EU Forced Labor Regulation: A Major Step Against Forced and Child Labor
The Council of the EU adopted the EU Forced Labor Regulation (EUFLR) on Tuesday, 19th November. This marks the last step in the legislative process. The EUFLR will enter into force on the day following its publication in the Official Journal of the European Union and will start to apply 3 years after the date of entry into force.
The EUFLR prohibits any products that are made, in whole or in part, using forced labor from being placed on, imported, or exported from the EU market.
Only this year, the ILO estimated that forced labor provides an annual, illegal, profit of $236 billion. With nearly 28 million individuals subjected to forced labor—86% of whom are in the private sector—this regulation adds to a growing number of laws aimed at combating forced and child labor globally.
Key elements of the new regulation
Scope of the regulation:
Applies to all products imported into, sold in, or exported from the EU.
Covers all economic operators, regardless of size, including e-commerce.
Encompasses all stages of production, from raw materials to final products.
Assessment of violations:
Competent authorities will evaluate the likelihood of violations based on specific criteria, including:
The scale and severity of suspected forced labor, including state-imposed forced labor.
The quantity or volume of products available on the EU market.
The proportion of a product likely made with forced labor.
The proximity of economic operators to suspected forced labor risks in their supply chains and their ability to address these risks.
Database and guidelines:
The Commission will create and regularly update a database of high-risk products and regions to assist in identifying potential violations.
Guidelines will be issued to help operators comply with the regulation.
Investigation procedures:
Member states will conduct investigations for cases within the EU, while the EU Commission will handle cases outside the EU. The investigations will follow a structured process: submission, preliminary investigation, full investigation, and decision.
Consequences of non-compliance:
Non-compliant products must be withdrawn from the market and can be destroyed, donated, or recycled (re-exportation is not permitted).
Centralized reporting portal:
The Commission will establish a single portal for reporting cases, databases, and investigation decisions related to forced labor.
Disclosure requirements:
A Delegated Act will outline the information operators may need to disclose to competent authorities.
Preparing for the New Regulation
Companies now have three years to prepare for this new ban. Many may have already begun their compliance efforts due to existing laws aimed at eliminating forced labor, such as the UK Modern Slavery Act, the Canada Modern Slavery Act, the German Supply Chain Law, and the EU Corporate Sustainability Due Diligence Directive.
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