On 12 December 2024, the new EU regulation prohibiting products made with forced labour from being sold on the Union market (the "Forced Labour Regulation") was published in the EU Official Journal, impacting businesses that sell any products into or from the EU from the end of 2027.1
The Forced Labour Regulation is the latest in a suite of laws requiring transparency and supply chain due diligence for economic operators in the EU.
Here are 8 things to know about the law, and steps companies can take now to prepare for its application.
1. A ban on all products made with forced labour
The Forced Labour Regulation prohibits:
- economic operators ( "any natural or legal person or association of persons"2 )
- from placing (e.g., importing for the first time) and making available (e.g., through distance/online sales) on the Union market, or exporting from the EU,
- all products made with forced labour3 (products sold online will be covered, if the offer for sale is targeted at consumers in the EU).4
The prohibition applies to all products sold in the EU, including their components, regardless of geographic origin or industry. This contrasts with sector and product-specific due diligence laws such as the EU Regulation on Deforestation (which applies to only specific products, such as cattle, cocoa, coffee, oil palm, rubber, soya and wood, and derivative products),5the EU Conflict Minerals Regulation (which covers tantalum, tungsten, tin and gold), or the EU Batteries Regulation, (which targets the responsible sourcing of cobalt, natural graphite, lithium and nickel). The EU approach of imposing a ban on all products from anywhere in the world, also differs from legislation against forced labour in other jurisdictions that focusses on geographic origin, such as the US Uyghur Forced Labour Prevention Act (see here).
2. ILO-aligned definition of "forced labour"
The Forced Labour Regulation aligns the definition of "forced labour" with the International Labour Organization conventions covering a wide variety of coercive labour practices, meaning "all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily"6, or as a means of coercion, discipline or discrimination.7
3. Covers the entire life cycle of a product
The prohibition is concerned with the entire life cycle of the product (and its components) which will be banned if forced labour has been used at any stage of their production, manufacture, harvest or extraction, in whole or in part, including working or processing related to the product at any of those stages.
4. No "additional" due diligence but due diligence guidance to be issued
The Forced Labour Regulation does not itself impose any "additional" due diligence obligations on economic operators besides those already provided for by EU and national law.8 It is intended to operate alongside the existing regulations and the EU Corporate Sustainability Due Diligence Directive, which will impose mandatory due diligence. However, the Forced Labour Regulation recognises that any due diligence carried out will be taken into account in case of an investigation (and could avoid the initiation of any such investigation).9
Within 18 months of the Regulation's entry into force, the European Commission will issue guidance for economic operators, which will include due diligence processes taking into account different types of suppliers along the supply chain and different sectors, and as well as guidance on best practices on bringing to an end and remediating different types of forced labour.10
5. Enforcement will start with risk-based investigations by competent authorities to identify potential violations
The relevant competent authority will conduct investigations to identify potential violations of the Forced Labour Regulation; prioritising such investigations based on a risk-based approach. The lead competent authority will be either the relevant member state's competent authority, by reference to the location of the suspected forced labour violation, or the Commission, if the alleged forced labour took place outside the EU.
When assessing the likelihood of a violation, the competent authority should consider: (i) the scale and severity of the suspected forced labour, (ii) the quantity or volume of the products on the EU market, (iii) the share of the part suspected to have been made with forced labour in the final product, (iv) the size and economic resources of the economic operators, and (v) the complexity of the supply chain.11
To aid their investigations, competent authorities will have access to, inter alia, databases of past cases of economic operators' (non-)compliance; risk indicators and reports prepared by international organisations (such as the ILO), and a non-exhaustive database (to be established by the Commission) of forced labour risks indicating where there is a reliable and verifiable evidence that products produced by a specific economic sector in particular geographic areas present a higher risk of having been made with forced labour.12
6. Decisions
The competent authorities will have the burden of proof for demonstrating a violation, and decisions as to whether a violation has occurred or not should be reached within 9 months.13 Where the competent authority determines that an economic operator has violated the Forced Labour Regulation, they shall "without delay" adopt a decision which contains any or all of the following:
- A prohibition to place or make available the products concerned on the EU market and to export them.
- An order for the economic operator subject to the investigation to withdraw the products concerned or to remove related content promoting or listing the products online.
