Missouri Attorney General Andrew Bailey has joined a coalition of 16 states in sounding the alarm on the business practices of SHEIN, a fast-fashion retailer founded in China. These practices include reports of forced labor and the company’s potential Initial Public Offering (IPO) later this year.
“As Attorney General, I have an obligation to ensure the integrity of Missouri’s marketplace for consumers throughout the state,” said Attorney General Bailey. “No foreign business has the right to enter the United States’ markets without complying with our laws. The SEC must audit and verify that SHEIN is following our rules, including the prohibition of forced labor in the making of its products.”
In a letter sent to Securities and Exchange Commission Chair Gary Gensler, Attorney General Bailey and representatives from other states urged the SEC to require any foreign-owned company to certify, through a truly independent process, that it complies with Section 307 of the Tariff Act of 1930. This act prohibits the import of any product manufactured wholly or in part by forced labor as a condition for being listed on a U.S.-based securities exchange.
The attorneys general pointed out that SHEIN has been credibly accused of exploiting forced labor and violating the Uyghur Forced Labor Prevention Act (UFLPA). Testing conducted by Bloomberg News last year found significant scientific evidence that cotton produced in the Xinjiang Autonomous Region was present in clothing sold by the company.
“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 those laws are meant to prevent serious human rights abuses,” the attorneys general wrote. “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 granting the privilege of being listed on an American securities exchange.”
The attorneys general also highlighted SHEIN’s exploitation of trends, which can blur the lines of intellectual property and copyright, and avoid customs duties that have contributed to its rapid growth. Additionally, the company collects a vast amount of data on American consumers, which it uses in complex algorithms to fine-tune its offerings and bring new products to market faster than its competitors.
In addition to General Bailey, the attorneys general of Alabama, Alaska, Arkansas, Georgia, Idaho, Iowa, Louisiana, Mississippi, Nebraska, North Dakota, Oklahoma, South Carolina, Tennessee, Utah, and Virginia joined the letter.
The full letter can be viewed by clicking or tapping here.
