditions have been met
CBP Notification
The buyer will prepare and file notifications with CBP advising that the refund rights on the specified entries have been assigned. This is a standard process under customs law — claim assignment is an established mechanism in trade, not something novel to the IEEPA situation.
Your customs broker will also receive notification so they know that future communications about the assigned entries should go to the buyer’s representatives, not to you.
What You Sign vs. What the Buyer Handles
| Action | Who Handles It |
|---|---|
| Signing the assignment agreement | You |
| Due diligence verification | Buyer |
| CBP notification filing | Buyer |
| Broker notification | Buyer (with your authorization) |
| CAPE filing for assigned entries | Buyer |
| Government refund collection | Buyer |
| Payment to you | Buyer |
Your active involvement effectively ends at closing. Everything after that is the buyer’s responsibility.
Step 4: Payment (Days 14-21)
Payment terms are specified in the assignment agreement. Standard terms are wire transfer within 3-5 business days of closing.
Payment Mechanics
Wire transfer is the standard payment method for claim purchases above $50,000. You’ll provide banking details (account number, routing number, bank name) as part of the closing process. Payments are typically made from the buyer’s escrow or operating account.
For smaller transactions (under $50,000), ACH transfer or certified check may be used, depending on the buyer’s standard practice.
Multiple payments. If the agreement includes a holdback — for example, 90% at closing and 10% upon CBP confirmation of the assignment — you’ll receive payments on a defined schedule. Holdbacks are less common in well-documented portfolios but may apply to more complex situations.
Tax Considerations
The claim sale has tax implications that you should discuss with your accountant before closing. Key considerations:
- Recognition of income or loss. The difference between what you originally paid in IEEPA duties (and previously deducted as a business expense) and what you receive from the claim sale may be taxable income or a deductible loss.
- Timing. The sale occurs in the tax year you receive payment, not when the original duties were paid.
- Form 1099. The buyer may issue a 1099 for the payment, depending on the amount and structure.
Get tax advice specific to your situation before closing. The CFO guide to IEEPA recovery covers financial statement treatment in more detail.
Step 5: After Payment — What Changes and What Doesn’t
What Changes
Assigned entries are no longer yours. The buyer now owns the right to receive the government refund on those entries. You should not file PSCs, protests, or CAPE declarations on assigned entries — that’s the buyer’s responsibility.
Your broker coordination shifts. For assigned entries, your broker will coordinate with the buyer’s team, not with you. For any entries you retained (if you used a split strategy), your broker relationship continues as normal.
CBP communications change. Any CBP correspondence regarding assigned entries will be directed to the buyer or their representative.
What Doesn’t Change
Retained entries are unaffected. If you kept some entries for government filing, those remain entirely in your control. The claim sale doesn’t affect entries that weren’t included in the assignment.
Your broker relationship continues. You’re not changing customs brokers. Your broker continues to handle your ongoing import business and any retained IEEPA entries.
Your operations are unaffected. The claim sale is a financial transaction — it doesn’t change your import licenses, classification history, customs bonds, or any other aspect of your business.
Your other recovery activities continue. If you have entries being processed through CAPE, protests pending with CBP, or CIT litigation underway on other entries, none of that is affected by the claim sale on the assigned entries.
The Split Strategy in Practice
Most mid-market importers don’t sell their entire portfolio. They split between government filing and immediate capital based on entry characteristics.
How the Split Works Post-Sale
After closing a partial claim sale:
- Sold entries: Buyer manages recovery. You’ve received payment. Done.
- PSC-eligible entries: Your broker files corrections. You receive full refund + interest when CBP processes.
- Protest-filed entries: Protests proceed through CBP / CAPE. You receive full refund + interest when processed.
- CIT entries: Your trade attorney continues litigation. You receive judgment amount minus legal fees when resolved.
The split strategy typically maximizes total recovery while providing near-term liquidity through the sold portion. The Impact Assessment models this split for your specific portfolio.
Working With Your Accountant: Financial Statement Treatment
The claim sale creates specific accounting entries that your controller or accountant needs to handle properly.
