EU's Journey to Ban Forced Labor Products

Forced labor remains a persistent global issue, affecting millions of individuals across various industries. Recognizing the need for stronger enforcement, the European Union (EU) has taken a decisive step by adopting the Forced Labour Regulation (FLR), which officially entered into force on December 13, 2024, and will start applying on December 14, 2027. This regulation bans products made with forced labor from entering, being sold within, or being exported from the EU.

Unlike previous corporate sustainability laws such as the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD), the FLR applies directly to companies without the need for additional national legislation.

Scope of the EU Forced Labour Regulation (FLR)

The FLR is one of the most ambitious forced labor bans globally, targeting any product made with forced labor at any stage of production, regardless of whether forced labor occurs inside or outside the EU. The regulation applies to:

• All companies operating in the EU, whether they manufacture, import, export, or sell products online.
• All products, whether fully or partially made using forced labor, covering raw materials, components, and final goods.
• All supply chain stages, including extraction, harvesting, production, and assembly.
• Both EU-based and non-EU businesses, meaning any company engaging with the EU market must comply.

The definition of forced labor under the FLR aligns with the International Labour Organization (ILO) Convention No. 29 (Forced Labour Convention, 1930), which includes forced child labor.

Enforcement and Compliance Mechanisms

1. Competent Authorities and Risk-Based Approach

Enforcement of the FLR will be led by two main authorities:

• The European Commission will investigate suspected forced labor outside the EU.
• National competent authorities in EU Member States will investigate forced labor cases inside the EU.

Authorities will follow a risk-based approach when deciding which products to investigate. Priority will be given to:

• Industries and regions with a high risk of forced labor (e.g., agriculture, textiles, electronics, and mining).
• Cases involving state-imposed forced labor.
• Products with high volumes in the EU market.

2. Investigations and Burden of Proof

Investigations may begin based on:

• Complaints filed through an online information portal.
• Authorities' own initiative, using databases of high-risk geographic and product factors.

Companies under investigation must provide evidence demonstrating that their products are not made with forced labor. They will have 30 working days to respond to authorities' requests for compliance documentation.

3. Outcomes and Penalties

If authorities confirm forced labor in a product’s supply chain, they will issue a decision requiring:

• Withdrawal of the product from the EU market (if already sold).
• Prohibition of import, sale, or export (if the product has not yet reached the market).
• Disposal or recycling of products (depending on feasibility).
• Potential financial penalties for non-compliance.

Companies may appeal enforcement decisions by presenting new evidence demonstrating compliance.

Industrial Compliance Solutions and Risk Mitigation Strategies

To comply with the FLR, companies need to implement robust supply chain sustainability management and traceability solutions. Industrial solutions and compliance tools include:

1. Automated Compliance & Risk Assessment Tools

• Acquis’ Forced Labor Compliance Solution provides ESG surveys, supplier education, and reporting dashboards to monitor supplier risks.
• AI-based risk detection platforms help businesses screen suppliers for forced labor risks.
• Real-time tracking solutions to ensure end-to-end supply chain transparency.

2. Supply Chain Due Diligence Platforms

• Acquis compliance data tracking systems enhance supply chain visibility and data integrity.
• Supplier engagement platforms help companies collect forced labor certifications from suppliers.
• Third-party audit and verification services to ensure ethical labor practices.

3. Consulting and Regulatory Compliance Support

• Regulatory Consulting & Training offer customized compliance roadmaps based on FLR and global regulations.
• Industry associations provide guidelines and policy recommendations for companies to align with FLR requirements.
• EU and international trade bodies offer certification programs for businesses demonstrating forced labor-free supply chains.

Legal Perspectives and Interaction with Other Key Regulations

1. EU Corporate Sustainability Due Diligence Directive (CSDDD)

The CSDDD, adopted in July 2024, mandates large companies to identify, prevent, mitigate, and remedy human rights and environmental abuses in their supply chains. While the FLR does not impose additional due diligence obligations, strong human rights due diligence under CSDDD will help companies reduce FLR risks.

2. U.S. Forced Labor Import Bans

The FLR is similar to U.S. laws, including:

• Section 307 of the U.S. Tariff Act (1930): Prohibits goods made with forced labor from entering the U.S.
• Uyghur Forced Labor Prevention Act (UFLPA): Creates a presumption that goods from China’s Xinjiang Uyghur Autonomous Region are made with forced labor, requiring clear and convincing evidence to challenge import bans.

Key differences between the EU FLR and U.S. import bans:

Conclusion

The EU’s Forced Labour Regulation (FLR) marks a historic step in eliminating forced labor from global supply chains. Businesses must take proactive measures by integrating industrial compliance tools, strengthening supplier engagement, and aligning legal strategies to comply with the FLR’s strict enforcement mechanisms.

Companies that invest in advanced compliance technologies, legal advisory services, and due diligence frameworks will be better positioned to navigate the evolving regulatory landscape and maintain ethical supply chains.