FedEx Sues US Government Over 'Impossible' Task of Policing Exports To China (reuters.com) 112
An anonymous reader quotes a report from Reuters: U.S. parcel delivery firm FedEx Corp on Monday sued the U.S. government, saying it should not be held liable if it inadvertently shipped products that violated a Trump administration ban on exports to some Chinese companies. In court filings in the District of Columbia, FedEx said it should not be expected to enforce the export ban, and could not reasonably be held liable for shipping products that it did not know about. Export restriction rules "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," it said in a filing.
What a surprise... (Score:5, Insightful)
Re: What a surprise... (Score:1)
Um the banks have a small handful of algorithms and systems that watch money transfers. Also the fed reserve watches every single wire transfer. So no the banks dont have an impossible task and they have big brother watching over them too.
The cost for FedEx, ups, etc to do something similar with physical packages would cost billions of dollars.
Re: What a surprise... (Score:5, Interesting)
Having worked on implementing said rules at a large financial institution I can tell you they are FAR easier implement than trying to keep track of everything that other people are shipping using your services. On the financial end, it's primarily pinging a database (provided by the government) whenever you have a new financial relationship with a company, nation, or individual and looking for suspicious transactions (such as someone paying cash for an annuity and then requesting a cancelation and refund during the cancelation period). Heck, look at the infrastructure in Customs. Even will all that, banned items pour into this country in huge amounts. If the Government can't stop everything (or even a significant portion of it) with all their extra resources and authority it's ridiculous to expect a private company to do it.
Re: What a surprise... (Score:1)
Lol. Comparing a large package delivery company that competes with several others with a small postal system in another country? Do the math and tell us how well (costly/inefficient) the small postal system would do if you simple scaled it up?
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Re: What a surprise... (Score:1)
Just do a fix rate for all goods from china. This would make Sam Walton proud again after his shameful children and their greed for exported goods.
#breakthereliance
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I don't know why business tends to fund GOP of late; it seems they are shooting their own foot.
First, war is only good for one type of business. It isn't the early 40s, and the Democrap warboner isn't going to result in the mobilization of our entire society. No other nation is anywhere near being on our level, and the ones that would be a slightly larger speedbump are nuclear powers. Even Killary couldn't start World War III at present.
Second, business is great, unless you're a whore selling the country out to China. Most companies aren't, and most of the remainder have enough decorum to reali
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Not sure he is. His dad often bailed him out, and helped him play marginally-legal tax games [nytimes.com]. They'd transfer and buy assets to and from each other's companies to inflate or deflate prices to get around taxes and to play billing games.
He was "successful" in a way similar to how Lance Armstrong was "successful".
It should be held to do that anyway. (Score:5, Informative)
Re:It should be held to do that anyway. (Score:4, Interesting)
I don't brake the law. (Score:1)
I accelerate the law. Right out the window.
But yes indeed this is how customs works and no to gp, claiming that if fedex doesn't play customs then Bad Things Will Happen is a pernicious argument. They work for the sender. If the government want them to be their customs service as well, they can bloody well pay for it. And while at it, have some other company actually ship the packages because both shipping and inspecting is clearly a conflict of interest.
Now you may also see why forcing banks to report "unu
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And that doesn't mean that the status quo should be maintained. That just proves how much of a burden on FedEx it would be.
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No, actually. The alternative is that they start to inspect every package at the border, it introduces enormous delays, then there's a huge popular revolt and they're forced to stop.
They want FedEx to spend the money to do the job for them AND take the blame for any resulting costs and delays. And if it can't be done, they want FedEx to allow them to pretend it's being done by giving them a way to plausibly claim they don't known the facts on the ground.
The whole dispute is really about who's seen to delay
Re: It should be held to do that anyway. (Score:2, Interesting)
So as a European I'm confused. FedEx don't already do outbound customs checks? I'm surprised because I assumed that was a large part of the reason that shipping things from the US is 10 times the price of shipping it from China.
I can get a small package from China in a week for about $1 in shipping. The cheapest option from the US is at least $8, and most web shops bump that up to a minimum $15 for international shipping.
If the US wants to compete on the export market, this is something you should look into
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Re:It should be held to do that anyway. (Score:4, Interesting)
In Argentina 100% of packages are inspected, and pay 50% or more in tax. The delay for regular post packages is 6+ months.
The Big 3 (DHL, Fedex, UPS), pool up some money to pay customs employees an "incentive" to work night shifts to inspect packages from them, guaranteeing same day inspection.
It's HELL.
