
FedEx sues U.S. government over 'impossible' task of policing exports to China - metaphysics
https://www.reuters.com/article/us-huawei-tech-fedex-usa/fedex-sues-u-s-government-over-impossible-task-of-policing-exports-to-china-idUSKCN1TO047
======
codingdave
I used to do customs compliance for UPS during a break I took from tech. The
only way to 100% "police" international shipments is to open them, and look at
what is inside every box. Even ignoring the logistics of that, that seems like
a privacy concern to me.

FWIW, at UPS we were allowed to open the boxes if needed (no other UPS
department had that permission), but we normally just trusted that whatever
description they put on the paperwork matched the contents of the box. We'd
open it if there was no paperwork. If we knew the description would stop it at
customs, we'd look inside and re-write the paperwork after seeing what the
contents were to speed it through customs. But I'd estimate we sent more than
95% through without opening a box.

~~~
dev_dull
Did they ever run any test? For example, open every box and record the
accuracy?

If the accuracy is greater than 95% then I don’t see any problems with your
actions.

~~~
codingdave
I'm not sure what you mean by accuracy.

But no, we didn't do testing of any kind. If the packages got through customs
without causing a delay that made people miss their expected delivery date,
all was well. It wasn't our intent to do the job of customs, we just intended
to make sure that everything was documented in ways that it would speed
through. Or, to stop the package before it left its originating city and have
the shipper correct it vs. having it go across the country before a problem
was noticed.

It was our goal to make the shipping smooth with minimal invasion of people's
packages.

------
badgers
Five years ago there was a similar situation with the transportation of
prescription medications. FedEx put out a public statement that they intended
to fight the Department of Justice order:

"We want to be clear what’s at stake here: the government is suggesting that
FedEx assume criminal responsibility for the legality of the contents of the
millions of packages that we pick up and deliver every day. We are a
transportation company – we are not law enforcement. We have no interest in
violating the privacy of our customers. We continue to stand ready and willing
to support and assist law enforcement. We cannot, however, do the job of law
enforcement ourselves." [1]

Ultimately two years later the DOJ dropped the charges against Fedex.

"In court on Friday, [U.S. District Court Judge Charles] Breyer said FedEx was
'factually innocent.' He said the company repeatedly asked the U.S. Drug
Enforcement Administration to give it the name of a customer that was shipping
illegal drugs so it could stop working with the person, but the agency was
either unwilling or unable to do so." [2]

If this plays out similarly, FedEx will use a similar blacklist mechanism to
comply with the law, but is suing right now to prevent any backlash that will
inevitably occur when the blacklist doesn't contain an illegal entity and it's
discovered there was a shipment that slipped through the cracks.

"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. ... FedEx responded by saying publicly that it would deliver
all products made by Huawei to addresses other than those of Huawei and
affiliates placed on the U.S. national security blacklist." (from the main
article in this thread)

[1] - [https://about.van.fedex.com/newsroom/fedex-response-to-
depar...](https://about.van.fedex.com/newsroom/fedex-response-to-department-
of-justice-charges/) [2] - [https://www.npr.org/sections/thetwo-
way/2016/06/17/482537913...](https://www.npr.org/sections/thetwo-
way/2016/06/17/482537913/justice-department-drops-charge-that-fedex-shipped-
for-illegal-pharmacies)

------
pcurve
Does the govt provide mailing addresses? Is there a law on the book that puts
burden on shipping companies to block sender and receiver based on the
provided addresses?

If not then I’m with fedex on this one.

~~~
mylonov
Yes, they also provide API [https://developer.trade.gov/consolidated-
screening-list.html](https://developer.trade.gov/consolidated-screening-
list.html)

~~~
privong
Thanks for posting that.

I find it odd that the URLs returned by the (test?) API[0] are bit.ly
shortened. I'm generally not a fan of URL shorteners because I can't easily
see where I'm headed, but it also seems that the government should have their
own shortener URL if they're going to do that.

[0]
[https://www.export.gov/consolidated_screening_list#/](https://www.export.gov/consolidated_screening_list#/)

~~~
BartBoch
It's strange especially, that the bit.ly allows you to check statistics
without any form of restriction:

[https://bitly.com/1I7ipyR+](https://bitly.com/1I7ipyR+)

------
ptah
customs should be dealing with this, not fedex

~~~
ryanmercer
Each year, more than 11 million maritime containers arrive at our seaports. At
land borders, another 11 million arrive by truck and 2.7 million by rail. Tens
of thousands of packages arrive every day by air.

