Month: March 2026

The Iran Conflict Update: Global Shipping, Sanctions, and Governmental Relief

By Hannah F. Atkinson

Continued monitoring of the evolving conflict in the Middle East remains imperative for businesses. Since last week and our previous article, the scale of disruption has increased, especially for those in the supply chain, as three cargo ships were hit as recently as March 11^th. As early as this morning, Iran’s new supreme leader issued a statement that the country would continue to block the Strait of Hormuz. This update outlines the latest impacts on global shipping operations, the shifting sanctions landscape, and the limited relief measures the U.S. government has announced to date.

1. Maritime Rerouting & Energy-Related Surcharges

One expert estimates that rerouting shipments around the Cape of Good Hope can add 10-14 days to the trip and about $1 million extra in fuel per ship. Several vessel-operating common carriers, including CMA CGM & Maersk, have announced the intent to reroute shipments around the Cape.

Around a fifth of the world’s oil travels through the Strait of Hormuz. This morning, the IEA published its March 2026 Oil Market Report and stated that this war has caused “the largest supply disruption in the history of the global oil market.” Earlier this week, Maersk implemented an Emergency Bunker Surcharge to account for the global fuel disruptions. This surcharge will start on March 25^th—subject to Federal Maritime Commission’s approval—and may increase or decrease every 14 days. Hapag-Lloyd and MSC also announced similar surcharges.

Any change to a tariff by a common carrier requires at least 30 days between its publication and effective date, unless the Commission approves a special permission request to reduce this waiting period. Shippers may see surchargers quicker if the Commission grants special permission. But as recently as March 11, the Commission affirmed its commitment that “that rates, charges, and rules that common carriers have implemented as a result of commercial shipping in the Strait and neighboring waters do not violate the Shipping Act.”

Even with regulatory delays for new surcharges, businesses in the supply chain should consider examining their contracts, considering:

• Force majeure provisions that with prior notice, could excuse performance or allow rerouting of shipments: some companies have already started to declare force majeure on cargos; and
• Terms that speak to tariff responsibility, delay risk, and cost increases—keeping in mind the FMC’s regulations and its recent statement.

Companies should review these provisions closely, as their applicability will depend on each contract’s specific language.

 

2. Evolving Sanctions Require Diligence

As recently as late February, the Office of Foreign Assets Control (OFAC) sanctioned over 30 individuals, entities, and vessels as a part of “Treasury’s ongoing campaign of maximum pressure on Iran.” As the conflict in Iran continues, OFAC may impose more sanctions and businesses will have to remain vigilant during screening, as the Specially Designated Nationals (SDNs) list expands and contracts.

Generally, OFAC regulations prohibit all transactions or dealings by U.S. persons that involve any property or interests in property of sanctioned persons. OFAC violations can carry significant civil penalties and operate under a strict liability basis, so companies should take care in screening and seek guidance as Iran sanctions continue to evolve.

3. Limited Relief from the Government

U.S. International Development Finance Corporation (DFC) said it “will offer support to commercial shipping charterers, shipowners, and key maritime insurance providers to minimize market disruptions and help ensure the free flow of goods and capital.” As many in the transportation sector already know, war risk insurance premiums have surged by almost 300%. While the DFC has not released many details about its “Maritime Reinsurance” product, it has specified in two press releases that its $20 billion insurance “offering will apply only to vessels that meet eligibility criteria,” and “will focus on Hull & Machinery and Cargo.” So far, no eligibility criteria have been shared with the public, so it remains to be seen who will benefit from this DFC’s product.

Earlier in the conflict, President Trump signaled that the U.S. Navy could provide relief to vessels by escorting them through the Strait of Hormuz. However, as of March 11^th, the U.S. Navy has not escorted any vessels during this conflict, and military officials have suggested there are no memorialized plans for escorts at this time. Therefore, it will take time for this possible escort relief to materialize, if at all.

The risks and benefits of these potential opportunities from the U.S. government are unclear; however, please contact us should you have any questions.

GKG Law, P.C., helped businesses during prior supply chain disruptions: COVID, port strikes, and the Red Sea attacks, and can help businesses analyze contracts, provide sanction guidance, and provide other support.

