- FedEx is suing the Trump administration, saying it’s “virtually impossible” to comply with its restrictions on trade with Huawei and other blacklisted companies.
- As checking millions of packages every day isn’t feasible, FedEx says its choices are to either scrap a big chunk of its business or break the rules and face stiff penalties.
- It argues the export restrictions violate its Fifth Amendment right to due process and trap it “between a rock and a hard place.”
- View Markets Insider’s homepage for more stories.
FedEx is suing the Trump administration, saying it’s “virtually impossible” to comply with its restrictions on trade with Huawei and other blacklisted companies.
As opening millions of packages every day to check if they contain restricted items isn’t feasible, FedEx says in the complaint, its choices are to either scrap a big chunk of its business or break the rules and face stiff penalties. As a result, it argues the export restrictions violate its Fifth Amendment right to due process and trap it “between a rock and a hard place.”
The Trump administration added Huawei to its “entity list” in May, barring US companies from doing business with the Chinese tech giant without special export licenses. It added several more Chinese companies to the blacklist last week.
Huawei has accused FedEx of having a “vendetta” against it, after the courier failed to deliver one of its smartphones from the UK to the US – which it blamed on an operational error – and rerouted two packages through the US that were sent from Japan to China.
The rules in question, Export Administration Regulations, put the onus on carriers like FedEx to ensure packages containing restricted items aren’t exported to blacklisted recipients unless the required licenses have been issued.
It holds them liable if they deliver banned items, but FedEx says it lacks the technical knowledge to determine whether components inside products such as cameras are kosher, according to its complaint. It also points out that opening millions of people’s packages would violate their privacy.
“The EAR essentially deputize FedEx to police the contents of the millions of packages it ships daily even though doing so is a virtually impossible task, logistically, economically, and in many cases, legally,” the complaint reads. “Indeed, the majority of transactions begin with the customer providing FedEx with a previously sealed package.”
FedEx says the restrictions put it in an extremely tough position.
“The credible threat of civil and criminal liability places FedEx between a rock and a hard place – absent the availability of review, FedEx must either forgo lawful activity because of its well-founded fear of prosecution, or wilfully violate the Export Controls, thereby subjecting itself to criminal prosecution and punishment,” the complaint reads.
Moreover, the company argues its constitutional rights are being infringed.
“The regulatory regime imposed by the EAR is such a substantial burden that it deprives FedEx of substantive due process under the Fifth Amendment,” the complaint reads. “The EAR deprive FedEx of liberty and property by arbitrarily and irrationally precluding FedEx from carrying out the basic functions of its business as a common carrier.”
FedEx seeks a permanent injunction that prevents EAR being enforced against it. It also wants a declaration that EAR are unlawful as applied to FedEx, reimbursement for its costs and expenses, and “such further and additional relief as is just and proper.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.