Carriers, to clear stuff through customs, have to have appropriate documents
that have the shipper/importer of record/adequate description of the
goods/country of origin. This then gets, by the vast majority of brokers
anyway, transmitted electronically to Customs and the vast majority of
packages are never inspected.

~~~
ptah
wow! so if my understanding is correct: customs can still check if it is
shipped by huawei

~~~
ryanmercer
Customs will know if Huawei is the shipper or importer of record, if it was on
the docs. However "John Smith" could walk down to FedEx/UPS/DHL and go "I have
this box of phones I'd like to ship, as John Smith" and hand a box full of
Huawei phones across the desk.

The origin station goes "ok" and the provided documents get scanned in
(commercial invoice, waybill). The packages goes along its way. If it is
headed to the United States those documents then get transmitted to an office
somewhere and someone reviews them and files entry on the shipment with the
port it is expected to land in.

Say it's John Smith to Not Huawei Inc and it's 12 phones.

So Customs would get that it's John Smith and such and such street, shipping
to Not Huawei Inc at such and such street. They'd then get the tariff number
of 8517120050 for cellphones, that the quantity is 12, the country of origin
on the docs and the value of the shipment.

What Customs won't see, unless they decide to manually review the commercial
invoice themselves, is that the phones were manufactured by Huawei. What
Customs and the carrier doen't realize is that "John Smith" is actually
"Huawei Employee at Huawei, shipping for Huawei from Huawei to Huawei" because
the commercial invoice says John smith to Not Huawei Inc which happens to be a
DBA for Huawei (although Customs could catch this via the EIN).

A lot of customs clearance is "If it's written on the commercial invoice, it
must be true" unless Customs flags something for manual inspection and decides
to question it themselves. And the volume of packages entering the United
States is such that it is just impossible to go over even 20% of shipments
with a fine-toothed comb. You'd need to drastically increase the number of
ports, the size of the ports, probably increase the number of CBP employees
doing the job an order of magnitude and you'd still end up slowing down how
fast freight is getting moved.

We live in a world where stuff gets on a plane in China and 12 hours later is
clearing Customs and getting on a truck to head to it's final sort facility or
onto a truck to be delivered to the importer. If you wanted to manually
inspect every shipment you'd need an insane amount of warehouse space and
something might get released a week or two after landing at the port of entry.

~~~
username444
I work with a company that imports and exports physical products to the U.S.
regularly.

Yes, you could probably get away shipping a dozen phones a few times. But they
will catch it eventually. They do actually inspect paperwork and sometimes
contents.

And if they find out you've lied on the paperwork, you've earned yourself a
shit list that's going to extend to any travel you do to/from the U.S. for
life, on top of penalties and possibly arrest warrants.

They don't mess around.

I should add: CBP shares offices at the border with the couriers. They're
literally down the hall from each other. They're inspecting packages crossing
the border all day long, but it's a random sampling, so whether it's your day
or not is a matter of luck. They also have mobile x Ray trucks that scan full
semi trailers.

~~~
LeifCarrotson
> you've earned yourself a shit list

Does this extend up and down the tree? The issue is not so much that John
Smith needs to get randomly selected at every airport he goes to for the rest
of his life.

The issue is that the business he worked for also hired Jane Doe who is doing
the same thing - they'd need to trace the responsibility up to his
employer/contracting company and back down to their other employees and
contractors.

Businesses seem surprisingly good at providing scapegoats and deniability in
situations like this, especially compared to our government's tendency to
blame the individual.

~~~
username444
As far as I'm aware, this applies to the person filing the documents. If a
person does this on behalf of a company without referencing the company, he's
personally liable. If the company is listed on the paperwork, they'd be
flagged.

There's a big difference between sending something personally at the post
office, and registering as an exporter/importer. If you're registered, you use
your broker account number.

Can the company have thousands of employees attempt to send packages
personally? Sure. But if discovered, the company would itself be shitlisted,
with probably no way to undo it. The executives and any company that helped
facilitate the fraud would be investigated.

I can't speak to whether the CBP maintains employment data or affiliations,
but my guess would be yes. I'm sure they have back-office integrations with
the NSA.

Misrepresenting information is lying under oath to a government agent. Even
honest to God mistakes will get you fined, and flag you for closer inspection
in the future.

As a non US citizen, the CBP is scary. I've been to exporter training sessions
put on by them jointly with brokers and lawyers. I can't stress how seriously
they take this, and how far their influence reaches. Even as a US citizen, I'd
find them scary.

