ESG Quick Guide: EU Forced Labour Regulation

The FLR was published in the Official Journal of the EU on 14 December 2024. Its main provisions will start applying from 14 December 2027. 

The FLR lays down rules prohibiting economic operators from placing and making available on the EU market, or exporting from it, any products made with forced labour. 

The Regulation is particularly far-reaching, as it applies to all products (rather than to a limited list), across all sectors, irrespective of the provenance of the goods (including those made within the EU) or any de minimis threshold, and to any EU or non-EU economic operator without turnover or employee thresholds. 

As opposed to other EU due diligence regimes, the FLR does not prescribe specific measures to be applied by economic operators to comply. However, this may change in the future, as the Commission has been granted delegated powers to establish further formalities for listed products or product groups.

Mandatory

Economic operators are required to comply with the FLR by 14 December 2027. 

The FLR will apply to:

• any EU or non-EU economic operator, meaning any natural or legal person that first places products on the EU market, further makes them available there (including by means of online/distance sales if the offer is targeted at end users in the Union), or exports products from the EU – transport services are not covered; 

• any product, defined as any item that can be valued in money and is capable, as such, of being the subject of commercial transactions, whether it is extracted, harvested, produced or manufactured;

• across all sectors;

• made in whole or in part with forced labour at any stage of its extraction, harvest, production or manufacture. “Forced labour” is defined as “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”, including forced child labour.

There is no differentiated regime for SMEs, although the FLR 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.

The FLR prohibits economic operators from placing and making available on, or exporting from, the EU market products made with forced labour. 

Unlike other EU due diligence regimes, the FLR does not currently set out specific due diligence requirements or customs formalities. However, this may change in the future, as the Commission has been granted delegated powers to establish further formalities for listed products or product groups.

Thus, unlike the EU Deforestation Regulation, the FLR currently does not require economic operators to submit due diligence statements through an online system before placing or making available products on the EU market. However, Article 27 grants the 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 or exported therefrom.

As immediate next steps, operators should at least:

• Identify and address forced labour risks in their value chain. Risks of forced labour in the value chain should be reviewed and addressed with heightened diligence and sufficiently in advance to obtain sufficient comfort for all products entering or exiting the EU market as from 14 December 2027.

• Monitor the Commission’s potential adoption of delegated acts (imposing further formalities) and its risk database and guidelines (to be adopted by 14 June 2026). As detailed below, the Commission should set up a database providing regularly updated indicative, non-exhaustive, evidence-based information on forced labour risks in specific geographic areas or with respect to specific products or product groups. The Commission will also publish implementation guidelines that may shed light on the expectations regarding compliance measures to be implemented by economic operators.

The FLR sets up an EU‑wide enforcement system based on a risk-based approach and a structured investigation process. 

Each Member State must appoint at least one national competent authority, which will cooperate with others through the Union Network Against Forced Labour Products under a lead national competent authority. Where the suspected forced labour occurs outside EU territory, the Commission acts as lead authority. 

Under the FLR, the Commission and national authorities must apply a risk-based approach when assessing potential violations and deciding whether to investigate, focusing on the proportion of the suspected forced labour component in the final product, the quantity and volume of products concerned, the scale and gravity of the alleged forced labour (including any state-imposed forced labour), the size and resources of the economic operators, and the complexity of the supply chain.

The process involves three steps:

1. Preliminary assessment: The lead authority requests information from economic operators on the measures they have taken to identify, prevent, mitigate, eliminate or remediate forced labour risks in their supply chains. Authorities assess potential violations based on this information alongside stakeholder submissions, risk indicators, and other relevant sources, and must decide within set time limits whether a substantiated concern of forced labour exists.

2. Formal investigation: Where a substantiated concern is found, the lead authority launches a formal investigation, notifying the economic operator within three business days of its scope and reasons. Operators are given between 30 and 60 business days (extendable) to provide information, and the authority targets an overall period of nine months to adopt a decision or close the investigation. In exceptional cases, field inspections may be conducted.

3. Decision and enforcement: If the lead competent authority concludes that forced labour has been used, it must without delay prohibit the placing and making available of the products on the EU market and their export, require the withdrawal of products already made available, and order that they be destroyed, rendered inoperable or otherwise disposed of. By way of derogation, where necessary to avoid disruption of strategically or critically important supply chains, the authority may instead order that products be withheld for a specified period at the operator's expense. Operators are given at least 30 working days to comply with an infringement decision (10 working days for perishable goods), may seek judicial review, and may at any time request a review of a decision by demonstrating that the products now comply with the prohibition. 

Member States must establish “effective, proportionate and dissuasive” penalties for economic operators that do not comply with an infringement decision. Authorities must take due account of the gravity and duration of non-compliance, any relevant previous non-compliance, the degree of cooperation and any mitigating or aggravating factors such as financial benefits or gains obtained as a result of non-compliance. 

Unlike some other EU regimes, such as the Deforestation Regulation the FLR does not set penalties based on the economic operator’s turnover, albeit Member States may provide for such a regime at national level. 

The FLR is part of a broader EU legislative agenda tackling global supply chains, which includes the Corporate Sustainability Due Diligence Directive (“CSDDD / CS3D”), the Conflict Minerals Regulation, the Deforestation Regulation (and its predecessor, the Timber Regulation), the Critical Raw Materials Regulation and the Sustainable Batteries Regulation. Some of these instruments impose specific formalities or due diligence requirements which are not imposed by the FLR, at least not at this stage.

As indicated, while these other regimes usually apply only to enumerated products and/or to companies reaching certain turnover or employee thresholds, the scope of application of the FLR is much broader. Many businesses active in the EU market could thus be subject only to the FLR. 

For businesses large enough to fall within the scope of the CSDDD, a single compliance programme tackling both that Directive and the FLR will likely be implemented since forced labour is part of the adverse impacts to be identified and addressed under the CSDDD and the tools to be established by the Commission under the FLR will likely be helpful in this exercise (see below).

The Commission is required to publish, by 14 June 2026, a package of guidance and tools:

• Implementation guidelines. The guidelines will be targeted at competent authorities (regarding practical implementation), economic operators (regarding compliance with the general prohibition), and civil society organisations, victims and other stakeholders (regarding how to submit substantiated concerns). See our blog post for more information. 

• Forced labour risk database. The Commission will create a database providing indicative, non-exhaustive, evidence-based information on forced labour risks in specific geographic areas or with respect to specific products or product groups. 

• Forced Labour Single Portal. The Commission will establish a publicly accessible Single Portal on Forced Labour, providing information on the implementation of the Regulation, including on the identity of competent authorities, guidelines, the indicative risk database, the mechanism for reporting alleged violations, and all prohibition and withdrawal decisions.

• SME support. The Commission will develop accompanying measures to support the efforts of economic operators and their supply chain partners, in particular SMEs. Competent authorities must designate contact points to provide information to SMEs on matters relating to the application of the FLR and may also organise training sessions on forced labour risk indicators.

• FLR

• Call for Evidence on Implementation Guidelines

• Call for input of Draft Implementing Regulation setting out the details and functionalities of a forced labour module within the Information and Communication System for Market Surveillance (ICSMS)

• EU Forced Labour Regulation: Commission seeks feedback on implementation guidelines and rules on regulators’ information system

• EU Forced Labour Regulation published in the Official Journal

• ESG Quick Guide: EU Corporate Sustainability Due Diligence Directive (CSDDD / CS3D)

• Business and Human Rights collection page

• Other ESG Quick Guides