The U.S. Commerce Department is yet facing another legal trouble, as the delivery company, FedEx filed a lawsuit against the federal agency to prevent them from imposing export regulations against the shipment giant.
While FedEx did not involve the Chinese tech giant Huawei in its statement, the shipping company has recently been caught in a crossfire between the smartphone manufacturer and the federal agency, following the seizure of Huawei’s shipment last week, where China is reportedly investigating the involvement of FedEx is the shipment blockage.
“FedEx believes that the EAR violates common carriers’ rights to due process under the Fifth Amendment of the U.S. Constitution as they unreasonably hold common carriers strictly liable for shipments that may violate the EAR without requiring evidence that the carriers knew about any violations. This puts an impossible burden on a common carrier such as FedEx to know the origin and technological make-up of contents of all the shipments it handles and whether they comply with the EAR,” said FedEx in a statement.
FedEx cannot review every package they receive
In its lawsuit, FedEx says U.S. export regulations, “essentially deputize FedEx to police the contents of the millions of packages it ships daily even though doing so is a virtually impossible task, logistically, economically, and in many cases, legally.”
But FedEx denies that this a task that they can accomplish because the shipper receives about 15 million packages per day for shipment and its system spans more than 220 countries and territories, making it practically impossible to check the contents of every parcel.
“To comply with the Export Controls,” the lawsuit says, “FedEx screens the names and addresses of its shippers and the designated recipients prior to delivering any package in order to identify whether the sender and/or recipient are an entity or person” on the Commerce Department’s “entity list” of persons that could pose risks to U.S. national security or foreign policy interests.
“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.”
Only recently, the Commerce Department has included Huawei in the “entity list.”
The crossfire between Huawei and the Commerce Department
The growing tension between China-based smartphone manufacturing and Trump’s administration after the latter has accused Huawei of being used by the Chinese government to carry out economic sabotage and espionage against the U.S. with its 5G technology has already affected many companies with FedEx as their recent victim.
Washington has been very aggressive in its campaign against Huawei. In recent months, the U.S. government has been talking to its allies in Europe to ban Huawei’s infrastructure or else the U.S. will stop giving them access to U.S. intelligence.
But Huawei has stood its ground and continued fighting for its existence in the U.S. market. Only recently, Huawei filed a lawsuit against the U.S. Commerce Department to challenge whether the shipment of equipment that they intend to be tested in the US and then shipped backed to China after testing, is covered by the Export Administration Regulations.
Asserting that the shipment did not need a license (that’s why it doesn’t have shipment license), Huawei argues that it shipped telecommunications equipment from China, including a computer server and Ethernet switch, to a testing laboratory in California.
The shipment was seized in Alaska by the US government, and until now, there is no concluded decision regarding the delivery. Huawei is asking the Commerce Department to rule whether the shipment is illegal or not. In case that the ruling favors Huawei, it’s also praying that the consignment to be released.
In a statement, the Commerce Department said: “We have not yet reviewed the complaint, but nevertheless look forward to defending Commerce’s role in protecting U.S. national security.”
FedEx is threatened with up to $1 million and civil penalties of $300,000 per violation which the company thinks is putting them “between a rock and a hard place — absent the availability of review, FedEx must either forgo lawful activity because of its well-founded fear of prosecution, or willfully violate the Export Controls, thereby subjecting itself to criminal prosecution and punishment,” the suit says. It also means that “requiring FedEx to inspect every package abroad indiscriminately could place” the company in violation of privacy laws.
“FedEx will continue to defend our rights as a U.S. based global company, and we remain committed to delivering outstanding service to our customers in all countries around the world,” the company assures their partners and customers.