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The alternative is that every package is held and inspected by customs. This will introduce weeks if not months of delays at the current volume.
It used to be that way, but the carriers wanted to be allowed to help so they could ship direct.
Now they want to cry that it is hard work.
If they want me on their side, they have to propose sending everything to a customs port instead, otherwise they're just being whiny liars about being "forced" to do it.
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For better or for worse, banks are required to enforce to all sorts of similar regulations related to money laundering and sanctions.
Financial regulations != customs regulations (Score:2)
For better or for worse, banks are required to enforce to all sorts of similar regulations related to money laundering and sanctions.
The cost of moving money digitally is tiny and the cost of inspecting transactions is comparatively modest. It's not zero but it's not comparable either. The cost of moving and inspecting actual physical boxes of stuff is HUGE. It requires ports and warehouses and armies of people and since a lot of goods are time sensitive it has to be done quickly too. It is literally impossible both economically and physically to inspect every shipment that crosses our borders. You are comparing apples to oranges.
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The banking equivalent for FedEx would be not to physically inspect each shipment, but to submit the sender/receiver information to a government database, and see if there are any hits for disallowed contacts. Additionally, they'd probably have to report each shipment to the country under sanction for central logging and information gathering.
It's economically feasible if you think about it this way.
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FedEx should comply with the laws of the country in which it is operating, as all other companies must. "Orange Man Bad" is not a proper excuse.
Not their job (Score:5, Informative)
So a customs agent will have to inspect every package. Sounds like a jobs program.
From the referenced page : "The U.S. Customs Service, an arm of the Treasury Department, is responsible for ensuring that all imports and exports comply with U.S. laws and regulations.
More specifically, Customs processes all the persons, baggage, cargo and mail crossing the nation's borders; it interdicts and seizes contraband, including illegal drugs; it assesses and collects duties, excise taxes, fees and penalties on imported merchandise; it protects American business, labor and intellectual property rights by enforcing laws intended to prevent illegal trade practices and it enforces special import and export restrictions designed to control critical technology used to develop weapons of mass destruction."
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But it is a shared responsibility. If you declare that you are shipping "shark fins" then UPS, FedEx, nor USPS are allowed to accept that package. Customs doesn't need to get involved. In fact, if Customs does, they will hang the carrier before the sender; because it should have never been accepted in the first place!
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Whose responsibility is it to ensure that declarations of parcel contents are not falsified?
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Customs, which is why its a shared responsibility. Also if the carrier comes to find out that the declaration is falsified or that the items are prohibited they are supposed to act on that.
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If the labor to open all packages addressed to China is prohibitive at the present rate, would FedEx be justified in setting prohibitive prices for shipping to China?
Re: Not their job (Score:2)
FedEx doesn't need to justify their prices at all (almost, there are some financial reporting regulations).
Re: Not their job (Score:2)
We aren't talking about fraud, but in cases where I label something as "firearms" shouldn't even be accepted by FedEx. That shouldn't even come to Customs for inspection.
Catching fraud is a customs responsibility but that is not the case here. We are talking about knowing that it's a Huawei device or receiver.
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Maybe we can hire low cost Chinese workers to do this task?
The tarrifs are in place... (Score:1)
to benefit Fat Donnie. Why else would he do it?
Food for Thought (Score:1)
A couple decades ago the response of most companies to such a ban would've been "we don't ship to China." This is a sign of the relative power of China to the US and businesses to the government. We have problems.
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I live in Argentina. We have so many problems with customs that most companies just... don't deliver to Argentina.
Amazon, for example. They deliver to all of Latin America except Argentina.
Euroamazons send a tiny fraction of their catalog, and charge 100% extra to cover for tax, then they reimbruise you the difference 2 months later.
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Yet Another Double-Edged Sword (Score:4, Insightful)
As a courier, FedEx does need to be aware of what's in their packages for a few reasons: Employee and Public Safety being the 2 at the top on the list.
However, they have built their business on picking up packages that are sealed and unseen, and delivering them with "no questions asked".
I wonder just how many times they have been taken advantage of by simply having a package vaguely labelled while they deliver something that could be quite harmful to their courier or the general public.
Sure, FedEx needs to be a bit more careful, but to what end?
That NQA Delivery everybody has come to rely on is then threatened, and business models are compromised.
We don't even need to consider the Privacy Impact, do we?
Again, double-edged sword.
Even the almighty USPS has this problem, with many companies simply bundling things up, labeling them, weighing them and slapping on the metered rate tags for sight-unseen deliveries.