 

 

Judge Orders CBP to Report its Progress to Developing Refund Process by Thursday

By John H. Kester

The Court of International Trade (“CIT”) on Friday ordered that the government file a report on the progress Customs and Border Protection (“CBP”) has made toward developing a refund process for IEEPA duties, with interest, by 2PM EDT on Thursday, March 12. That Friday Order follows another Order (the “Reaccounting Order”) last week in same case, Atmus Filtration, Inc. v. United States, et al., which had required that:

1. for entries subject to IEEPA tariffs imposed by the Executive Orders considered by the Supreme Court in Learning Resources, Inc. v. Trump, that have not liquidated, CBP must liquidate those entries “without regard to” the IEEPA duties; and,

1. for entries subject to IEEPA tariffs imposed by such Executive Orders that have liquidated, but for which the liquidation is not final, CBP must reliquidate those entries, “without regard to” the IEEPA duties.

Senior Judge Richard Eaton’s Order was not limited to entries in the Atmus case, but rather applied to all entries described above. Notably, the above limitation to Executive Orders considered by SCOTUS in Learning was added in an Amended version of the Order on March 5. Although Learning resulted in a sweeping ruling that IEEPA did not authorize the President to tariff, the ruling did not reference, for example, the tariff imposed by Executive Order 14323 on Brazilian imports and other E.O.s, meaning Atmus has left importers affected by those tariffs in an uncertain position.

Moreover, although the Atmus Court ordered such reaccounting, it stopped short of requiring refunds, and even the reaccounting Order was suspended on Friday to caveat that the Court is not requiring immediate reaccounting. Also on Friday, a CBP representative filed a Declaration with the Court stating that CBP was incapable of immediate compliance, but that CBP was “confident” that it can make changes to its system to address removing the unlawful tariffs and was “making all possible efforts to have this new… functionality ready for use in 45 days.”

Even if CBP can accomplish those changes to its system within that 45-day period that does not mean refunds will occur within that timeline. Indeed, it is unclear whether CBP’s filing was merely describing how a refund process would work or whether it signaled that CBP was acquiescing to refunding the unlawfully collected tariffs.   As noted above, the government is required to file a progress report regarding how refunds would be handled by March 12.

Recent History of Atmus:

Wednesday, March 4:

The Hearing:

• In a hearing in Atmus, the Senior Judge made plain the Court’s overarching posture in favor of refund: “Right now I want to make it clear to the Customs Service that they have to refund any money that was unlawfully collected,” he said.
• The government appeared to be caught off-guard by the Court’s intention to take broad action, and requested from the Court more time to brief the merits of its case. “There aren’t any merits,” the Senior Judge said.
• Although the government asserted at the Wednesday hearing that entries would require manual review, the Senior Judge said, “we live in an age of computers….”
• The Senior Judge announced that he would require a conference Friday to discuss how refunds would be accomplished for “at least some of these entries.” He noted that all IEEPA cases were to be assigned to him personally and that he does not want to hear all of the cases filed.

The Order:

• Following the Hearing, the Judge issued an Order requiring reaccounting of entries with IEEPA duties imposed, which stopped short of explicitly requiring refund but which appeared to be an effort to start a refund process in some form.
• The Court took pains to assert that the Order would apply to all importers of record whose entries had IEEPA tariffs imposed, rather than merely to the Atmus “All importers of record whose entries were subject to IEEPA duties are entitled to the benefit of the Learning Resources decision,” it said.
• The Order did not state how entries whose liquidation is final would be treated.

Thursday, March 5:

              The Amended Order:

• The Senior Judge amended and superseded his Wednesday order to add language limiting the reaccounting to those IEEPA tariffs imposed by Executive Orders considered by the Supreme Court (“SCOTUS”) in Learning.
• Application of the Order only to Executive Orders considered by SCOTUS in that case means that the Order does not apply to some IEEPA tariffs including those imposed by certain Executive Orders related to Brazil, Cuba, Iran, Russia, and Venezuelan oil.

Friday, March 6:

              The Declaration:

• The government filed a Declaration by a CBP representative, which asserted there are numerous limitations in the Automated Commercial Environment (“ACE”), the Customs system that handles entries and associated duties, and that refund processing would take “4,431,161 man hours” (approximately 506 years) using the existing tools.
• It nonetheless stated that CBP would endeavor to have changes to the system ready in 45 days.

                      The Orders:

• In addition to the aforementioned Order setting a March 12 progress report deadline, and citing the aforementioned Declaration, the Court stated that the March 5 Order was “suspended to the extent that it directs immediate compliance.” Put differently, the reaccounting must take place, but on an indefinite timeline.

Next Steps for Importers:

The CIT’s posture in favor of refunding importers has never been clearer, and it appears that its desire is for such process to occur without requiring aggrieved importers to file complaints with the Court. However, the Friday conference in Atmus was private, and the government’s public posture independent of today’s Declaration has suggested it is not eager to facilitate an easy and immediate refund process.

