The supply chain of popular Chinese-based retailer Temu likely relies on forced labor, a House committee investigation has found.
The House Select Committee on the Chinese Communist Party published a report on Thursday that determined Temu and another company, Shein, have skirted processes designed to prevent human rights violations.
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Temu has no auditing process or compliance requirements to ensure products are not being produced with Uyghur forced labor and not, by extension, in violation of the Uyghur Forced Labor Prevention Act, the committee's report states. Its only measure to prevent such labor abuses is to require sellers to agree to the “Third party code of conduct” on its website, which includes boilerplate language.
"These initial and interim findings — which reveal Temu’s failure to maintain even the facade of a meaningful compliance program, and the true scale of both Shein and Temu’s use of the de minimis provision — raise serious concerns about the continued presence of products made with forced labor contaminating American imports," the findings said. "American consumers should know that there is an extremely high risk that Temu’s supply chains are contaminated with forced labor."
Representatives from the company also acknowledged that it “does not expressly prohibit third-party sellers from selling products based on their origin in the Xinjiang Autonomous Region,” which is where the minority Uyghur Muslim community has been forced to endure abuses at the hands of the Chinese.
The committee also looked into Shein, another retailer from China. Both companies use the de minimis provision of customs law that allows for duty-free shipments up to $800 into the country. Temu and Shein are responsible for about 30% of all packages shipped to the United States under this provision, while nearly half come from China.
"SHEIN has provided detailed information to the Select Committee and will continue to engage transparently with Members to answer their questions," a Shein spokesperson told the Washington Examiner. "We have zero tolerance for forced labor and have implemented a robust system to support UFLPA compliance, which includes a code of conduct, independent audits, robust tracing technology and third-party testing. We have no contract manufacturers in the Xinjiang region. If any cotton from an unapproved region is detected, we take immediate action such as suspending production, halting shipments to the United States and removing product listings."
"As a global company, our policy is to comply with the customs and import laws of the countries in which we operate," the spokesperson continued. "SHEIN continues to make import compliance a priority, including the reporting requirements under U.S. law with respect to de minimis entries."
All of Temu's products cost less than $800, according to the report, meaning every product the company ships to the U.S. would fall under the de minimis provision.
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"These results are shocking: Temu is doing next to nothing to keep its supply chains free from slave labor," committee Chairman Mike Gallagher (R-WI) said in a statement. "At the same time, Temu and Shein are building empires around the de minimis loophole in our import rules — dodging import taxes and evading scrutiny on the millions of goods they sell to Americans. We need to take a hard look at this loophole that is being abused to tilt the playing field against American companies."
The report is a part of the committee's investigation into major companies that produce goods in China, including Nike and Adidas. The committee affirmed that Thursday's findings were "interim," not definitive.