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Logistics

FedEx files suit against US export regulations; invokes violation under Fifth Amendment

June 26, 2019: FedEx has moved the district court in Columbia against the prohibitions imposed on it by the Export Administration Regulations (EAR).

The comments refer to an incident in June 2019 when FedEx returned a Huawei-marked package to its sender, and claimed the error was caused by “mishandling”.
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The comments refer to an incident in June 2019 when FedEx returned a Huawei-marked package to its sender, and claimed the error was caused by “mishandling”.

June 26, 2019: FedEx has moved the district court in Columbia against the prohibitions imposed on it by the Export Administration Regulations (EAR). The global transport company has urged the US department of commerce from enforcing prohibitions contained in the EAR against the company.

In its suit, FedEx said: "The EAR hold common carriers liable as aiders and abettors of the EAR violations committed by their customers, with steep penalties."

It further added: "Thus, 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. Indeed, the majority of transactions begin with the customer providing FedEx with a previously sealed package."

FedEx has said that 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.

It alleged that the prohibition "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."

"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 said in a strongly worded statement on the department of commerce litigation.

FedEx also requested that the court issue relief in the form of an order granting permanent injunctive relief in favour of the company, declare that the EAR are unlawful, award FedEx its costs and expenses, including reasonable attorneys’ fees and any additional "relief as is just and proper".

According to the suit, FedEx receives approximately 15 million packages for shipment daily. It added that its logistics system consists of "over 4,50,000 team members, 2,150 express stations, 13 air express hubs, 679 aircraft, 650 airports, 39 ground hubs, 600 ground facilities and 1,80,000 motorized vehicles."

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