Courier giant FedEx has filed a suit against the United States’ Department of Commerce over the current Export Administration Regulations (EAR). These regulations require the courier firm to screen and bar packages destined for the US that could be a national security threat. Due to this regulation, FedEx has now found itself at the center of the battle between the Trump administration and Chinese tech giant, Huawei.
According to a statement released by FedEx on Monday, such a requirement is in violation of common carrier’s rights, which allow for due process according to the Fifth Amendment. The courier company further went on to state that the result is an unfair burden being shifted to it.
In morning trading last Tuesday, the share prices of both FedEx and one of its main competitors, United Parcel Service fell by approximately 2%.
Huawei demanded to know the reason why two packages shipped from Japan to China were not delivered. The packages were delivered to the United States instead. FedEx’s explanation was that the packages were erroneously misrouted after which the offered an apology to the tech company.
Popular tech magazine PCMag published a report that stated that on June 21, FedEx refused delivery of a package destined for the US from London. The reason was that the package’s contents included a Huawei phone.
Also, on June 21, the United States’ Department of Commerce updated its entity list with five additional Chinese organizations as it claims that they are using military-grade technology in supercomputing. Any US based company that intends to sell technology to companies on the entity list must first obtain approval from the US government. Trade tensions between the US and China rose when Huawei was added to the entity list in May.
FedEx stated that it is a courier service and should not be involved in law enforcement by investigating the millions of packages that they process daily.
Wilbur Ross, Commerce Secretary, refuted FedEx’s claim as he stated that the regulation only says courier companies cannot knowingly ship items that are in violation of the entity list.
FedEx filed the lawsuit in the District of Colombia’s U.S. District Court.