Marco Rubio Urges ‘Extraordinary’ SEC Scrutiny of Fast Fashion Giant Shein

Sen. Marco Rubio (R-Fla.) called U.S. Securities and Exchange Commission Commissioner Gary on Thursday after reports that Chinese online retailer Shein was selling women’s clothing at deep discounts.・A letter was sent to Mr. Gensler. He is seeking an initial public offering (IPO) on the U.S. stock market, warning that the company is subject to the “whims” of the Chinese government and is a threat to investors.

“Investors have a right to know the truth about SHEIN. As a China-based issuer, SHEIN is subject to enhanced disclosure requirements and review by the SEC,” Sen. Rubio wrote. letter. He continued:

As you review SHEIN’s registration statement and related documents, we ask that you request additional disclosures from SHEIN about its operations and relationships with China. [People’s Republic of China] and the Communist Party of China [Chinese Communist Party]and the serious risks of doing business in China.

Shane became In 2022, it became the world’s largest online-only fashion vendor, with sales of $100 billion that year, and its influence and profitability have only grown since then. As of 2023, the company will person in charge Most “fast fashion”, or cheap, mass-produced clothing, is purchased in the United States. The company primarily markets to young American women, maintains a large presence on social media sites such as Instagram, and pursues “native” advertising. invite Instagram and TikTok “influencers” tour Chinese facilities and generate positive content about the company.

Extensive evidence suggests that the company has dwarfed competition through a combination of intellectual property theft, slave labor, and exploiting loopholes in U.S. shipping regulations, all thanks to collaboration with the Communist Party. It was made possible by

report surfaced In November, Mr. Schein announced that he had “confidentially” filed for an IPO with the SEC. The process of obtaining an IPO has been a long process and is reportedly still ongoing.In January, as the process continued, anonymous sources told Reuters that in addition to seeking SEC approval, Mr. I was demanded to Permission from the Chinese Communist Party to file for an IPO in the United States. Headquartered in Singapore, Shein sought to appear to have a “global” identity, but reports said the company still needed permission from the Chinese government to engage in major international business activities. The attempt was damaged.

“Reports indicate that SHEIN has approached regulators in the People’s Republic of China (PRC) to obtain approval for an IPO,” Rubio wrote in a letter to the SEC commissioner, adding, “This disclosure… “It has become virtually certain that the Chinese government will censor SHEIN’s information.” He has filed documents to conceal from U.S. regulators and investors relevant information about the scope and nature of his business in China and the risks of doing business there. ”

Rubio said the SEC should “require special disclosures from SHEIN about its structure and relationships with the Chinese government and the Chinese Communist Party (CCP)” given its apparent close ties to the regime. wrote.

Sen. Marco Rubio (R-FL) (ANDREW CABALLERO-REYNOLDS/AFP/Getty Images)

“SHEIN’s activities in China mean that it is subject to the whims of the Chinese government, and by extension the Chinese Communist Party (CCP). In short, SHEIN is not a ‘global’ company. It is a company based in China,” the senator wrote, continuing:

If there was any doubt that SHEIN is a China-based company, a recent news article shows that the company is in talks with the China Securities Regulatory Commission (CSRC) to approve its IPO in the United States. It was revealed that he had approached the Cyberspace Administration of China (CAC). These Chinese regulators are reportedly in talks with the company’s senior executives about the IPO. They are also investigating SHEIN’s data security practices to prevent information about the company’s employees, suppliers and contract manufacturers from leaking outside China.

“SHEIN’s cooperation with Chinese regulators raises serious doubts about the completeness and accuracy of its IPO filing,” Rubio wrote. “As I have written to you in the past, the very same regulators are ordering Chinese companies to mislead U.S. authorities and investors about the risks of doing business in China.”

The letter cited several issues for the IPO, including the “recognition that the majority of SHEIN’s business is conducted within China” and the recognition of evidence that Shein sold products that may have been tainted by slavery. It concludes with recommendations regarding what information the SEC should request from Shein. And that’s stealing an artist’s intellectual property.

China is currently carrying out genocide against the indigenous people of occupied East Turkestan, which it administers as the “Xinjiang Uighur Autonomous Region.” Part of that genocide included the incarceration of millions of people in concentration camps, many of whom were transported to factories, farms, and other facilities to be used as slaves. China claims that the concentration camps are “vocational and educational training” centers, and that the slaves sent to do grueling labor for regime-affiliated companies are “graduates” of the centers.

Many of the imprisoned Uyghurs and other community members in East Turkestan are engaged in cotton picking. East Turkestan produces about 84 percent of its cotton from China. represent 1/5th of global market share.

In 2020, the Uyghur Regional Forced Labor Eradication Coalition, consisting of approximately 200 human rights and labor organizations, stated that due to the prevalence of “Xinjiang cotton” in the fashion market, “nearly all major apparel brands and retailers that sell cotton are selling products from China. “They are potentially involved in slavery orchestrated by the regime.”

“Currently, any brand sourcing apparel, textiles, yarn or cotton from the Uyghur region is profiting from human rights violations, including forced labor, not only in the Uyghur region but across China more broadly. Almost certainly,” the coalition report declared. .

2022, Bloomberg News revealed Laboratory testing of Shine products revealed that Xinjiang cotton was found in the company’s clothing. Mr. Shayne denies profiting in any way from slavery. A report released in June by the House Select Committee on the Communist Party of China found that products sold by Shein and another Chinese e-commerce platform, Temu, were selling slavery-tainted products to Americans “in extreme cases.” concluded that there was a “high risk”.

This photo illustration shows the Shein app on the App Store reflected in the Temu logo on February 23, 2023 in Washington, DC.  (Photo by Stefani Reynolds / AFP) (Photo by STEFANI REYNOLDS/AFP via Getty Images)

This photo illustration shows the Shein app on the App Store reflected in the Temu logo in Washington, DC, on February 23, 2023 (STEFANI REYNOLDS/AFP via Getty Images).

The Uyghur Forced Labor Prevention Act (UFLPA), which went into effect in June 2022, prohibits companies from importing products from East Turkestan into the United States unless they can prove that the products are not contaminated by slave labor. This law only applies to shipments valued at $800 or more, known as exceptions. De minimis. As of April 2023, the average Shein parcel is worth just $11, and even if made from Uyghur slaves or Xinjiang cotton, it is unlikely to be shipped from East Turkestan to the United States.

Mr. Rubio, who introduced UFLPA, also introduced a bill in the Senate to end it. minimal loophole.

“Congress needs to pass the bipartisan Import Security and Fairness Act to fully close this loophole on imports from China,” Rubio told Breitbart News this week. “Every day we wait, millions of shipments from Communist China are flooding into our country, putting American customers at risk and undermining American business.”

Shein also faces an extortion lawsuit by artists who allege the company stole designs and manufactured clothing, depriving original creators of profits.

“Mr. Shayne has amassed wealth through repeated personal violations as part of a long and ongoing pattern of extortion that shows no signs of slowing down,” plaintiffs’ lawyers said in July. “It is no exaggeration to say that Shayne’s pattern of illegal activity includes new copyright and trademark violations every day.”

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