Recognition of the Transaction
The claim sale is recognized in the period the transaction closes. The journal entry typically looks like:
Debit: Cash (amount received from claim sale) Debit: Loss on claim sale (if the sale price is less than the carrying value of the receivable) Credit: IEEPA refund receivable (if previously recorded) OR Credit: Other income (if no receivable was previously recorded)
If you had not previously recorded an IEEPA receivable on your balance sheet, the full claim sale amount is income in the current period. If you had recorded a receivable at full face value, the difference between face value and sale price is a loss.
Impact on Financial Ratios
The claim sale affects several financial ratios:
- Current ratio improves (cash increases, which is a current asset)
- Debt-to-equity may improve if proceeds are used for debt reduction
- Earnings are affected by the income or loss recognition
- Working capital increases immediately
If you have debt covenants tied to specific financial ratios, model the impact of the claim sale before closing to ensure compliance. The CFO guide to IEEPA recovery provides additional financial statement guidance.
Audit Considerations
If the claim sale occurs near a reporting period end, your auditor will want to see the assignment agreement, payment confirmation, and supporting documentation. Keep these organized and accessible for audit purposes.
Common Concerns and Answers
”What if the buyer doesn’t collect from CBP?”
Not your problem. The deal is non-recourse. Once you receive payment, the buyer bears all collection risk. If CBP takes three years to process the refund, or partially denies it, or requires CIT litigation — that’s all on the buyer.
”What if CBP needs information from me after the sale?”
Possible but rare. The assignment agreement typically includes a cooperation clause requiring you to reasonably assist the buyer with information requests related to the assigned entries. This might mean answering a question about an entry or providing a document from your files. It doesn’t mean you’re doing the buyer’s work — it’s limited, reasonable cooperation.
”Can I change my mind after signing?”
Generally no. The assignment agreement is a binding contract. Some agreements include a short rescission period (24-72 hours), but once closing occurs and payment is made, the transaction is final. Make sure you’re committed before signing.
”Will this affect my future import operations?”
No. Selling IEEPA refund claims has zero impact on your customs bond, broker relationships, import licenses, or standing with CBP. It’s a financial transaction related to duties that were unconstitutionally collected — not an adverse action of any kind.
”What if I discover additional IEEPA entries after the sale?”
Entries not included in the assignment belong to you. If you discover additional qualifying entries, you can pursue recovery through any available path — government filing, another claim sale, or any other option. The assignment only covers the specific entries identified in the agreement.
Choosing the Right Buyer: Key Factors
Not all claim purchasers are the same. If you haven’t yet selected a buyer, here’s what differentiates them.
Financial Capacity
The buyer needs sufficient capital to fund your purchase. For large portfolios ($1M+), verify that the buyer has committed capital or an established credit facility. Ask for proof of funds or a letter from their funding source. A buyer who can’t close because they’re fundraising wastes your time.
Processing Expertise
The buyer takes over responsibility for collecting from CBP. Buyers with customs expertise — staff who understand CAPE filing, protest procedures, and CIT litigation — will manage the collection more efficiently. Ask about their collection team’s background and capabilities.
Transaction Speed
Some buyers can close in 14 business days; others take 30+. If speed matters, ask for a specific closing timeline and build it into the agreement as a closing condition. The fastest buyers have standardized documentation, experienced due diligence teams, and pre-committed capital.
Reputation and References
Ask for references from importers who’ve completed transactions. The claim purchase market is still young, but established buyers should have multiple completed transactions they can reference. Verify independently if possible.
For a comprehensive evaluation framework, see our guide on evaluating recovery firm offers — the principles apply equally to claim purchasers.
Timeline Summary
| Phase | Duration | Running Total |
|---|---|---|
| Assessment and decision | 3-5 weeks | Weeks 1-5 |
| Agreement execution | 1-3 days | Week 5-6 |
| Due diligence | 5-14 days | Weeks 6-8 |
| Closing | 1-3 days | Weeks 7-9 |
| Payment | 3-5 days | Weeks 7-10 |
Total from first contact to payment: approximately 6-10 weeks.
Compare that to the government filing timeline of 3-36 months, and you see why immediate capital appeals to importers who value certainty and speed.
Get your free Impact Assessment →
The assessment shows you exactly which entries are candidates for immediate capital, what offer range to expect, and how the claim sale fits into your broader recovery strategy. Start with the data, then make the decision. Request your free assessment today and have a clear picture of your options within days.
