FedEx Sues US Government Over Export Rules, Huawei Restrictions

FedEx Corporation, the company synonymous with overnight shipping, has sued the U.S. federal government over onerous export control laws it claims make compliance all but impossible.

On Monday, FedEx filed a lawsuit against the U.S. Department of Commerce for requiring it to enforce federal export bans, an effort that means it has to implement extra screening measures that negatively impact its operations. It especially took issue with the government’s Export Administration Regulations (EAR), which it claims violates its Fifth Amendment rights.

“The language of the EAR imposes a constitutionally unsupportable choice for FedEx,” said FedEx in its lawsuit filed in a Washington D.C. federal court.

Complying with EAR means FedEx has to either risk legal penalties or refuse to ship any package that seems even slightly risky. FedEx bemoaned it has to bear an unfair and “impossible burden” of liability in complying with EAR.

“FedEx is a transportation company, not a law enforcement agency.”

In its lawsuit, FedEx claims U.S. laws "require considerably more screening than possible from common carriers like FedEx." The shipping company argues EAR requires it to determine whether any package violates the law by shipping U.S. technology to a proscribed entity.

FedEx says most of the packages it handles are sealed before shipment. It contends searching all of them will be far too costly and will also violate laws protecting the privacy of packages.

What FedEx wants is for the court to declare EAR unconstitutional as it applies to common carriers.

Since the Trump administration added Huawei to its export control blacklist in May, FedEx and Huawei have become entangled in two serious disputes over allegedly mishandled shipments.

In May, Huawei accused FedEx of sending two packages shipped from Japan to the United States, instead of delivering them to a Huawei office in China. Last week, FedEx tangled with Huawei again. It shipped a Huawei phone bound for the United States back to its sender in the United Kingdom.

A note attached to the returned package said "parcel returned by FedEx, due U.S. government issue with Huawei and China government."

FedEx CEO Fred Smith said the Huawei shipping errors are symptomatic of an ongoing problem. He said export controls continue to create “confusing situations” that damage the company’s reputation.