Lawmakers Urge SEC to Require Shein Prove it Doesn’t Use Forced Labor Before a U.S. IPO

Shein again finds itself under the radar for the alleged use of forced labor.
Photo credit: VeNN -

A bipartisan group of 22 lawmakers from the U.S. House of Representatives has issued a letter to the Securities and Exchange Commission, urging the market regulator to require that Shein certify that it does not use Uyghur forced labor before the company is allowed to launch a U.S. IPO.

While it has been reported by multiple sources that Shein is preparing for an IPO later this year, the company has thus far publicly denied these plans.

“Established in Nanjing, China in 2008, and now headquartered in Singapore, Shein has grown rapidly to become the world’s largest fashion retailer with an estimated value of $64 billion,” reads the letter. “Shein’s growth is attributed to a business model that harvests vast amounts of consumer data using complex algorithms and manipulates an enormous supply chain across China to manufacture goods rapidly to meet consumer demand.”

The letter goes on to state that while Shein claims its products do not use Uyghur forced labor, “there are credible allegations of the company’s use of underpaid and forced labor in the Xinjiang Uyghur Autonomous Region (XUAR).” Goods manufactured in that area of China are not entitled to entry into the U.S. under the 2021 Uyghur Forced Labor Prevention Act.


“As a global company, Shein takes visibility across our entire supply chain seriously,” a Shein spokesperson told CNBC. “We are committed to respecting human rights and adhering to local laws and regulations in each market we operate in. Our suppliers must adhere to a strict code of conduct that is aligned to the International Labour Organization’s core conventions. We have zero tolerance for forced labor.”

The bipartisan letter is led by Representatives Jennifer Wexton (D-Va.) and John Rose (R-Tenn.). Wexton also is the sponsor of the bipartisan Uyghur Forced Labor Disclosure Act, which would require publicly traded companies to certify that imports of goods and materials that originate in or are sourced in part from the Xinjiang region of China are not tainted by the use of forced labor.

“While Shein claims its products do not utilize Uyghur forced labor and it works with third parties to audit its facilities, experts counter that these types of audits are easily manipulated or falsified by state-sponsored pressure,” the lawmakers wrote. “Other experts argue that it is appropriate to presuppose that any product made in the XUAR is made with forced labor.”

The lawmakers are urging the SEC to require independent verification, “free from state influence,” that the company does not use forced labor before it can register on the U.S. exchange.

“We strongly believe that the ability to issue and trade securities on our domestic exchanges is a privilege and that foreign companies wishing to do so must uphold a demonstrated commitment to human rights across the globe,” wrote the members.

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