EU Forced Labour Regulation published in the Official Journal

Introduction

The Forced Labour Regulation (EU Regulation 2024/3015) on prohibiting products made with forced labour on the Union market) was published in the Official Journal on 14 December 2024, nearly 8 months after the European Parliament formally adopted it.  It will apply as of 14 December 2027. 

The Forced Labour Regulation, which has a very broad scope of application, lays down rules prohibiting economic operators from placing and making available on the EU market or exporting from the EU market any products made with forced labour (see our previous briefings here, here, here and here for background on this proposal). 

This Regulation is part of a broader EU legislative agenda tackling global supply chains – which includes the Corporate Sustainability Due Diligence Directive (CSDDD / CS3D), the EU Conflict Minerals Regulation (see our briefing), the Deforestation Regulation (see our recent blog post on the Parliament and Council’s agreement for a one-year delay), the Critical Raw Materials Regulation (see our briefing) and the Batteries Regulation (see our blog post).

Key takeaways 

• The Forced Labour Regulation imposes on all economic operators (EU and non-EU) a general ban on any products made with forced labour, prohibiting them from being placed on the EU market or exported from it, starting from 14 December 2027.
• The Regulation does not impose specific due diligence requirements. Companies that are in-scope of the CSDDD (once applicable, as from July 2027 for the largest companies), other EU/national due diligence regimes (such as the French, German or Norwegian regimes), or those that have voluntarily adhered to soft law standards, will need to implement the requirements of these regimes in combination with the forced labour ban.
• The Regulation currently does not impose customs or other due diligence statement formalities, as opposed to the EU Deforestation Regulation. This may change in the future, as the Commission has been granted delegated powers to establish further formalities for listed products or product groups.
• An enforcement regime is established, granting broad supervisory powers to the Commission and national authorities to be appointed in each Member State, focusing on corrective actions rather than penalties. Customs authorities will be required to support the authorities’ work and to suspend the release of non-compliant products.
• Companies will need to follow closely the Commission’s implementation guidance and tools, to be issued 18 months before the Regulation’s entry into application (i.e. by 14 June 2026), as well as whether the Commission will apply further formalities to certain listed products. Domestic supervisory authorities might also adopt their own guidance. 
• Risks of forced labour in the value chain should be reviewed with heightened scrutiny and addressed for all products entering or exiting the EU market as from 14 December 2027.

Broad scope of application

The forced labour ban is particularly far-reaching, as it applies to:

• all products, rather than a specific list of products (as is the case for other EU sectoral due diligence regimes). Products that have already reached end-users in the EU market before the entry into application of the Regulation are not covered.
• all sectors, irrespective of the provenance of the goods (including those made within the EU);
• products placed or made available on the EU market, or exported therefrom, by any EU or non-EU economic operator. There is no differentiated regime for SMEs, although the Regulation provides for a risk-based approach to enforcement, and the size and resources of the economic operators must be taken into account at the enforcement stage. Products offered for sale online or through other means of distance sales are deemed to be placed or made available on the EU market if the offer is targeted at end users in the EU;
• products made in whole or in part with forced labour, i.e. whenever “forced labour has been used in whole or in part at any stage of its extraction, harvest, production or manufacture, including working or processing related to a product at any stage of its supply chain”. “Forced labour” is defined by reference to Article 2 of the ILO’s Convention Concerning Forced or Compulsory Labour as “all work or service which is extracted from any person under the menace of any penalty and for which the said person has not offered him or herself voluntarily”. It includes forced child labour.

General ban without customs formalities… at least for now

The Regulation provides for a general ban without creating additional due diligence obligations for economic operators beyond those provided by mandatory national or EU requirements, particularly the upcoming CSDDD.

Unlike the EU Deforestation Regulation, the Forced Labour Regulation currently does not require economic operators to submit due diligence statements through an online system before placing or making available products in the EU market. However, Article 27 of the Regulation grants the European Commission the power to adopt delegated acts that could require economic operators to provide detailed product information to customs authorities before goods are released for free circulation on the EU market or exported therefrom. While the precise implementation remains uncertain at present, there is a potential route for the Commission to develop an information system similar to the approach in the Deforestation Regulation (see our briefing here). Such a system would apply to specific product categories or sectors deemed high-risk for forced labour. 

Enforcement regime focused on the imposition of corrective actions

Whistleblowing submissions

Any person or organisation will be entitled to submit information to a single information submission system, managed by the European Commission, regarding alleged violations of the forced labour ban and to receive feedback on the outcome of their submission. The Commission will refer the matter to the competent national supervisory authority. The Regulation provides that whistleblowers will benefit from the protection granted by the Whistleblowing Directive.