- An order for the economic operator to dispose of violating products
Where only parts of a product are found to be in violation, if the part is replaceable, the economic operator will be ordered to dispose of and replace any prohibited component(s), but otherwise maintain the product. However, if the product is of strategic or critical importance, then the competent authority may refrain from imposing an order to dispose of the product but instead order for it to be withheld for the time necessary to eliminate the forced labour.14
There are clear warnings for companies to collate information and cooperate. The competent authority may reach an adverse decision against an economic operator, where it was not otherwise possible to gather credible information during the investigation due to its refusal (without valid justification) to provide the information requested within the prescribed time period, or if it provided incomplete, incorrect, or misleading information intended to hinder the investigation.15
7. Consequences of non-compliance
Economic operators affected by a decision can request that it be reviewed. However, if the decision is upheld, penalties (which could include fines) will be imposed for non-compliance.
Competent authorities must impose penalties which are "effective, proportionate and dissuasive", taking into account mitigating or aggravating factors like: the gravity and duration of non-compliance, any previous infringements of the economic operator, and the degree of cooperation between the economic operator and the competent authority.16
8. Timeline from 2024-2027
The Forced Labour Regulation entered into force on 13 December 2024 (one day following its publication in the EU Official Journal) and:
- Within 12 months, the Member States shall confirm their designated competent authorities to the Commission and other Member States, which will be made publicly available on the Forced Labour Single Portal;17
- Within 18 months, the Commission will publish guidelines and create the necessary non-exhaustive, evidence-based databases for its application;18 and
- After 36 months, the Forced Labour Regulation will become applicable, i.e, from Q4 2027.19
What economic operators can do now to prepare
Economic operators can take active steps today to prepare for Q4 2027 by taking action to adopt and promote ethical business practices and policies within their organisation. That action will include:
- Reviewing and implementing policies and practices addressing forced labour, including supplier codes of conduct, procurement policies with clear supplier on-boarding procedures, and on-going due diligence questionnaires and audits.
- Considering including clauses addressing modern slavery in supply agreements.
- Assessing the full supply chain of products marketed in the EU, for every stage of the process, maintaining clear records of the upstream process.
- Establishing responsibility within the company for steps to address forced labour, with external input from legal counsel, social auditors or other third parties.
- Creating and implementing monitoring and remediation measures where violations are identified.
- Providing updated training on modern slavery to employees, especially those in senior management positions, and procurement.
Ruth Benbow (Knowledge Manager, London) assisted in the development of this publication.
1 Regulation (EU) 2024/3015 of the European Parliament and of the Council of 27 November 2024 on prohibiting products made with forced labour on the Union market and amending Directive (EU) 2019/1937 ("Forced Labour Regulation"), available here, Article 39: applies 36 months after entry into force.
2 EU Forced Labour Regulation, Article 2(9).
3 EU Forced Labour Regulation, Article 3.
4 EU Forced Labour Regulation, Article 4.
5 Our client alert on 10 Things to Know About the New EU Deforestation Regulation is available here: 10 key things to know about the new EU Deforestation Regulation | White & Case LLP. Also see our client alert on European Commission proposes one-year delay to implementation of EU Deforestation Regulation, available here.
6 Forced Labour Regulation, Article 2(1), referring to Article 2 of the Convention on Forced Labour, 1930 (No. 29) of the International Labour Organization, including forced child labour.
7 Forced Labour Regulation, Article 2(2), with reference to Article 1 of the Convention on the Abolition of Forced Labour, 1957 (No. 105) of the International Labour Organization.
8 EU Forced Labour Regulation, Article 1(3).
9 EU Forced Labour Regulation, Article 17(1) and (5).
10 EU Forced Labour Regulation, Article 11(a) and (b).
11 EU Forced Labour Regulation, Article 14.
12 EU Forced Labour Regulation, Article 14(3).
13 EU Forced Labour Regulation, Article 20(1).
14 EU Forced Labour Regulation, Article 20(5).
15 EU Forced Labour Regulation, Article 20(2).
16 EU Forced Labour Regulation, Article 37.
17 EU Forced Labour Regulation, Article 5.
18 EU Forced Labour Regulation, Article 11.
19 EU Forced Labour Regulation, Article 39.
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