Bloomberg News sent out Shein clothing for a laboratory test. The result? The German lab, Agroisolab GmbH, found that the carbon, hydrogen and oxygen isotope ratios indicated that the Uyghur Region was the likely origin and that 95% of other possible cotton regions were definitely not the source.
Agroisolab uses isotope testing to trace source origins. The same method is used by the London based lab Oritain – which is currently employed by Shein. While Oritain claims they are helping Shein ensure a “robust and traceable supply chain”, the company has refused to test Shein products for Bloomberg or share any existing results it has for Shein.
The “747 loophole”
The U.S. has implemented a first of its kind import ban on products from the Uyghur Region which other countries are being urged by activists to adopt.
In August and September, Customs officials said they’d either seized, prohibited or held for further documentation 1,329 shipments of goods into the US with a value of more than $425.5 million “for suspected use of forced labor,” including goods subject to the UFLPA. Seizures or prohibitions of goods from Xinjiang for the fiscal year that ended in September accounted for almost half of the 3,000 total and were valued at $500 million, according to the Customs agency.
While $500 million is a sizeable amount, Customs might be missing millions of forced labor goods. It turns out the Uyghur Forced Labor Prevention Act has a loophole “big enough to drive a 747 through.” This is the de minimis rule that allows imports below $800 to enter the U.S. without Customs and Border Protection (CBP) scrutiny.
Shein famously sells cheap goods directly from China and so does not trigger CBP reporting requirements. This should be cause for concern for a government that claims to have no tolerance for Uyghur forced labor. According to Bloomberg, Shein’s U.S. orders have soared by 568% between 2020 and 2022 alone and 2.7 million of these low value packages arrive in the U.S. daily.
Still a long way to go
Shein is so popular in the U.S., the company has confirmed that it will be opening distribution centers in there soon.
Advocates want the CBP needs to treat all Shein shipments as suspect but until this legislative gap is addressed, Shein will continue to profit in the U.S. American law makers must decide how to address this defect in its forced labor system.
While some companies are trying to diversify their cotton sources, if others can get by legally it is only a matter of time before others follow suit as it must cost less than to reroute production lines.
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