FedEx sues US Department of Commerce over entity list

US courier company FedEx is suing its own government over its ‘entity list’, which it claims puts undue burden of enforcement on companies.

The action follows the recent story of FedEx refusing to ship a Huawei smartphone from one private individual to another because it thought it might get into trouble with the government. The reason it thought this is that Huawei is on a list compiled by the US Department of Commerce that identifies certain organisations US companies aren’t allowed to do business with.

It seems there was some confusion at a FedEx sorting office that resulted in the package being sent back even though it should have been allowed, so long as it wasn’t sent by Huawei themselves. While FedEx eventually admitted to making a mistake, that may have been too late for Chinese authorities, who are presumably itching for any opportunity to add US companies to its own ‘unreliable entities’ list.

FedEx quite reasonably feels it has been put in an impossible position when it comes to enforcing the Export Administration Regulations (EAR) that accompany this entities list, since it can’t possibly be 100% sure every one of the millions of packages it handles comply with the regulations and feels the punishments associated with getting it wrong, in either direction, are too severe.

“FedEx believes that the EAR violate 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 had knowledge of any violations,” said FedEx’s statement on the litigation. “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.

“As a company that is committed to complying with all laws and regulations in the countries we serve, FedEx strongly supports the objectives of U.S. export control laws. 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.”

You can read the full lawsuit here if that sort of thing floats your boat. This seems to be an inevitable consequence of the US’s increasing inclination to use trade bans as a political weapon. The burden of enforcing them falls on private companies and there’s almost no limit to how vindictive the US state is prepared to be to anyone who gets them wrong, just ask ZTE. The longer this trade war goes on there more collateral damage there will be – yay.