A keyboard and a shopping cart are seen in front of a displayed Shein logo in this illustration picture. - Reuters
NEW YORK: A bipartisan group of two dozen US representatives was calling for the Securities and Exchange Commission (SEC) to halt the initial public offering (IPO) of Chinese-founded fast-fashion giant Shein until it verifies it does not use forced labour, according to a letter seen by Reuters.
The US lawmakers want the SEC to mandate Shein to independently audit and verify “that the company does not use Uyghur forced labour as a condition of being registered to issue securities in the United States,” the letter said.
Sources have said Shein is eyeing an IPO in the United States this year.
The rapid growth of the cheap fashion firm is attracting political scrutiny in several countries, where leaders have said that the retailer is threatening homegrown businesses.
A 2022 Bloomberg report found that its garments contained cotton linked to China’s Xinjiang region.
Rights groups and governments have accused China of forced labour and the internment of Uyghurs, a mainly Muslim ethnic minority, in Xinjiang.
Beijing denies any rights abuses.
According to some politicians and analysts, the key to Shein’s success is a little-known trade exemption known as the de minimis rule.
They said the exception allows websites selling cheap Chinese goods to evade millions of dollars in taxes and fees, as well as regulations banning forced labour in the consumer product supply chain.
The push was led by Democratic Representative Jennifer Wexton and Republican John Rose and includes a signature from Democrat Earl Blumenauer, who previously introduced legislation in 2022 that would have effectively ended de minimis treatment for imports from China and other non-market economies. — Reuters
