EU Forced Labour Regulation Is Now Adopted: What Does It Mean?

• On 12 December 2024, the Regulation on prohibiting products made with forced labour on the Union market was published in the European Union Official Journal.¹
• The Regulation prohibits the placing on or exporting from the EU market any product made with forced labour.
• To aid in evaluating potential breaches of the Regulation, the Commission will create a database with regularly updated information on areas or products at risk of forced labour.
• The Regulation follows a trend in EU regulations emphasizing accountability across the supply chain of economic operators. It also follows legislation in other jurisdictions that target allegations of forced labour practices, like the UFLPA.
• Now that the Regulation has been published, it officially enters into force as of 13 December 2024 and will fully apply in three years, on 14 December 2027.

On 12 December 2024, the Regulation (EU) 2024/3015 on prohibiting products made with forced labour on the Union market and amending Directive (EU) 2019/1937 (the Regulation) was published in the European Union (EU) Official Journal. The Regulation prohibits placing and making available in the EU, or exporting from the EU, any product made using forced labour. The adoption of the Regulation is the end of a years-long process towards enacting an EU-wide prohibition on products made with forced labour.

Although member states of the EU all prohibit forced labour and the EU provides guidance on avoiding the practice forced labour, the EU Forced Labour Regulation is the first legislation to prohibit goods made with forced labour from entering and leaving the EU market.

Overview of the EU Forced Labour Regulation

Once applied, the Regulation will prohibit products made with forced labour from being placed on the EU market or exported from the EU. The new rules on forced labour will apply to all industry sectors and all products, regardless of their origin and without value thresholds. Distance sales, including online selling, also fall within the scope of the Regulation. The Regulation provides a comprehensive scheme that includes provisions addressed to member states authorities, the European Commission and economic operators.

What is Considered Forced Labour?

The Regulation defines forced labour according to the Forced Labour Convention, 1930 (No. 29) of the International Labour Organization (ILO). This Convention defines forced or compulsory labour as “all work or service which is exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily”, with certain exceptions. These exceptions include work or service exacted as part of compulsory military service, or which form part of normal civic obligations, or as a consequence of a court conviction.

Risk-Based Approach

The Commission and the competent authorities will follow a risk-based approach when assessing the likelihood of a violation. In their assessment, they will use the following criteria as appropriate, in order to prioritise products suspected to have been made with forced labour:

• The scale and severity of the suspected forced labour, including whether state-imposed forced labour may be a concern;
• The quantity or volume of products placed or made available on the EU market;
• The share of the part of the product suspected to have been made with forced labour in the final product.

The assessment of the likelihood of a violation should be based on all relevant factual, and verifiable information available to the Commission and competent authorities. This includes but is not limited to:

• Information and decisions in the information and communication system established by the Regulation (EU) 2019/1020 on market surveillance and compliance of products;
• The database of forced labour risk areas or products;
• Risk indicators and other information included in the Commission guidelines;
• Information submitted in the single information submission point;
• Information received by the Commission or the competent authority from other authorities, such as the member state´s due diligence, labour, health or fiscal authorities, on the products and economic operators under assessment;
• Any issues arising from meaningful consultations with relevant stakeholders, such as civil society organsiations and trade unions.

Single Information Submission Point

The Commission will set up a “single information submission point”—a dedicated centralised mechanism for the submission of information. Information on alleged violations may be submitted via the submission point by any natural or legal persons or any associations that do not have a legal personality. Submissions of information must contain information on the economic operators or products concerned, provide the reasons and evidence substantiating the alleged violations, and where possible, supporting documents. The Commission is obliged to discard any submissions of information to the single information submission point that are manifestly incomplete, unfounded or made in bad faith.

Investigation

The Regulation divides investigative responsibilities between the Commission and member states. The Commission will serve as the lead competent authority (LCA) where the suspected forced labour is taking place outside the territory of the EU, while the relevant competent authorities of the member states will act as the LCA where the suspected forced labour is taking place within their territory.

In the preliminary phase of an investigation, the LCA will request information from the economic operators under assessment, and, where relevant, other product suppliers. This information should detail the actions taken to identify, prevent, mitigate, end or remediate risks of forced labour in their operations and supply chains concerning the products under assessment. This includes actions taken under applicable EU or national law setting out due diligence and transparency requirements with respect to forced labour, guidelines to be issued by the Commission and due diligence guidelines or recommendations of relevant international organizations such as the United Nations (U.N.), ILO and the Organization for Economic Co-operation and Development (OECD).

While reviewing a submission, an LCA may ask for more information from other relevant stakeholders.

If the LCA determines that there is a substantiated concern of a violation of the prohibition on forced labour, the LCA will initiate an investigation on the products and economic operators concerned. An investigation involves the economic operator providing extensive information to the LCA, including information regarding the supply chain of a product.

In exceptional cases, the LCA may conduct a field inspection, taking into consideration where the risk of forced labour is located.