It remains to be seen whether the government will appeal in Atmus, taking the refund issue to higher Court(s) in similar fashion to how the illegality of the tariffs was adjudicated. It also remains to be seen what process, if any, will be available to importers affected by IEEPA-based tariffs that SCOTUS did not consider in Learning, and importers whose liquidated entries are final.

Although there is reason to believe that the CIT favors refund without the need to file a complaint, at least for many IEEPA-implicated entries, there also is good reason to expect the government to resist. With that in mind, GKG Law’s position remains that the most conservative approach is to file a Complaint for refund before the CIT.

GKG Law’s IEEPA tariff litigation team, which includes me, Brendan Collins, and Oliver M. Krischik, has already filed numerous such complaints prior to the SCOTUS ruling, and is prepared to continue to do so swiftly in the days ahead.

Please contact us if you have any questions or are interested in filing such a Complaint.

John H. Kester is a Customs attorney with GKG Law. He additionally passed Customs and Border Protection’s rigorous Customs Broker License Exam and his application for a Customs Broker License is pending. He is reachable at jkester@gkglaw.com.

Brendan Collins and Oliver M. Krischik, Principals with GKG Law, additionally participated in the firm’s numerous filings in opposition to the Section 301 tariffs implemented by President Trump’s first administration. They are reachable at bcollins@gkglaw.com and okrischik@gkglaw.com respectively.

 

Federal Circuit Mandates Court of International Trade Take Action on Tariff Case

By John H. Kester

The U.S. Court of Appeals for the Federal Circuit in V.O.S. Selections, Inc. v. Trump on Monday issued a mandate returning the case to the Court of International Trade to take further action. The order denied a court filing made by the government on Friday, February 27, in which it argued that Court should not mandate that the CIT take such action, and in the alternative, that no such mandate be issued for four months.

The government had argued that the extended time period would “allow the political branches an opportunity to consider options,” suggesting Congressional action to usurp or supplement the judiciary’s role with regard to refunds. Its filing responded to a Motion by plaintiffs that had moved that the mandate be issued immediately, and which the government characterized as “ill-conceived.” The government further stated that plaintiffs had an “apparent desire to be the center of attention,” “a…bare desire to be paid immediately,” and that the hundreds of importers who have filed related claims for refund before the CIT were not reason to immediately issue the mandate. It stated also that “the IEEPA tariffs have been replaced by vigorous new tariffs.”

Plaintiffs had argued that the mandate would “facilitate the prompt and equitable disposition of both this case and the over 900 other suits challenging the tariffs that are currently pending before the CIT.” It emphasized that the government previously stipulated in the matter that it would issue refunds, with interest, provided SCOTUS ruled the tariffs unlawful, and that it had stated refunds also would be available to other aggrieved plaintiffs, outside the case.

“Plaintiffs’ entitlement to refunds is clear and… every day they are forced to operate without them inflicts harm on their businesses,” the Motion read. The Court appears to have agreed.

Brief Judicial History of V.O.S. Selections, Inc.:

Before V.O.S. Selections, Inc. advanced to the Supreme Court, plaintiffs in the case were victorious in the CIT, which ruled the tariffs unlawful. The Federal Circuit later affirmed the CIT’s decision that the tariffs were unlawful, but the CIT proceeding was stalled pending the mandate, which itself would not be issued until the Supreme Court ruled. On Friday, February 20, the Supreme Court ruled the tariffs were unlawful.

With a definitive SCOTUS ruling in hand, plaintiffs in the case filed separate Motions in both the Federal Circuit and the CIT, on Tuesday, February 24. In addition to the above-described Federal Circuit filing regarding the mandate, plaintiffs filing with the CIT sought that the CIT begin the refund process once they receive such mandate. The government’s response to plaintiff’s CIT filing is due Tuesday, March 17, and may give further indication regarding its posture as to refunds.

Next Steps for Importers:

The government’s latest filing builds on the statements of President Trump and Treasury Scott Bessent suggesting the Administration does not intend to facilitate an easy refund process with any immediacy. The Federal Circuit, however, has resisted government attempts to delay the Court process in the V.O.S. case.

With that in mind, GKG Law reiterates its December 2025 analysis that importers seeking the most conservative approach and greatest insurance of obtaining IEEPA tariff refunds would be prudent to file a claim for refund with the Court of International Trade before their entries’ liquidation, Customs and Border Protection’s (“CBP’s”) final computation or ascertainment of duties on entries for consumption, which typically occurs at or around 314 days after entry.

GKG Law’s IEEPA tariff litigation team, which includes me, Brendan Collins, and Oliver M. Krischik, has already filed numerous such complaints prior to the SCOTUS ruling, and is prepared to continue to do so swiftly in the days ahead.

