Huge problem with Temu and Shein products discovered

Authorities in Seoul recently inspected 144 products from Shein, Temu, and AliExpress and found toxic substances at levels far higher than legal limits, AFP reports.

One product — a pair of shoes sold by Shein — was found to contain high levels of phthalates, which are used to increase the flexibility of plastics. One pair contained concentrations 229 times above the legal limit.

“Phthalate-based plasticisers affect reproductive functions such as reducing sperm count, and can cause infertility and even premature birth,” said an official from Seoul’s environmental health team.

One of the chemicals is considered a human carcinogen by the International Cancer Institute.

“Special care should be taken to avoid long-term contact with the human body,” they added.

Authorities also found that some caps sold by Shein contained formaldehyde at double the allowable threshold. At the same time, two bottles of nail polish had dioxane at more than 3.6 times the legal limit.

Dioxane is also considered a human carcinogen, and it can cause liver poisoning.

Shein told AFP that it works with international third-party testing agencies to conduct risk-based sampling tests to ensure its products meet safety standards.

Seoul authorities also found that sandals from Temu had insoles containing lead at concentrations 11 times the legal limit.

The officials have asked for the products to be removed from sale.

MyBroadband asked the retailers for further comment. Temu said it immediately removed the identified products from its global marketplace listings.

“Upon receiving the notice from the Seoul city government, we immediately launched an internal investigation,” a spokesperson said.

“Of the 11 products identified, two items — a pair of sandals and a hat — were from Temu.”

They added that these were removed from its product listings and that Temu is enhancing its systems and guidance to merchants to ensure they comply with safety standards and local regulations.

Shein did not immediately respond to a request for comment.

Shein has been available in South Africa for a few years now, while Temu is a relatively new entrant. It launched locally in January 2024.

Both e-commerce platforms have seen immense growth in 2024. However, local retailers accused them of exploiting import tax loopholes to undercut local clothing prices.

South African Revenue Service (Sars) commissioner Edward Kieswetter has committed to cracking down on the Chinese retailers.

Sars previously committed to implementing a new import duty on 1 July 2024 to address the issue. However, it delayed its implementation, citing a need for more stakeholder engagement.

However, in an announcement from Friday, 9 August 2024, Sars said it would implement interim tax changes for e-commerce players from 1 September 2024.

Shein and Temu’s local distribution partner, Buffalo International Logistics, currently benefits from a years-old concession that allows it to pay a flat monthly rate of 20% on clothing imports.

From 1 September, Sars will charge value-added tax (VAT) on top of the flat 20% duty the importers currently pay. It will implement further, permanent changes in November.

It noted “legitimate concerns” regarding the import of goods, particularly clothing, via e-commerce.

“A number of importers have not been paying the obligatory customs duties and VAT on these imports, resulting in unfair competition with other industry players,” said Sars.

To combat these challenges, the tax collector is adjusting its practices to better align with the World Customs Organisation (WCO) framework.

In the early 90s, the WCO established release/cleared procedures aimed at standardising the processing of e-commerce goods, and categorise goods into four distinct categories.

Category 1 — Correspondence and documents — No commercial value, not subject to duties and taxes, immediate release based on a consolidated declaration that may be oral or written (a manifest, a waybill or an inventory of such items).

Category 2 — Low-value consignments below a specified de minimis threshold for which no duties and taxes are collected and immediate clearance and release against a manifest, a waybill, a house waybill, a cargo declaration, or an inventory of items.

Category 3 — Low-value dutiable consignments (simplified goods declaration) — goods above de minimis, but below full declaration value threshold, dutiable, and the use of a simplified declaration, or release against a manifest with subsequent simplified clearance, etc.

Category 4 — High-value consignments (full goods declaration) — Consignments not falling under the three categories described above and include consignments containing goods that are subject to restrictions. Normal release and clearance procedures, including payment of duties and taxes, apply.

From 1 November, Sars will reconfigure the 20% flat rate into the WCO for the first three categories.