FedEx sues US government over Chinese export rules

FedEx is suing the US government to obtain an exclusion to the Export Administration Regulations (EAR)  if it mistakenly ships goods that violate rules imposed on Chinese products by the Trump administration.

The lawsuit, filed in the District of Columbia by the US parcels giant against the US Department of Commerce, said that the EAR place an “unreasonable burden” on FedEx to “police the millions of shipments that transit our network every day”.

The logistics giant added that FedEx is “a transportation company, not a law enforcement agency”. 

The legal move comes after a phone, produced by Huawei of China, was sent to the US and then returned to its sender in Britain, in what FedEx said was an “operational error.” 

FedEx said today in a statement that it believes the EAR “violate common carriers’ rights to due process under the Fifth Amendment of the US Constitution as they unreasonably hold common carriers strictly liable for shipments that may violate the EAR without requiring evidence that the carriers had knowledge of any violations”.

The statement continued: “This puts an impossible burden on a common carrier such as FedEx to know the origin and technological make-up of the contents of all the shipments it handles and whether they comply with the EAR.

“As a company that is committed to complying with all laws and regulations in the countries we serve, FedEx strongly supports the objectives of US export control laws.”

It continued: “We have invested heavily in our internal export control compliance program. However, we believe that the EAR, as currently constructed and implemented, place an unreasonable burden on FedEx to police the millions of shipments that transit our network every day. FedEx is a transportation company, not a law enforcement agency. 

“FedEx will continue to defend our rights as a US based global company, and we remain committed to delivering outstanding service to our customers in all countries around the world.”

At the time of the Huawei phone incident, the parcels company stated: “FedEx values our business in China. Our relationship with Huawei Technologies Co Ltd and our relationships with all of our customers in China are important to us.

“FedEx holds itself to a very high standard of service. FedEx will fully cooperate with any regulatory investigation into how we serve our customers.”

In response to the package incident, Huawei Facts accused FedEx of having a vendetta against it.

Was FedEx within its rights to prevent a P30 Pro from being delivered from the UK to the U.S? No. Representatives from #Huawei, UPS and PCMag slam the courier’s vendetta. #HuaweiFacts https://t.co/7wc6xxy8Z8

— Huawei Facts (@HuaweiFacts) June 23, 2019

The incident comes just weeks after China announced it was investigating FedEx for “wrongful” deliveries. Packages containing paperwork sent by Chinese tech giant Huawei through FedEx to Japan had been diverted to the integrator’s Memphis hub.

FedEx apologised for the incident and declared that the packages were misrouted accidentally, but Beijing decided that a formal investigation was in order since the misrouting “severely harmed clients’ legitimate rights and interests and violated China’s delivery industry regulations”.