Violating Chinese law, FedEx may be put on entity list

By Chen Qingqing Source:Global Times Published: 2019/7/26 10:46:00

Chinese authorities unveiled more details about the ongoing probe into US delivery firm FedEx, saying the firm's previous statement of "operational error" in misrouting Huawei's packages to the US is inconsistent with facts. FedEx had also delayed over 100 packages sent from overseas to Huawei in China, the probe found.

During the investigation, regulators also found other indicators that FedEx was violating China's regulations and laws, the Xinhua News Agency reported on Friday. Relevant authorities will continue carrying out a full-scale, objective and fair investigation into the matter.

The latest progress with the FedEx probe clearly indicates that the US delivery firm violated Chinese law and damaged the interests of Chinese companies. It is possible that FedEx's delivery license in China could be revoked, Zhao Xiaomin, a veteran industry analyst, told the Global Times on Friday. 

"It will be put onto China's unreliable entity list, as it takes advantage of Chinese companies and violates relevant laws," he said, noting that it is also unacceptable that US companies ignored China's territorial jurisdiction to implement US domestic laws. 

China's entity list is still being drafted, according to the Ministry of Commerce, and analysts have said that companies like FedEx and electronics-maker Flex will be the first to be added as they have ignored China's territorial jurisdiction.

Flex Ltd privately detained materials and equipment belonging to Huawei, worth more than 700 million yuan ($102 million), for over one month after the Trump administration added the Chinese company to a blacklist in May, a source close to the matter told the Global Times on Thursday.

FedEx diverted two packages from Japan, addressed to Huawei China, to the US, and attempted to divert two more packages which were traveling from Vietnam to Huawei offices elsewhere in Asia - all without authorization, the Chinese company said in May, suggesting that the delivery firm may be working with the US government following the Trump administration's sanctions on Huawei. Chinese authorities launched a probe into the matter in June. 

FedEx announced in June that it would sue the US government for forcing it to comply with US export controls, requiring that the company police the contents of the millions of packages it ships every day. This is an impossible task logistically, economically and in many cases, legally, according to media reports, citing the lawsuit. 

"FedEx regrets its cooperation with US authorities to help the crackdown on Huawei, which now officially puts its business in China in danger," Zhao said. 

Neither FedEx nor Huawei have made comments on the latest update of the investigation.  


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