DOJ & Homeland Security called to probe Shein, Temu for counterfeiting

DOJ & Homeland Security called to probe Shein, Temu for counterfeiting

A company team ensures that sellers comply with the policy, and takes swift action if they do not, a spokesperson said previously.

U.S. Republican Senator Tom Cotton of Arkansas has sent a letter to Attorney General Pam Bondi calling for the U.S. departments of Justice and Homeland Security to probe online retailers Shein and Temu, which ship most of their merchandise from China, for large-scale intellectual property (IP) theft and counterfeiting.

The letter adds to the growing scrutiny of Shein and Temu, which both sell $20 shirts and $10 accessories, after the end of a U.S. trade exemption that helped both companies gain popularity in the region. Temu is owned by PDD Holdings while Shein is privately held.

Shein and Temu did not immediately comment on the letter sent by Cotton.

In July, the European Commission said that Temu was breaking European Union rules by not doing enough to prevent the sale of counterfeit goods on its platform. At the time, the company said that it would fully cooperate with the Commission.

Earlier, Shein said that it needs its suppliers to certify that their products do not infringe on a brand’s intellectual property and that they are not counterfeit. A company team ensures that sellers comply with the policy and takes swift action if they do not, a spokesperson said previously.

With the ending of the de minimis exemption – which allowed packages shipped directly to shoppers valued at under $800 to enter the U.S. duty-free - “Shein and Temu have been forced to change their business model,” Cotton said in his letter.

Cotton reportedly said, “These companies now stock massive inventories in U.S. warehouses and distribution centers. Their goods are no longer slipping through ports. They are sitting on American soil under U.S. jurisdiction.”

On Monday, Texas attorney General Ken Paxton said that he is probing whether Shein violated state law related to unethical labor practices and the sale of unsafe consumer products. Last week, France asked a Paris judge to suspend Shein in the country for three months over sales of childlike sex dolls and banned weapons.