Please contact us if you have any questions or are interested in filing such a Complaint.

John H. Kester is a Customs attorney with GKG Law. He additionally passed Customs and Border Protection’s rigorous Customs Broker License Exam and his application for a Customs Broker License is pending. He is reachable at jkester@gkglaw.com.

Brendan Collins and Oliver M. Krischik, Principals with GKG Law, additionally participated in the firm’s numerous filings in opposition to the Section 301 tariffs implemented by President Trump’s first administration. They are reachable at bcollins@gkglaw.com and okrischik@gkglaw.com respectively.

Carriers Impose Surcharges as Iran Conflict Disrupts Shipping Routes

 

By Oliver M. Krischik and John H. Kester

 

Over the course of the weekend, the U.S. and Israel launched strikes against Iran-related targets, and Iran responded by striking against U.S.- and Israel-related targets in the region. The armed conflict and ongoing military actions have unsurprisingly caused disruption to shipping routes as commercial vessels come under attack and ocean carriers respond to the situation.

 

Specifically, amid strikes in at least eleven countries: Iran, Israel, Bahrain, Cyprus, Iraq, Kuwait, Lebanon, Qatar, Saudi Arabia, Syria, and United Arab Emirates, at least five of the largest vessel-operating common carriers (“VOCCs”) have announced they have suspended nearby service and/or had imposed surcharges tied thereto.  While there is not much certainty with regard to the ongoing hostilities, it is possible that the hostilities may continue for several weeks or months.

 

Ocean carriers are responding differently to the situation at the present time, and the actions will have consequences for: (i) acceptance of new bookings; (ii) routing, delivery, and costs for shipments in transit; and (iii) pricing for new bookings.  As we saw with the Red Sea surcharges in late 2023 and early 2024, some ocean carrier actions may not be compliant with the Shipping Act of 1984 (as amended) and the Federal Maritime Commission’s (“FMC’s”) regulations.  Nonetheless, Ocean Transportation Intermediaries (“OTIs”) would be prudent to (a) monitor the actions taken as applicable to ongoing shipments; (b) inform customers of the ongoing situation and the OTI’s position in that regard; (c) take note of new surcharges and routing rules applicable to new bookings with various ocean carriers; and (d) take the additional tangible steps described in greater detail below (e.g., reviewing tariff and contractual force majeure pass-through language) in order to ensure they are not the party responsible for such charges.

 

Relevant Developments in the Region

 

Iran, according to the BBC, told ships not to transit the Strait of Hormuz, through which cargo passes between Oman and Iran and into the Persian Gulf. Iran said there were three U.S.- and U.K.-originating tankers “‘struck by missiles and…burning’” as of Sunday, according to the BBC. Some 150 tankers or more had dropped anchor in the Gulf, thereby avoiding movement through the Strait, BBC said. In addition to containerized cargo, roughly one-fifth of the world’s oil, and one-fifth of its liquified natural gas consumption traveled through the Strait in 2024, according to the U.S. Energy Information Administration.

 

Insurance prices for Gulf ships could surge by half, jumping from $250,000 to $375,000 for a $100 million ship, according to the Financial Times (“FT”). Costs already had ballooned in recent months as uncertainty in the region translated to skyrocketed war risk insurance rates and massively increased container spot rates. Insurers informed shipowners Saturday of their intent to cancel policies and raise prices, FT reported.

 

Summary of Ocean Carrier Announcements and Actions

 

While ocean carriers may continue to announce changes or revise their actions as the situation develops, the following includes some significant announcements from ocean carriers over the past several days:

 