Decisions and Enforcement

Once an investigation concludes, final decisions will be taken by the respective LCA. In the event that the LCA finds that the product at issue was made using forced labour, the LCA shall adopt decisions containing:

• A prohibition on the placing or making available of the products concerned on the EU market and on exporting them;
• An order requiring the economic operators that have been subject to the investigation to withdraw the products that have already been placed or made available on the EU market or to remove content from an online interface referring to the products or listings of the products concerned;
• An order requiring the economic operators that have been subject to the investigation to dispose of the products concerned, or, if parts of the product which are found to be in violation of the Regulation are replaceable, an order requiring those economic operators to dispose of those parts of that product.

Once a decision has been made to ban a product, the decision will be placed on the Forced Labour Single Portal and will apply in all EU member states.

If an economic operator fails to comply with the decision, the competent authorities of the member states are responsible for enforcing the decision and ensuring the following:

• Prohibition of the products on the EU market and their export;
• Withdrawal of products already on the market;
• Disposal of withdrawn products and those remaining with the economic operator, at their expense;
• Restriction of access to the products and related listings by requesting relevant third parties to implement such restrictions.

An economic operator that does not comply with a decision under the Regulation may be subject to penalties in accordance with national law. The penalties should be “effective, proportionate and dissuasive”. They should give due regard to the gravity and duration of the non-compliance with the decision, any relevant previous non-compliance with a decision, the degree of cooperation with the competent authorities, and any other mitigating or aggravating factor applicable to the circumstances of the case.

Single Portal and Database

The Forced Labour Single Portal will be a repository of decisions, important guidelines and other relevant communications. It will be overseen by the Commission and is a key part of the Regulation. For entities under investigation, the Portal will also include a place where submissions can be made during an investigation and list the contacts of the designated LCA.

Additionally, the Portal will host a database of “forced labour risk areas or products.” This database will “indicate specific economic sectors in specific geographic areas for which there is reliable and verifiable evidence that there exists forced labour imposed by state authorities”. It will be imperative that economic operators stay aware of changes to this database.

When developing this database, the Commission will work on the basis of independent and verifiable research, data from organizations such as the ILO and the U.N., and “with the assistance of external expertise if needed”. This will be a “living” database and is intended to be adjusted on an ongoing basis, but should not otherwise publicly disclose information that directly names economic operators.

Guidelines

The Regulation requires that the Commission issue guidelines by 14 June 2026. The guidelines will include, among other things, information related to:

• Due diligence in relation to forced labour, including forced child labour, which shall take into account applicable national and EU legislation, setting out due diligence requirements with respect to forced labour, guidelines and recommendations from international organisations, as well as the size and economic resources of economic operators, different types of suppliers along the supply chain, and different sectors;
• Guidance for economic operators on best practices for bringing to an end and remediating different types of forced labour;
• Information on risk indicators of forced labour, including on how to identify it;
• Guidance for economic operators on due diligence in relation to forced labour imposed by state authorities;
• Guidance for economic operators and product suppliers on how to engage in dialogue with competent authorities, in particular on the type of information to be submitted.

It will therefore be important for economic operators to be aware of the guidelines when importing into the EU market.

Cooperation with Non-EU Parties

The Regulation authorizes the Commission to “cooperate and exchange information with authorities of third countries, international organisations, civil society representatives, trade unions, business organisations and other relevant stakeholders.”

This is notable for a few reasons. First, it is clear that the Commission expects third countries to assist in the implementation of the Regulation. Second, as we have seen with the Uyghur Forced Labor Prevention Act (UFLPA) enforcement in the United States, civil society organizations are likely to play a role in identifying sectors that should be targeted.

How Does the Regulation Compare to the UFLPA?

Although of similar remit, the Regulation differs in key ways from the UFLPA. The UFLPA enforces a rebuttable presumption that any goods originating from the Xinjiang Autonomous Region (XUAR) of China are made with forced labour. The UFLPA further places the burden on businesses and importers to conduct due diligence into their supply chains to ensure that there is no forced labour. In contrast, the Regulation is origin-neutral and does not place a rebuttable presumption on economic operators that goods produced in specific geographical regions are made with forced labour. It also does not create additional due diligence obligations for economic operators other than those already provided for in EU or national law.

Next Steps

The obligations on economic operators will apply from 14 December 2027. More immediately, the Commission must make available guidelines by 14 June 2026.

Recommendations

While the date of application may appear far in the future, it is best for economic operators to start considering their potential risk now. Because the Regulation applies to all levels of production, it is important that economic operators consider their potential risks sooner instead of later. While diligence must be tailored to different situations, we generally suggest best practices, such as:

• Keeping informed of developments, particularly of the publication of the database of high-risk sectors and regions and of the guidelines.
• Conducting reviews of supply chains.
• Having clear and organized records of all steps in the production process.
• Prioritizing a risk-based approach to production.
• Cooperating with authorities and engaging with counsel to navigate this complex space.

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, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202403015.