On 19.11.2024, after the European Parliament, the Council of the European Union also adopted the future Regulation on the prohibition of products made with forced labour on the Union market, which prohibits products made with forced labour on the Union market.1 A general ban on the placing on the market, making available on the Union market and export from the Union is expected to apply to these products from around the end of 2027. Forced labour within the meaning of this regulation is basically any type of work or service that is required of a person under threat of any penalty and for which they have not voluntarily made themselves available, as well as child labour.
The Forced Labour Regulation is explicitly not intended to create any additional human rights due diligence obligations for economic operators that are not already provided for in Union or national law. Rather, the Forced Labour Regulation is intended to complement the Corporate Sustainability Due Diligence Directive (CSDDD or CS3D), which is to be transposed into national law by mid-2026, and the human rights due diligence obligations for certain (large) EU and non-EU companies to be introduced by mid-2027 at the latest (cf. our German blog post from March 18, 2024: EU Supply Chain Act: Agreement and agreement text | ADVANT Beiten) or alongside the German Act on Corporate Due Diligence Obligations in Supply Chains (LkSG, see the commentary on the LkSG by Depping/Walden). In contrast to the aforementioned "due diligence laws", the Forced Labour Regulation contains a general ban on products made with forced labour (see our German blog post from 14.03.2024 EU Regulation banning forced labour is coming (and EU Supply Chain Act perhaps still?) | ADVANT Beiten). In order to avoid the sanctions that could be imposed in the event of a breach of the ban, the companies concerned have an economic incentive to ensure that the products they sell are not made with forced labour.
The ban is aimed at economic operators. This is any natural or legal person or association of persons who places or makes available products on the Union market or exports products, regardless of their registered office, company size, sector or similar. In future, the authorities designated by the Member States or the Commission will monitor whether economic operators comply with the obligations under the Regulation - i.e. not placing on the market, not making available and not exporting the relevant products.
For cooperation and communication between the authorities and the Commission, the Commission coordinates the work on the Union network. The Commission provides a website, the forced labour single portal. In particular, helpful information is to be published on this portal. This includes, for example, guidelines still to be drawn up by the Commission (including with regard to due diligence obligations in relation to forced labour), a database still to be set up for areas and products with a risk of forced labour and notifications in connection with inspections and bans. The monitoring authorities are going to use these, for example, to transmit data in connection with investigations.
In future, economic operators must be prepared for preliminary and main investigations and field inspections by the competent monitoring authorities. As part of the preliminary investigation, they must provide the competent monitoring authority with documentation on their measures to identify, prevent, mitigate or even end the risk of forced labour in their operations and supply chain at short notice. If there are reasonable grounds for suspicion, the authority will initiate a main investigation, which is accompanied by in-depth inspections. The authorities should apply a risk-based approach to the investigations. They use information from various sources and apply the following criteria:
The lead competent authority may respond differently if it determines that the product under investigation was produced with forced labour. Depending on the product and the type of violation, it can, for example, prohibit the placing on the market or making available of the product or request the economic operator to prove that forced labour in the supply chain has been eliminated within a certain period of time. Fines can also be imposed.
The Commission is responsible if the suspected forced labour takes place outside the EU. If the forced labour takes place on the territory of a member state, the authority there has lead responsibility. They may cooperate with other competent authorities and request information.
All economic operators should (also) take a critical look at the supply chain of their products with regard to the EU Forced Labour Regulation and the sanctions that may be imposed in the future for violations of the ban on forced labour (in addition to fines, in particular the ban on further distribution of the products in question). To this end, they can also make use of the tools provided by the Commission. In future, companies should monitor their supply chain and document this in order to prepare for investigations. They must be able to make their findings available within a few working days in order to be able to refute the suspicions of the respective authority that justify the preliminary investigation as far as possible. In particular, companies that are subject to the Act on Corporate Due Diligence Obligations in Supply Chains (LkSG) can draw on their already established risk management measures and supplement them accordingly.
The Forced Labour Regulation is intended to open new possibilities for the authorities to intervene in EU law, such as the detention of products, and thus take a further step towards combating forced labour. Once the Regulation has been signed by the President of the European Parliament and published in the Official Journal of the European Union, the Forced Labour Regulation will enter into force on the day after publication. It will apply three years after its entry into force, i.e. probably at the end of 2027.
Dr Daniel Walden
Prof. Dr Rainer Bierwagen
Dr André Depping
1 See the press release of the Counsil and the English version of the Regulation