• CMA CGM:
  • On Saturday, CMA CGM said, “[a]ll vessels inside Gulf, and bound to Gulf, have been instructed with immediate effect to proceed to shelter,” and that Suez service was suspended.
  • On Sunday, it announced an “Emergency Conflict Surcharge” of $2,000 per dry 20-foot container, $3,000 per dry 40-foot container, and $4,000 for reefers or special equipment. It said the surcharge applies to “cargo already afloat” as well as bookings Monday or later.
  • Also on Sunday it said it immediately would cease reefer bookings to or from “Iraq, Bahrain, Kuwait, Yemen, Qatar, Oman, United Arab Emirates, Kingdom of Saudi Arabia, Jordan, Egypt (Port of Ain Sokhna), Djibouti, Sudan and Eritrea.”
• Hapag-Lloyd:
  • Hapag-Lloyd on Sunday announced a “War Risk Surcharge” effective Monday, March 2, costing $1,500 per standard TEU, and $3,500 for reefers and special equipment. It said the charge would apply to goods already on the water in addition to new bookings Monday or later.
  • On Monday it announced “[a] Contingency Surcharge…for all sailings commencing on March 3 until further notice” in the same amounts. Also on Monday it highlighted “[o]perations may be affected” for shipments to or from the United Arab Emirates, Saudi Arabia, Kuwait, Qatar, Bahrain, Iraq, and Oman and said it had ceased bookings between “Mauritania, Senegal, Gambia, Guinee, Sierra Leone, Liberia, Ivory Coast, Ghana, Togo, Benin, Nigeria, Cameroon, Gabon, Equatorial Guinea, Congo Brazzaville, DR Congo, Angola, Namibia, South Africa, Kenya and Tanzania, Sudan, Djibouti” to, g., the United Arab Emirates, Iraq, Kuwait, Qatar, and the “Eastern Province of Saudi Arabia.” It further said it would stop all reefer bookings to or from Iraq, Bahrain, Kuwait, Qatar, United Arab Emirates, “Eastern Province of Saudi Arabia,” and Oman.
• MSC:
  • MSC said on Sunday it “has suspended all bookings for worldwide cargo to the Middle East region until further notice.” Although it announced a number of new freight rates on Monday, it had not announced a specific surcharge tied to the Iran conflict as of that day.
• Maersk:
  • Maersk announced on Sunday it will reroute all Middle East-India to Mediterranean and Middle-East-India to East Coast US shipments around the Cape of Good Hope and had chosen to “pause future Trans-Suez sailings through the Bab el-Mandeb Strait,” through which ships pass to the Red Sea and onto the Suez Canal.
  • On Monday, it announced that, “[e]ffective immediately,” it was “suspending reefer, dangerous / special cargo acceptance in and out of UAE, Oman, Iraq, Kuwait, Qatar, Bahrain and Saudi Arabia until further notice” and “suspending all new bookings between the India Subcontinent (India, Pakistan, Bangladesh and Sri Lanka) and the Upper Gulf markets of UAE, Bahrain, Qatar, Iraq, Kuwait, and Saudi Arabia (Dammam and Jubail only).” It said, “[c]onfirmed bookings accepted prior to this advisory will be reviewed on a case-by-case basis in light of the current operational constraints.” As of Monday, it had not announced a related surcharge.
• Ocean Network Express (“ONE”):
  • ONE on Monday said it “will temporarily suspend acceptance of new bookings for cargo moving both to and from the Persian Gulf until further notice.”

 

Monitoring Actions and Compliance

 

• New Charges: As carriers impose global actions to address the situation, it may be that they apply new surcharges, rates, or other changes to U.S. trade shipments in a manner that is not compliant or enforceable under the FMC’s regulations. Non-vessel operating common carriers (“NVOs”) may face the same issue when imposing their own actions or passing through noncompliant ocean carrier charges.

 

• Rerouting Existing Shipments: Existing shipments may be rerouted in practice, but the lawfulness of such changes will depend on the applicable tariffs, contracts, and terms and conditions, as will the lawfulness of charging shippers for expenses related to re-routing.

 

• Force Majeure: Ocean carriers may claim force majeure under their tariff, bill of lading terms and conditions, or Service Contract terms.  To the extent that ocean carriers claim force majeure, OTIs may also be able to claim force majeure depending on whether a force majeure clause exists in applicable tariffs, contracts, or terms and conditions, and, if so, how those clauses are written.

 

Thus, in light of VOCC announcements and uncertainty with regard to the conflict, OTIs and shippers would be prudent to:

 

1. Review their Service Contracts with ocean carriers, and any NSAs or NRAs with NVOs and customers, as well as governing bill of lading terms and conditions;
2. For NVOs, review (and update) their tariffs as soon as possible to ensure that new ocean carrier charges can be passed through to shippers/consignees;
3. Understand and assess alternatives in light of service disruption in the area of the Strait of Hormuz;
4. Coordinate with ocean carriers and other parties with regard to any affected shipments, particularly where shipments are re-routed or diverted to new destinations; and,
5. For OTIs, alert their customers to these charges, related service disruptions and delays, and how the OTIs will be handling them.

 

We hope this is helpful, and please contact us should you have any questions.  As we have during prior disruptions (COVID, port strikes, Red Sea attacks, etc.) we can assist in drafting notices to customers, tariff reviews/updates, reviewing the validity of new surcharges and routing imposed on shipments, and discussing those issues with ocean carriers.

 

Oliver M. Krischik okrischik@gkglaw.com

John H. Kester jkester@gkglaw.com