Is Trump going to hold the USPS to the same standard, too?
"All" packages need to be thoroughly inspected and "cleared" before export to foreign destinations?
Don't they call that "Customs and Excise", or am I missing something?
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They are all held to the same standard. When you ship anything with these carriers, the sender does an agreement which lists all the prohibited items that should not be sent. There are countries & territories under US embargo that US carriers can not operate within nor can they accept & be part of the delivery chain to.
As for fraud, it happens, but once the carrier is informed (ie: by Customs) they must take action (usually means it gets confiscated & carrier forgets about it). But repeated at
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However, they have built their business on picking up packages that are sealed and unseen, and delivering them with "no questions asked".
Yeah but this is misleading. I've had lots of packages opened during transit for inspection. That process does not involve them asking questions. The package just shows up with the seal broken and extra tape covering it.
If it gets diverted to customs for inspection you can tell, because wrap the whole package in a giant cocoon of packing tape.
Grandstanding (Score:5, Informative)
In summary:
1) FedEx messed up by routing two packages through the US when they were going between China & Asia. They were stopped. However, they should have been stopped or returned to China. FedEx is barred from doing business with Huawei so should not have accepted the packages based on the fact it was going to a Huawei destination.
2) Some reporter in the UK sent a Huawei phone to a US collegue. FedEx probably saw the label and thought it was a "Huawei" affiliate and blocked it. Honest, but acceptable mistake.
People should take these with a grain of salt. This is what a ban is supposed to do. However, China wants to slap the US back so they are "investigating" if FedEx should be put on their retalitory blacklist. This freaks FedEx out as it severely impacts the rest of their business. So they are suing the US government to stay in China's good graces.
I am sure the US will say... tough luck, deal with it. The SupCourt has yielded to Executive authority for much less; even prior to Trump.
For those wondering if this is FedEx's job... YES. A carrier can't just transport guns across state lines if it is declared as such. Similarly, if FedEx knows the source or destination maybe Huawei, they risk doing business with Huawei which they are banned from doing so.
Re: Grandstanding (Score:2)
Shipping something to Huawei is not doing business with them. I can send a letter to the director of the CIA, but that doesn't mean I have business with him.
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Shipping something to Huawei is not doing business with them. I can send a letter to the director of the CIA, but that doesn't mean I have business with him.
As stated, you're making a false claim.
If all we know is that you're shipping something to them, that might mean you're doing business with them, it might not. We'd have to know what you're shipping to know if it is evidence of "doing business" or creates the conditions necessary for the state change to "doing business" to have happened.
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1) FedEx messed up by routing two packages through the US when they were going between China & Asia. They were stopped. However, they should have been stopped or returned to China. FedEx is barred from doing business with Huawei so should not have accepted the packages based on the fact it was going to a Huawei destination.
This has nothing to do with FedEx USA. Two FedEx companies in Asia were involved in trying to get a package from one place to another. It failed when the package was "mishandled" and sent to the US where customs "had" to open it up and see what was in it. Companies, including subsidiaries of US companies, outside of the US don't have to follow US laws. It's time that the US learned this or maybe they will start having their companies charged for breaking laws in other countries. China would be willing to re
How sanctions work (Score:2)
Companies, including subsidiaries of US companies, outside of the US don't have to follow US laws. It's time that the US learned this or maybe they will start having their companies charged for breaking laws in other countries. China would be willing to retaliate in such a way.
While you are correct in a sense, you also need to remember that the US does have the ability to punish companies like FedEx by threatening their ability to do business within the US and with other companies under the influence of the US government. This is how sanctions work against countries and the same thing works against companies. So since FedEx wants to continue to do business in and with the US the US government can sanction them even though theoretically it shouldn't matter.
Re: Grandstanding (Score:2)
Umm... yeah subsidiaries are required to follow US federal laws (not necessary state). When the US firm owns a significant but non-controlling share (most Asian shops), there is a lot of leeway and flexibility in the lines that can be crossed. But even here, if the firm's sub does something big like massive bribery, human trafficking, servicing an embargoed country, or inhumane treatment of workers, the US entity faces at minimum fines & probations. It could even result in forced sell off of the subsidi
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It will be funny as hell if China bans FedEx and Chinese companies try to switch their important document delivery to DHL.
Mistakes happen, including at FedEx, but FedEx is actually really reliable. They're going to look really dumb when the replacements make more mistakes.
The point of the lawsuit is merely to try to convince China that they can't punish the US Government by punishing FedEx, and that none of this is FedEx's fault.
