06 January 2025

EU Forced Labour Act – Are you prepared for it?

  • Articles
  • Compliance
  • Legal
  • Governance / ESG
  • Trade / Logistics / Competition

On 12 December 2024, the Regulation (EU) 2024/3015 on prohibiting products made with forced labour on the Union market (the Regulation) was published in the EU Official Journal.

  • Raphael Brunner

    Legal Partner

  • Adrian Peyer

    Legal Partner

The Regulation prohibits placing and making available in the EU, or exporting from the EU, any product made using forced labour.

The obligations on economic operators ("any natural or legal person or association of persons") will apply as of 14 December 2027.

Summary:

  • The EU will prohibit any products made with forced labour from being placed on the EU market or exported from the EU as of December 14, 2027.
  • The EU regulation is broad and far reaching and goes further than similar regulation such as the US Uyghur Forced Labor Prevention Act, the Canadian Fighting Against Forced Labour and Child Labour in Supply Chains Act or the UK Modern Slavery Act.
  • The Regulation does not presume that products made-in certain countries/regions are by definition made with forced labor (compared to the US Act) nor does it entail an obligation to report on the measures taken to prevent and reduce the risk of forced labour (compared to the Canadian Act).
  • The Regulation does not prescribe the required due diligence and documentation, but it obliges the EU Commission to publish respective guidelines by June 2026.
  • The Regulation comes on top of other existing EU due diligence regulations such as the CSDDD, EUDR, Conflict Minerals and Batteries directives etc.
  • In order to comply with the Regulation by Q4 2027 and other due diligence obligations (CSDDD etc.), it is recommended to start assessing the supply chains as well as the company’s governance and supply chain policies rather sooner than later.

1. Scope of the Regulation

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.

2. 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):

“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”.

There are certain exceptions including work or service as part of compulsory military service, or which form part of normal civic obligations, or as a consequence of a court conviction.

3. Risk-Based Approach

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

  • scale and severity of the suspected forced labour;
  • quantity or volume of products placed or made available on the EU market;
  • share of the part of the product suspected to have been made with forced labour in the final product.

4. Single Information Submission Point

The Commission will set up a “single information submission point”, which is a dedicated centralized mechanism for the submission of information. Information on alleged violations may be submitted via the submission point by any natural or legal persons.

5. 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.
  • The relevant competent member state authorities will act as the LCA where the suspected forced labour is taking place within their territory.

6. Decisions and Enforcement

If the LCA finds that the product investigated was made using forced labour, the LCA issues a decision containing:

  • prohibition on the placing or making available of the products on the EU market and on exporting them;
  • withdrawal of 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;
  • disposal of the products.

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 are responsible for enforcing the decision.

An economic operator that does not comply with a decision under the Regulation may be subject to penalties in accordance with national law.

7. Guidelines by the Commission

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

  • due diligence in relation to forced labour;
  • 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;
  • 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.

8. Preparation

Because the Regulation will apply as of Q4 2027 to all levels of production and all industries, it is best for economic operators to start considering their potential risk now.

Preparatory steps should include:

  • Review and update internal governance structure and documents
  • Review and implement policies addressing forced labour, including supplier codes of conduct, procurement policies and due diligence questionnaires and audits.
  • Review supply chains taking a risk-based approach
  • Align efforts with other due diligence processes based on other regulations such as Corporate Sustainability Due Diligence Directive (CSDDD) or the EU Deforestation Regulation (EUDR) or local laws (e.g. German Lieferkettensorgfaltspflichtgesetz LkSG or in Switzerland the due diligence obligations regarding child labour)
  • Provide training on forced labour to employees, especially those in senior management positions and procurement.

We at MME remain available with our Trade and ESG Teams to support you in preparing for these new regulations.
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