~~~
em-bee
it wouldn't be hard to create another company to do this either.

~~~
username444
Yes, it would. The application process is a bitch, and fairly invasive. This
isn't something you can churn and burn.

~~~
ryanmercer
If they wanted a legal entity with legal protection and create a brand new
company sure.

You can go buy shelf companies (companies that have been previously created
and are presently unused) online all day long and effectively take instant
delivery however.

And if they just wanted to be blackhat about it, you can go to the IRS website
and generate an EIN (tax ID for companies) in a few clicks without showing any
identification or documentation and then you just need a place to receive
packages or have the packages held for pickup at the carrier.

You can also just go hire random people to accept delivery or pickup your
packages. Those dealing in AAS (steroids), recreational drugs, carded
merchandise etc do this regularly.

Crime exists because, more often than not, it's painfully easy.

~~~
username444
Shelf companies is an interesting approach I hadn't considered.

I wouldn't call anything you described easy, but I'm not a nation state trying
to illegal smuggle banned goods. I disagree that you can churn and burn these,
but you've made a good point.

------
vectorEQ
isn't this something for border controls / customs rather than shipping
companies??

~~~
kartan
The problem that I see with this approach is that we are privatising profits
while socializing costs.

Customs should be dealing with it is akin to say that taxpayers should deal
with the cost of FedEx businesses whenever they use it or not.

I see the point of sharing health care or education expenses thru society.
But, your new iPhone cost should be on you.

Customs should still do random checks and things like that to assure that all
companies follow the law, thou.

But, it is not a strong opinion. I see the value of having customs doing it. I
just get inclined for FedEx taking in the cost.

~~~
maxlybbert
> The problem that I see with this approach is that we are privatising profits
> while socializing costs.

The costs in question are the costs of achieving a government goal. It’s not
like FedEx expects the government to pay its shipping bill. But when a
government mandate costs FedEx money, it wants to be compensated for
complying.

~~~
kartan
> it wants to be compensated for complying.

This will not scale. Next, industries will want to be compensated to add
filters to not pollute rivers. Car makers will want to be compensated for
doing safe cars. Supermarkets will want to be compensated for having to check
customers age before selling alcohol or tobacco. Etc.

To follow the law is part of doing business. If the law is unreasonable or it
is a problem with the law or it is a problem with the business model.

~~~
dclowd9901
You're glossing right over what's happening here. Customs is expecting FedEx
to _enforce_ law. Not comply with it, enforce it. Preventing a package from
crossing the border on a legality basis is not the responsibility of any
private entity in the United States. We have official agencies who act in that
capacity and have authority to do so.

So, no, it is nothing like putting seatbelts in cars or not polluting rivers.
Equivalent would be forcing car makers to ensure customers wear their
seatbelts or companies keep rivers at a certain level of pollution (regardless
of their complicity in its pollution).

------
AtomicOrbital
reminds me of the entirely fraudulent way mainland Chinese merchants send
packages to USA labeled "gift" ... or often they are charged zero for shipping
... its the Chinese government subsidized way to support their own export
based economy ... whereas the USA is shooting itself in the head with this
export decision

------
virusduck
I wonder if hospitals will also start to sue over the EO to provide costs up
front? On one hand this seems super helpful, but on the other hand, it seems
pretty impossible with our healthcare system.

------
wincaltop
Two related recent reads regarding how we came to be with regards to China.

First it was Nixon and Kissinger:

"Nixon argued, “containment without isolation” was necessary but not
sufficient. “Along with it, we need a positive policy of pressure and
persuasion, of dynamic detoxification … to draw off the poison from the
Thoughts of Mao ... [although] Nixon said, years later, that his policies
might have “created a Frankenstein” — and the family of nations he hoped would
domesticate China finally has begun to take notice of the monster that has
arisen in its midst."

[https://thehill.com/opinion/international/449695-red-
china-r...](https://thehill.com/opinion/international/449695-red-china-redux-
pariah-among-nations-enemy-of-its-people)

Then it was the American companies:

"Well before Donald Trump was elected, the carping about Beijing's policies
from the Fortune 500 crowd intensified. In the annual reports issued by the
American Chambers in both Beijing and Shanghai, the number of respondents who
felt the regulatory environment in China was worsening steadily increased. A
senior executive at Honeywell in 2015 told me flatly that his company was fed
up with Beijing's demands for technology transfer. Friends at CISCO and
MIcrosoft said the same. Privately, the complaints about companies like Huawei
stealing intellectual property also ratcheted up."

"After having spent so much time and money building out their supply chains,
there aren't too many CEOS who want to spend more time and money rebuilding
them somewhere else," says former USTR Froman, now a senior executive at
Mastercard. And with a Presidential election now less than a year and a half
away, the possibility that a Trump successor may not be a "tariff man" (or
woman) also means companies are unlikely to tear up their supply lines, at
least for now.

[https://www.newsweek.com/how-americas-biggest-companies-
made...](https://www.newsweek.com/how-americas-biggest-companies-made-china-
great-again-1445325)

------
devoply
More of a political move than a legal one, saying please don't ban us... But
this trade war is a bifurcation of the world that was going to happen sooner
or later. US is trying to tilt the table on its side. It's a bold move Cotton,
let's see if it pays off.

