MediCube Outdoor Advertisement in Times Square, New York, U.S. / Provided by APR

APR, the company behind the leading K-Beauty brand Mediheal, is preparing to apply for duty refunds as the U.S. Customs and Border Protection (CBP) launches its new mutual duty refund system.

On Thursday, customs authorities announced that the CBP will initiate the first phase of its Comprehensive Automated Processing for Refunds (CAPE) service on April 20. This new system will streamline the refund process for mutual duties and related tariffs.

This action follows a February ruling by the U.S. Supreme Court, which declared the Trump administration's mutual duties illegal and invalid. Subsequently, the U.S. Court of International Trade (CIT) ordered the implementation of refund procedures for all importers.

The initial phase of refunds will be limited to recent import declarations where duties haven't been finalized or where less than 80 days have passed since clearance. Cases involving post-clearance adjustments for anti-dumping and countervailing duties, as well as amounts already transferred to Treasury accounts, will be reviewed in later stages. Companies can submit eligible import declaration numbers through the CAPE portal, with the CBP typically processing refunds and interest within 60 to 90 days.

It's worth noting that semiconductors and electronic devices, which were previously exempt from mutual duties, are not eligible for refunds. Items subject to Section 232 of the Trade Expansion Act, such as automobiles, auto parts, steel, and aluminum, are also excluded.

However, industry experts suggest that certain Korean export categories may be eligible for refunds. These include clothing, textiles, fashion items, cosmetics, beauty products, some construction materials, and steel-derived products like refrigerators and washing machines, provided they don't meet the Section 232 content thresholds.

APR and D'Alba Global are among the K-Beauty companies expected to benefit from this development. An APR spokesperson confirmed that the company is preparing the necessary documentation to apply for duty refunds under the CAPE process.

The APR representative stated that they're currently working through the required internal procedures for duty refunds. It plans to initiate the refund process in stages, aligning with the upcoming system maintenance schedule. This relates to certain cost settlements and reporting details arising from our U.S. subsidiary's imports from the Korean entity.

The spokesperson requested understanding regarding the confidentiality of specific refund amounts and scale.

APR has been expanding its global reach through online platforms, achieving record-breaking performance last year.

The company's 2022 revenue soared to approximately 1.5 trillion KRW (about 1 billion USD), a 111% increase from the previous year. Operating profit jumped to 365.4 billion KRW (around 247 million USD), up 198%. Analysts attribute this success to APR's high-value strategy of combining cosmetics with beauty devices, which has resonated strongly with international consumers.

According to CBP documents submitted to the court, duty payments based on the International Emergency Economic Powers Act (IEEPA) were estimated at about 166 billion USD as of early last month. The full implementation of mutual duty refunds could significantly impact the profitability and cash flow of global consumer goods companies, particularly those in the K-Beauty sector.

APR, the company behind the leading K-Beauty brand Mediheal, is preparing to apply for dut …

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