Open letter
To Mrs. Ursula von der Leyen
President of the European Commission
Berlin, 09. September 2024
Regarding Shein & Temu Tax Avoidance and Market Distortion in the EU
Dear President von der Leyen,
As a European Climate Pact Ambassador and the co-founder and CEO of Faircado, a German circular economy startup, I am deeply concerned by the great threat posed by ultra-fast-fashion companies like Shein and Temu to the EU’s health, economy, and climate targets. Their unchecked business practices severely undermine the health of European consumers, our environmental efforts, and our democratic integrity.
Shein is a threat to consumers’ health
The health risks posed by Shein and Temu are well-documented. Recently, two leaders of the U.S. Consumer Product Safety Commission called for an investigation into both companies after “deadly baby and toddler products” were sold on their websites. Further, a Greenpeace report highlighted that 15% of products tested from the Shein website contained dangerous chemicals exceeding the EU’s REACH standards, with some surpassing the limits by over 100%. In South Korea, authorities discovered Shein clothing containing carcinogenic substances hundreds of times above the legal limit. This is particularly concerning given Shein’s young target demographic, who are especially vulnerable to toxic chemical exposure.
In April, the European Union already took an important step by adding Shein to its list of digital firms, big enough to adhere to stricter safety rules, including measures to protect customers from unsafe products. We demand stronger action to protect consumers by enforcing EU laws on hazardous chemicals and sustainable practices as outlined in the Textiles Strategy.
A Threat to Workers
Shein’s impact extends far beyond consumer safety; threatening worker’s welfare. Employees are working 70+ hour weeks in exploitative and unsafe conditions, often with only one off-day per month, including forced labour in China’s Uyghur region, as well as child labour allegations, as reported by Public Eye. Such practices violate basic human rights and perpetuate exploitation, requiring a stronger regulatory intervention from the EU to hold these companies accountable.
A Threat to the Planet
Shein’s business model is inherently unsustainable. Greenpeace Germany reports that Shein is responsible for 22% of the CO2 emissions of French teenagers, and its greenhouse gas emissions are constantly rising. From 9.17 million metric tons of CO2e in 2022 to 16.68 million in 2023. Over 99% of these emissions stem from the company’s supply chain, driven by a relentless production cycle pushing out up to 10,000 new products per day, while their use of mixed synthetic fibres makes recycling difficult. The EU must act to curb such destructive practices and prioritise a sustainable future for our planet.
A Threat to the European Economy and Democracy
Shein and Temu also pose significant economic and democratic threats to the EU by exploiting loopholes like the €150 duty-free exemption, flooding markets with low-quality, and often hazardous, products, putting local businesses at a disadvantage. The Social Democratic Party of Germany has called for the EU to reorganise import regulations, to reduce the substantial tax revenue loss due to tax fraud by these companies. Additionally, Shein’s enlistment of lobbying services from a former European Commissioner, Günther Oettinger, to avoid new regulations on ultra-fast-fashion, is a troubling indication of their attempts to manipulate and circumnavigate our democratic processes.
Further Shein’s potential £50 billion UK Stock Exchange listing has raised serious ethical concerns regarding transparency and labour practices. Unchecked, these activities undermine our economic and social values and encourage further exploitation. Given these serious threats, we urge the European Commission to take immediate action to protect consumers, workers, and the environment by expediting the reforms proposed in May 2023, including abolishing the €150 exemption and implementing stricter checks on parcels from platforms like Shein and Temu to prevent tax avoidance and exploitation.
Additionally, the Commission should consider a ban on these platforms within the EU, similar to India’s 2020 ban.
Preventing the sale of dangerous and low-quality goods, plus enforcing stricter regulations on hazardous chemicals helps safeguard public health, ensures fair competition, and supports the EU’s sustainability targets. We need decisive action to achieve this and fulfil the vision outlined in the EU’s 2020 Circular Economy Action Plan. I believe that under your leadership the EU can uphold our values, protect fair competition, and lead the way toward a circular economy.
Thank you very much for your attention.
Yours sincerely,
Evolena de Wilde d’Estmael in the name of Faircado
