New York — A congressional report published on Thursday sharply criticized popular Chinese retailers Sheen and Teemu, with lawmakers accusing them of failing to maintain even “the facade of a meaningful compliance program” built by forced labor Wants to stop selling the goods. platform.
In the report, the House Select Committee of the Chinese Communist Party said that Teemu’s business model essentially allows the company to escape responsibility in complying with US law that bars imports from China’s Xinjiang region unless the business can prove it is profitable. Do not assume that the items were made without forced labor.
“US consumers should be aware that TEMU’s supply chain is at high risk of contamination by forced labor,” the report said.
Teemu is owned by Pinduoduo Inc., a popular e-commerce site in China. is near. It was launched in the US last year and has grown in popularity due to its offering of cheap goods from China-based sellers ranging from apparel to household products.
The report is part of an ongoing congressional investigation into products offered to American consumers that may have been made in China with forced labor. As part of the investigation, the committee sent letters to brands Nike and Adidas as well as Sheen and Teemu in early May seeking information on their compliance with the anti-forced labor law.
The lawmakers noted that their investigation is not yet complete but that they want to quickly share some of their findings with the public.
The report states that TEMU has admitted that it “does not explicitly ban” the sale of goods from Xinjiang and “does not conduct any audits to positively check and report no compliance systems”. is” whether its suppliers are complying with US forced labor laws. It also said that the only preventive measure reported by the company was to get its suppliers to agree to “boilerplate terms and conditions” that prohibit the use of forced labor.
According to documents provided by Teemu to the committee, the company has more than 80,000 suppliers that fuel its vast e-commerce platform.
The report comes just months after representatives from “Shut Down Sheen,” an anonymous coalition of brands and human rights organizations, began meeting with congressional offices to increase the investigation into the fast fashion site.
Last week, two bipartisan bills were introduced in Congress that sought to change a century-old trade rule – known as de minimis – that benefits both Sheen and Teemu.
Under the provision, imported packages valued at less than $800 are tax exempt and receive less oversight from US Customs. The report says Teemu and Sheen ships almost all of its packages, most of which cost less than $800, from China directly to consumers. Typically, retailers ship overseas goods to a domestic warehouse, pay necessary taxes, and then deliver packages to consumers. It added that the two companies account for nearly half of all de minimis shipments, resulting in hefty tax exemptions and minimal inspections.
Lawmakers also criticized Sheen for relying on the provision.
Representative Mike Gallagher, a Wisconsin Republican who chairs the committee, said, “Temu and Sheen are building an empire around minimal loopholes in our import rules – evading import taxes and scrutiny on millions of goods sold to Americans.” Have been.” statement.
“We need to keep a close eye on this loophole that is being abused to tilt the playing field against American companies,” he said.
In a statement, Sheen said the company’s “policy is to comply with the customs and import laws of the countries where we operate.” It also said it has “zero tolerance” for forced labor and has implemented a robust system to ensure compliance with US law.
Teemu did not immediately respond to a request for comment.