Re: Grandstanding (Score:2)
I think China is picking on the little, low impact guy. FedEx is great at fast reliable delivery of individual packages. But UPS, DHL, and even USPS does a better low cost job with bulk & pre-packed pallets (USPS charges really low rates for handoff local delivery of Chinese stuff).
So I think they want to hurt a darling of the US and picked one who couldn't easily fight back. UPS on the other hand could easily reduce the number of planes landing there without losing much revenue and product would sit on
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That's exactly what I mean, it is hilarious, because they use FedEx for the most important packages for real reasons. The exact same reasons why those other carriers are better at cheap bulk.
It will require a cultural shift in business. Perhaps reliable delivery of important documents just isn't important in China anymore. If they want it to be that way, they can create those conditions by decree. Perhaps if you want to deliver a prototype, you should just send a human courier.
FedEx can't "fight back," but
I don't think you can sue the US government (Score:2)
...At least not for something like this. Something about sovereign immunity. There's the Federal Tort Act, but I don't think it covers this, I could be wrong.
Suing the Attorney General (Score:2)
It's common practice to sue the Attorney General for an injunction against enforcing a particular law. The legal fiction underlying this practice is an assumption that if the Attorney General enforces an illegal law, the Attorney General is acting outside the scope of the power granted to him and is therefore no longer covered by sovereign immunity.
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I thought that the government officials were protected by something, and then I found the following here [justice.gov]:
The general rule at common law was that in order for a government official to be protected by absolute immunity for common law torts, not only did the official have to be acting within the outer perimeter of his/her official duties, but the conduct at issue also had to be discretionary in nature. Westfall v. Irwin, 484 U.S. 292, 297-298 (1988). In enacting the Federal Employees Liability Reform and Tort Compensation Act of 1988 (FELRTCA), Congress abrogated this common law rule and extended absolute immunity for common law torts to all federal employees regardless of whether the conduct at issue was discretionary. See United States v. Smith, 499 U.S. 160 (1991). FELRTCA confers such immunity by making the Federal Tort Claims Act the exclusive remedy for all common law torts committed by federal employees while acting within the scope of their office or employment. 28 U.S.C. 2679(b)(1). However, the immunity conferred by FELRTCA does not extend or apply to suits against federal employees for violation of the Constitution or federal statutes. Thus, government officials sued for constitutional torts continue to be protected only by qualified immunity. 28 U.S.C. 2679(b)(2). See Harlow v. Fitzgerald, 457 U.S. 800, 807 (1982); Butz v. Economou, 438 U.S. 478 (1978). Where applicable, qualified immunity protects an official from trial and the burdens of litigation. See Mitchell v. Forsyth, 472 U.S. 511, 526 (1985).
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However, the immunity conferred by FELRTCA does not extend or apply to suits against federal employees for violation of the Constitution or federal statutes.
They're suing over a new regulation. There are a bunch of Federal laws that grant the right to sue over regulations. They can sue the agency, they can sue the officials that implemented the regulation. No idea if they can win, but they can certainly sue.
Fedex ought refuse to ship from or deliver to DC (Score:2)
If they can get UPS to go along, the better. Lets see how well the USPS picks up the slack.
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USPS does fine, but that's a poor answer for China because it involves delivering to China-Post on their side.
For outbound document shipping, a lot of Asian businesses use DHL->USPS, and return mail using DHL. But for important documents they switch to FedEx. For reasons more serious than "2 (two) packages returned intact ."
China thinks it can win a trade war by repeatedly threatening to stab itself in the face, to save its face. It seems like a dubious strategy, but they're up against an alien lizard p
It's not unusual (Score:2)
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Anyone running a business is a deputized tax collector. Not saying I agree, rather it's not unheard of to be forced to do something that's not your job.
Yep. And a deputized safety inspector, and a deputized diversity inspector, and ...
So that objection is a bit silly. Controlling what crosses the borders is literally one of the primary domains of the federal government. If FedEx has an issue with that, then I guess they have the option of not trying to ship stuff across the borders. Oh, it's lucrative to ship stuff across borders? Then I guess you'd best find a way to comply.
hmm (Score:2)
It's interesting .. (Score:2)
Re: Not new (Score:1)
It isnâ(TM)t fed exâ(TM)s job to open and inspect our packages. I sure as hell donâ(TM)t want to give private companies any authority to invade my privacy. If anyone has to do it I would rather it be the government where I have more recourse if they do something that really pisses off a lot of people.
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FedEx's job is delivery, not package control.
Re: Not new (Score:1)
FedEx is not the exporter