How Shipping a Huawei Phone Via FedEx Made International News

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It’s not often that you discover a co-worker at a sister publication has made national news. Over the weekend, I was downright startled to see PCMag and FedEx popping up in headlines declaring the package company was refusing to deliver Huawei products as a result of the embargo levied against that company by the Trump Administration.

To recap: PCMag (a sister publication of ExtremeTech, also owned by Ziff Davis) attempted to ship an already-purchased Huawei P30 from the United Kingdom to the US for additional analysis. The Huawei P30 is an already-released device from Huawei. The package arrived in the United States, went to Indianapolis, IN (a major FedEx distribution hub) and was then returned to the UK. When it arrived back across the pond, the following label was affixed:

What follows is best described in timeline form. It involves a lawsuit (filed by FedEx), conflicting information from Parcelforce (a British delivery company), conflicting statements from FedEx, and an ongoing lack of clarity on a remarkably simple question: Can an individual ship a Huawei device into the US intended for another individual, when the product is not being sold, is not new, and does not represent any sort of US technology transfer or assistance from a US company?

It is not illegal to own a Huawei product in either the United States or the United Kingdom, and it is not illegal for private citizens to ship Huawei devices to each other. The fact that US companies are forbidden from doing business with Huawei does not mean it is illegal for a shipping company to carry a Huawei phone in a box to another private person. If carrying a package in a box constituted having a business relationship with a company, then FedEx would literally have a “business relationship” with every company that ever shipped a product through its service.

Timeline

According to FedEx, the answer to this question is so unclear it has sued the Trump administration, alleging that the current situation “essentially deputize[s] 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.” FedEx further argues that the Export Administration Regulations (EAR) prohibitions: “violate common carriers’ rights to due process under the Fifth Amendment of the U.S. 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.”

According to Commerce Secretary Wilbur Ross: “The regulation states that common carriers cannot knowingly ship items in contravention of the entity list or other export control authorities. It does not require a common carrier to be a policeman or to know what’s in every package.”

At issue here, it seems, is whether FedEx is required to perform close package inspection to determine where goods came from. FedEx feels that the law could allow the government to charge it with shipping illegal goods if it does not do this. Secretary Ross’ comments imply that this is not the correct reading of the law, at least in his view. Hashing things out in front of a judge may be the best way to clarify the issue and determine what level of inspection FedEx is required to perform to fulfill its obligations before the company exposes itself to significant liability. PCMag was able to get a P30 shipped to its offices from California to the East Coast, so the issue appears to be confined to international shipping, at least for now.

What this issue illustrates, more than anything, is the tremendous confusion injected into the supply chain by major changes to the law. There was confusion between Parcelforce and FedEx over whether it would ship this specific package, even after FedEx had clarified it. Repeated shipments were necessary and we still don’t know until tomorrow if the device will actually arrive.

A full-on trade war between the US and China with expanded restrictions on more companies or the shipping confusion that would be unleashed by, say, a no-deal Brexit later this year could be extremely confusing, particularly if FedEx and other companies were legally required to enforce trade embargos by inspecting huge numbers of packages. We’re not saying things will play out that way, but this kind of snarl over literally one phone could be an ugly sign of things to come if the trade negotiations between the US and China really break down.

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