16 AGs Caution SEC Over SHEIN's Potential IPO and Alleged Business Practices

  • Montana AG Austin Knudsen, joined by AGs from 15 other states, sent a letter to the SEC voicing concern regarding the possible Initial Public Offering of SHEIN, a fast-fashion retail giant affiliated with China.
  • The AGs mention how several governmental, watchdog, and media sources have suggested SHEIN’s involvement in forced labor, human rights transgressions, intellectual property infringements, and the distribution of potentially harmful products. Additionally, the AGs allege that the company has capitalized on the “de minimis exception” of the Tariff Act of 1930, letting them dodge customs duties on items valued under $800. The letter also cites to accusations of SHEIN’s involvement in forced labor and alleged violations of the Uyghur Forced Labor Prevention Act.
  • The AGs urge the SEC to demand foreign-owned companies, such as SHEIN, to certify through an independent process that they are compliant with Section 307 of the Tariff Act of 1930, which strictly prohibits the import of products manufactured entirely or partly by forced labor. Furthermore, they recommend that the SEC inform national securities exchanges of this requirement, emphasizing that the U.S. should have a zero-tolerance policy for foreign firms that sidestep American laws, especially those addressing human rights.