According to The Wall Street Journal yesterday, FedEx filed a lawsuit Monday against the U.S. Department of Commerce. This is the second lawsuit filed against the U.S. government agency in a week, with the first coming from Huawei.
In a statement released yesterday, FedEx said the current Export Administration Regulations (EAR) put an “impossible burden” on the company to monitor packages for violations. FedEx said it handles an estimated 15 million packages each day, with an inspection of each one a “virtually impossible task.”
Coupled with the lack of safe harbor protections, FedEx only sees two courses of action: risk “immediate” fines from the U.S., or anger foreign governments and customers by not shipping packages that seem even a little risky.
There’s already a fear of FedEx being placed on China’s Unreliable Entities List due to several re-routed packages. The most recent incident involved FedEx’s refusal to deliver a Huawei phone to the U.S. from the U.K.
FedEx didn’t name Huawei in its statement or complaint. However, Huawei’s placement on the U.S. Entity List is seemingly impacting its and FedEx’s operations. Following the ban, Huawei reported a 40-percent drop in international sales. Also, the company expects the ban to wipe away $30 billion in revenue.
Talking with Fox News last night, Department of Commerce Secretary Wilbur Ross said the following in response to FedEx’s comments:
The regulation states that common carriers cannot knowingly ship items in contravention of the entity list or other export control authorities. It does not require a common carrier to be a policeman or to know what’s in every package.
A spokesperson for the Department of Commerce said the agency didn’t yet review the complaint, but will defend its role in U.S. national security.