Home Business FedEx sues US government over export rules after Huawei shipping problems – The Verge

FedEx sues US government over export rules after Huawei shipping problems – The Verge

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Delivery company FedEx has sued the US Department of Commerce for requiring it to enforce export bans with extra screening efforts. In a statement, FedEx complained of an unfair and “impossible burden” of liability. “FedEx is a transportation company, not a law enforcement agency,” it says. The suit comes a few days after FedEx mistakenly refused to ship a Huawei phone because of potential legal issues.

FedEx’s complaint says the current Export Administration Regulations violate FedEx’s Fifth Amendment rights. “The language of the EAR imposes a constitutionally unsupportable choice for FedEx,” it says, claiming that FedEx has to either risk legal penalties or refuse to ship any package that seems even slightly risky.

FedEx CEO Fred Smith told Fox News that Huawei shipping errors were emblematic of an ongoing problem, with export controls creating “confusing situations” that tarnish the company’s reputation.

Commerce Secretary Wilbur Ross took issue with FedEx’s interpretation of the law. The regulation, he said, only meant that carriers like FedEx “cannot knowingly ship items” that are banned by export controls. “It does not require a common carrier to be a policeman or to know what’s in every package,” he told Fox.

FedEx has been accused of violating export controls before, though. The Department of Commerce fined it for shipping packages to a banned recipient between 2011 and 2012, saying FedEx “knew or should have known” its screening system missed slight variations of the company name. FedEx settled last year for more than $500,000. Conversely, the Chinese government recently said it’s investigating FedEx for misrouting some Huawei parcels, so erring on the side of caution can cause its own problems.

The government has placed several restrictions on US companies dealing with Huawei, partly because of an ongoing trade war with China and partly because of unclear security threats. There’s no blanket ban on transporting Huawei products, but FedEx argues that under the current regulations, its employees are likely to make mistakes in the name of avoiding legal trouble.

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