FedEx sues US government over China export rules

Jun 25, 2019   Supply Chain

The carrier has issued a statement stating that it is suing the US government to obtain an exclusion to the Export Administration Regulations (EAR) if it should accidentally ship goods that violate rules imposed on Chinese products by the Trump administration.

In a lawsuit that could have considerable consequences for the automotive supply chain, filed in the District of Columbia by FedEx against the US Department of Commerce, FedEx said that the EAR place an “unreasonable burden” on it to “police the millions of shipments that transit our network every day”.

FedEx stated that it receives approximately 15 million packages for shipment daily, and to
support its operations, it has a complex logistics system consisting of over 450,000 team members, 2,150 express stations, 13 air express hubs, 679 aircraft, 650 airports, 39 ground hubs, 600 ground facilities and 180,000 motorised vehicles spanning more than 220 countries and territories to ensure packages get from their point of origin to their destination safely and in compliance with applicable laws.

The logistics provider 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 in the 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.”

The statement went on to state: “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.”

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

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