Powers of supervisory authorities

Competent authority: Each Member State will have to designate at least one national competent authority responsible for monitoring violations of the ban by economic operators in their territory by 14 December 2025 (potentially the same authorities as those to be established to supervise the CSDDD). National competent authorities will have to cooperate among themselves, under the direction of one of them acting as the lead authority, through a newly established Union Network Against Forced Labour Products. Where the suspected forced labour is occurring outside the EU territory, the Commission will act as the lead competent authority. 

Risk-based approach: When identifying potential violations, competent authorities will have to follow a “risk-based approach” by assessing all available information, including specific sources of information (such as whistleblowing submissions, forced labour risk indicators based on international standards, and guidance on forced labour due diligence as set out in guidelines to be issued by the Commission.

Investigation: Preliminary investigations will typically start with a request for information, with a 30-business-day deadline to answer, regarding how the operator respected its obligations. If the authority finds a “substantiated concern” of violation of the ban, it has to initiate a formal investigation, during which the economic operator will be heard, within 30 working days following the receipt of the requested information. 

Infringement decisions (orders for corrective action): The lead competent authority should adopt a decision on the investigation’s outcome within a reasonable time, which should be a maximum of 9 months. If the investigation concludes that forced labour has been used, the authority will have to:

• prohibit, without delay, the placing and making available of such products on the EU market and their export from the EU;
• request the economic operators to withdraw from the EU market the relevant products already made available; and
• specify whether the relevant products have to be destroyed, rendered inoperable, or otherwise (partly) disposed of.

The Regulation provides for the possibility to order the withdrawal of non-compliant products which have been already placed or made available on the market but which have not reached the end-users in the EU market yet. 

It also gives the possibility to withhold the relevant products if they are part of a “supply chain of strategic or critical importance for the Union.” 

The economic operator must eliminate the forced labour identified before the competent authority reviews its decision. Otherwise, the relevant products may be destroyed, rendered inoperable, or otherwise disposed of. 

The Regulation requires the Commission and competent authorities to prioritise their enforcement action, in the context of different product suppliers down the supply chain, by focusing on the level of the economic operator(s) as close as possible to where the risk of forced labour is likely to occur and taking into account the size and economic resources of the economic operator(s), the quantity of products concerned, the complexity of the supply chain, as well as the scale of suspected forced labour. 

Economic operators will be given a reasonable time limit to comply with the national authority’s decision, of at least 30 working days (10 working days for perishable goods, animals and plants), and the possibility to seek judicial review of the decision.

Penalties for breach of infringement decision: Member States must implement penalties that are “effective, proportionate and dissuasive” in case of breach of the authority’s decision. Competent authorities need to take into account several criteria, including the gravity and duration of the infringement, previous infringements (if applicable), the degree of cooperation of the economic operator with the competent authorities, and any other mitigating or aggravating factors. Contrary to other similar EU laws, the Regulation does not provide for a limit to financial penalties (e.g., the Deforestation Regulation limits the penalty to 4 % of the operator’s or trader’s total annual EU-wide turnover in the previous financial year).

Customs controls

The Regulation also contains several provisions allowing customs authorities to assist with the identification of products entering or leaving the EU market that may violate ban. Custom authorities will be required to suspend the release or export of that product until the national competent authority’s decision following an investigation.

As explained above, the Commission could adopt delegated acts to require economic operators to provide customs authorities with additional information for certain products, which could be a system similar to the due diligence statements required by the Deforestation Regulation. 

Next steps

The Commission is required to issue by 14 June 2026 guidelines for the implementation of the Regulation, including on due diligence in relation to forced labour, on risk indicators and on best practices for ending and remediating different types of forced labour. 

It will also have to establish, by the same date, a database on forced labour risks in specific geographic areas or with respect to specific products or product groups, without disclosing information that names economic operators directly. 

While this is not provided in the Regulation, certain domestic authorities might issue their own guidance and/or enforcement priorities.

The Regulation starts applying as of 14 December 2027, i.e. after the entry into application of the CSDDD and its mandatory due diligence measures for the largest in-scope companies on 26 July 2027 (see our blog post). 

Companies will need to review with heightened scrutiny and address risks of forced labour in their value chain for all products entering or exiting the EU market. This is especially crucial for companies that are not in scope of the CSDDD or other due diligence regimes and may thus have been less focused on value chain due diligence measures.

If you would like to discuss any aspect of the new regime, please reach out to the contacts on this post, or to your usual Linklaters contact(s).