EU Adopts Forced Labor Regulation
On April 23rd, the EU formally adopted the EU Forced Labor Regulation with 555 votes in favor, 6 against, and 45 abstentions.
The Regulation bans all products made whole or in part using forced labor from being placed on the EU market or exported from the EU. Beginning in Q2 2027, the Regulation will allow competent authorities to investigate claims of forced labor and both withdraw and exclude non-compliant products. Here’s what you need to know:
The Forced Labor Regulation is product-agnostic
The Regulation bans all products made with forced labor from entering, being distributed on or exported from the EU market.
It covers all companies placing goods on the EU market
The Regulation will cover all companies placing goods on the market, including through direct-to-consumer online sales. It covers all products and their components regardless of the sector, origin or stage of the supply chain where forced labor took place.
The Regulation will use the ILO’s definition of forced labor, including the ILO’s 11 indicators of forced labor and the ILO’s definition of state-sponsored forced labor.
Companies will be required to disclose detailed product and supply chain information for high-risk products
The EU Commission will adopt additional legislation in the form of a Delegated Act that will require companies to make mandatory disclosures to customs authorities regarding high-risk products and supply chains. An announcement of high-risk products and sectors is forthcoming.
The Commission will establish a Forced Labor Single Portal
This portal is expected to include a single submission point for ongoing forced labor investigations and cases, as well as a database for high-risk products and regions, any decisions made by competent authorities to ban a product or withdraw a prior ban.
The database will include forced labor risks in specific geographies, products, product groups as well as risks of state-imposed forced labor.
Broad authority for forced labor investigations between member states and the EU Commission
Competent authorities will determine which products and companies are to be investigated for forced labor risk, however individuals and organizations will be able to submit claims of alleged forced labor (with evidence) to trigger such investigations.
Investigations will be risk-based and will focus on the most severe cases as a matter of priority. This means that cases involving state imposed forced labor or high volumes of a particular product will be prioritized.
Member states will be responsible for conducting investigations within their territories and the Commission will be responsible for conducting investigations where the alleged forced labor is occuring outside of the EU. The Commission will also have the authority to conduct on the ground field investigations / inspections in certain cases.
Rapid response times required for companies under investigation
Companies will only have 30 days to respond to a preliminary investigation, and between 30-60 days to provide additional information if a full investigation is triggered.
Decisions will be publicly available
Competent authorities are required to come to an official decision regarding all ongoing investigations within nine months. Any decisions will be made publicly available on the Forced Labor Single Portal, including information identifying the product in question, the supplier, and where relevant, the production site and supporting evidence of forced labor. Companies will have the right to contest decisions in court, however once a decision has been made they must withdraw the products and/or goods in question at their expense. Goods must either be donated, recycled or destroyed. Additional financial penalties may also be imposed by the Member States.
The EU Forced Labor Regulation will go into effect in Q2 of 2027. To learn how Sourcemap can help you identify forced labor risk and prepare your supply chain for what’s to come, reach out to our team of experts.