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China’s Ministry of Commerce announced on Tuesday that it is launching an investigation into PVH Group, the parent company of Calvin Klein, over alleged disruptions in its Xinjiang supply chain. This probe is part of China’s “unreliable entities” list mechanism, similar to the U.S. Commerce Department’s entity list. The U.S. Commerce Department also recently announced plans to ban the import or sale of cars with specific hardware or software linked to China or Russia.

PVH now has 30 days to respond to the allegations made by the Chinese Commerce Ministry, which accuses the company of targeting Xinjiang suppliers in violation of market principles. PVH responded by stating that they strictly comply with all relevant laws and regulations. This move comes as part of a larger trend where foreign retail companies are facing scrutiny in China over their connections to alleged forced labor in Xinjiang.

In a corporate responsibility report from July 2022, PVH stated that Xinjiang is one of the regions where they do not permit direct or indirect sourcing. Despite challenging consumer environments in Asia Pacific, particularly in China and Australia, PVH’s international revenue for Calvin Klein and Tommy Hilfiger fell by 4.3% year-on-year to $1.38 billion. Xinjiang, home to the Uyghur Muslims, has been at the center of controversy with allegations of forced labor and human rights abuses. China denies these allegations, stating that the facilities in Xinjiang are vocational training centers.PVH will have to address the allegations and comply with the relevant regulations set by the Chinese Ministry of Commerce.

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