States demand transparency from Shein on slave labor prior to US stock exchange listing.

Fast-fashion retailer dogged⁣ by⁤ accusations it exploits China’s Uyghur population

Sixteen state attorneys general call for action against Shein

Sixteen⁢ state attorneys general ​are pressing the federal government to ⁤instate⁣ regulations that would⁢ force the Chinese-owned online retailer Shein to address allegations it relies on​ slave labor ahead of its possible inclusion on the ⁣U.S. stock exchange.

The state officials, led ​by‌ Republican ⁢Montana attorney general Austin⁣ Knudsen, want the U.S. ​Securities Exchange‌ Commission, which regulates the U.S.​ stock market, to implement a‌ rule that would ⁤mandate‍ all foreign-owned companies submit to an independent third-party ‍probe into their labor practices, according to a letter sent Thursday to the SEC ‌and obtained by ⁢the Washington Free Beacon.

Shein, a $64 billion company that has⁣ become the world’s ‍largest online fashion retailer, has long been dogged by accusations it relies​ on cheap slave ⁣labor from China’s Uyghur‌ population. Amid speculation the company is eyeing a spot on the U.S. stock exchange,⁢ the attorneys general say the Biden administration has a responsibility to ⁤block this bid unless Shein can prove it is not ‌using forced labor and unsafe working conditions‍ in its factories.

“An IPO [initial public offering] of this magnitude—involving⁤ a foreign-owned company that is facing credible ⁣concerns about its core business practices—cannot move forward ⁢on self-certification alone,” write the state officials,⁣ including those from Virginia, Louisiana, ⁢Nebraska, and Oklahoma, ​among others. “Various government,‌ watchdog, and media reports have alleged that ⁢ [Shein’s] rise has been ‘made possible by forced⁢ labor, human rights violations, stealing other designers’ work and the peddling of⁢ clothing ⁢made ⁢with potentially hazardous materials.’”

While Shein initially declined to comment on reports⁣ alleging its materials were sourced‌ from China’s Xinjiang ‍province, the site of⁢ mass human rights abuses and ⁣forced labor camps, the company has recently touted its own‍ “third-party analyses” showing materials like cotton are not coming from​ this region.

The state officials say Shein’s claims cannot be ‍trusted ‌and that the ‍Biden administration needs‌ to ‌halt the company’s IPO until⁢ it ‍can prove its products are not made using Uyghur slave labor.

“American exchanges should​ have a zero-tolerance policy for foreign companies that seek access ⁢to our markets but refuse ⁢to follow our laws, especially when the​ implicated laws are meant to prevent serious human rights abuses,” the state officials write. “We‍ believe in upholding ⁤the‌ rule of law and protecting our economy.‌ Lip service is not‍ enough; in this case, the U.S.‍ Securities and Exchange Commission must ‘trust, but verify’ ⁣that every⁢ such ‌company is complying before it receives ⁣the privilege⁣ of being listed on ⁤an American securities ⁢exchange.”

Shein has ⁢also benefitted from ⁤a loophole in ‍American trade law “that allows importers to avoid customs duties on incoming packages that are valued at less⁢ than $800,” the attorneys general ‌note.

The House ⁢Committee on⁢ China, which ‍is investigating Shein’s business practices, ‍determined earlier this ​year that the company’s reliance on this loophole has allowed its shipments‌ into the ⁢United States to face less scrutiny by customs officials. Because⁣ of this, questions linger about whether Shein’s products⁢ are violating the Uyghur Forced Labor Prevent Act, a law meant to‌ stem the flow ‌of‌ such Chinese products into the country.

Shein, the state‍ attorneys say, “refuses to engage with U.S. government officials and is instead touting a purported self-financed and managed certification ⁤process that it⁣ claims demonstrates compliance‌ with U.S. law.”

But “such⁣ self-certification is insufficient,” they write, when‍ Shein ‍”has a documented history of lying about ​its labor practices.”

A 2021 ​Reuters investigation showed that Shein “falsely stated on its website that conditions in the factories ⁤it uses were certified by international labor standards bodies.”

Concerns over these‍ allegations has led Shein—like other Chinese companies such as ‌TikTok—to hire Washington, D.C.-based lobbyists “to whitewash its image,” according to ‍the state officials.

Shein ‍did not respond to ​a request for comment but has repeatedly denied using slave ​labor, telling NBC News in late June that its “policy is to comply​ with the customs and import laws ​of the countries in⁣ which⁣ we operate.”