~~~
lsc
>But this trade war is a bifurcation of the world that was going to happen
sooner or later.

why is it inevitable? What do trade wars get us?

As I understand it, trade wars decrease the GDP of the world, decrease the
total output and productivity of markets on both sides. I mean, certainly,
it's better than a war war, but it's something that has great costs for both
sides, and few (no?) Benefits for either.

~~~
Joakal
From what I read, China started the 'free trade' war according to USA. Free
trade as in, they weren't meant to impose restrictions on entering their
economy and subsidise everything going out. They're still happy to trade with
USA but USA wants mutual free trade, not one way.

~~~
kevingadd
Yeah, the current US administration claims that China started a "trade war"
but they're also making similar claims intermittently about other trade
partners like Mexico. It's nonsense, and the lack of economic understanding
behind the claims that led to them kicking off a trade war is evident in how
poorly the war is turning out for american businesses

~~~
mistermann
> ....the lack of economic understanding behind the claims that led to them
> kicking off a trade war is evident in how poorly the war is turning out for
> american businesses

Based on the impact of the trade war on American businesses, you are able to
deduce the quality of understanding of economics of those behind the policies?

------
alehul
> 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.

Then don't export? Leave it to another company willing to take that risk and
inconvenience, and price international shipping in accordance with that risk
and inconvenience.

~~~
m-p-3
Why should the burden of these restrictions and policing falls upon a private
company? If the government decides to apply additional restrictions under the
pretense of national security, then it should foot the bill.

~~~
jiveturkey
The government doesn't pay any bills whatsoever! The taxpayer does.

In this case, should all taxpayers foot the bill, or should only exporters?

~~~
jkaplowitz
All taxpayers. We're the ones indirectly responsible for the government that
imposes the unreasonably trade-disrupting regulations, and it's in everyone's
interest that we be able to export smoothly (not just that of the exporters
themselves).

------
gpm
Without having read the briefs, I fall pretty strongly against FedEx on this
one. If you can't run your business while complying with the law that doesn't
mean you get to break the law. Rather it means that you get to shut down the
business.

If a law is stupid (but otherwise constitutional) that doesn't mean you get to
ignore it without being liable for the consequences (fines, jail). If you want
to protest it without going to jail you can do so legally by telling people
it's a stupid law - while complying with it.

~~~
r32a_
This is a form of protest.

~~~
cardiffspaceman
I guess it's too radical but shutting down a business voluntarily if the rules
are too onerous would also be a form of protest. Especially when the idea is
that the business has allegedly been conscripted into unprofitable tasks.

~~~
steelframe
Publicly traded companies don't get to just shut down in protest. They are
obligated to take whatever actions would be interpreted as best fulfilling
their fiduciary obligations to the stockholders.

