Dive Brief:
- Shein is participating in the U.S. Customs and Border Protection’s Section 321 Data Pilot program, which involves submitting detailed import data for its packages and shipments entering the U.S. This is part of Shein’s broader initiative to improve transparency and ensure the safe flow of goods.
- The Section 321 Data Pilot program, aimed at enhancing the identification of illegal and hazardous goods, also seeks to expedite the delivery of legitimate, low-value e-commerce parcels.
- Shein emphasized that its involvement in the pilot reflects its dedication to “rigorous transparency,” showcasing its efforts to align with U.S. customs regulations.
Dive Insight:
Shein, a major player in the fast fashion industry, has come under intense scrutiny from lawmakers due to its import practices. The company’s low-priced items have often bypassed certain import tariffs and customs reviews, leveraging a provision in the Tariff Act of 1930 known as the de minimis exception. This loophole allows for small shipments, valued below a certain threshold, to avoid customs review, raising concerns about product safety and potential violations.
Shein and its competitor, Temu, have faced increased scrutiny over these practices, particularly regarding forced labor allegations and insufficient product checks. To counter these concerns, Shein has voluntarily joined the Section 321 Data Pilot program, providing greater transparency about its shipments.
By submitting detailed import data, Shein aims to alleviate the burden on U.S. Customs and Border Protection (CBP), helping the agency prioritize its resources to focus on identifying misuse of the import process. This move is expected to improve the efficiency of customs operations and protect U.S. consumers from hazardous or illegal products.
Donald Tang, Shein’s Executive Chairman, stated that by sharing comprehensive details about each shipment, the company intends to “help ease CBP’s burdens” and improve the overall flow of legitimate goods while maintaining the safety of U.S. markets. According to Shein, this initiative will ensure that U.S. consumers can continue to access affordable products without compromising safety.
As part of the data pilot, Shein has already provided the necessary import data for its first 30 days of participation. CBP has confirmed that it successfully processed this data, marking a significant milestone in the partnership.
The Biden-Harris administration, which has expressed concerns over the de minimis provision, may soon implement changes to limit its scope. An overhaul of the de minimis rule could be on the horizon before the next presidential term begins, potentially reshaping the future of e-commerce imports and further scrutinizing companies like Shein.
Shein’s involvement in the Section 321 Data Pilot program is also part of the company’s broader strategy to clean up its image after facing legal and regulatory challenges. Over the past few months, Shein has made notable strides in improving its corporate responsibility efforts. These include the creation of two independent advisory boards focused on sustainability and corporate responsibility, and the certification of its waste management practices at its Guangzhou-based Center of Innovation for Garment Manufacturing.
This transparency-driven approach aligns with Shein’s ongoing efforts to address public concerns and regain consumer trust. By participating in the Section 321 Data Pilot program, Shein is signaling its commitment to upholding high standards in its operations and contributing to a safer, more efficient global trade system.
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