EU Adopts Ban on Products Made With Forced Labour
On 19 November 2024, the EU Council (Council) adopted a regulation prohibiting products made with forced labour on the Union market, the Forced Labour Regulation (Regulation). The Regulation marks the final step in the EU’s decision-making process to specifically address the issue of forced labour within global supply chains.
The European Commission (Commission) initially proposed the Regulation on 14 September 2022, and a provisional political agreement was reached by the European Parliament (Parliament) and Council on 5 March 2024. For more information on the provisional agreement, refer to this Latham blog post.
Framework for Action
The Regulation establishes a framework for legal action against products made with forced labour. It prohibits economic operators from making products made with forced labour available on the EU market (including by distance sales), as well as their export. To support enforcement, the Commission will develop a database identifying forced labour risk areas and products, aiding competent authorities in assessing potential violations.
Investigation and Enforcement
The Regulation delineates responsibilities between the Commission and Member State authorities. The Commission will handle investigations concerning forced labour outside the EU, while Member State authorities will address cases within their territories. Information sharing is considered a critical component of the Regulation, with Member States required to notify other Member States or the Commission if they suspect violations elsewhere in the EU or in third countries.
Decisions to ban, order withdrawal, or dispose of products will be made by the authority that conducted the investigation. Importantly, decisions by national authorities will be recognised across all Member States, which should ensure a unified approach under the principle of mutual recognition.
The Regulation further requires Member States to implement effective, proportionate, and dissuasive penalties for non-compliance with enforcement decisions in their national laws.
Due Diligence
The Regulation does not create additional due diligence obligations for economic operators. It complements Member States’ legislation on forced labour and EU frameworks, including the Corporate Sustainability Due Diligence Directive (CSDDD). While the CSDDD will impose value chain due diligence obligations on companies regarding forced labour impacts, it does not include specific measures to prevent the entry of products into the EU market. The new Regulation fills this gap by establishing protocols for the ban or withdrawal of goods made with forced labour.
The Regulation also requires the Commission to publish and regularly update guidance for economic operators on due diligence in relation to forced labour, including child forced labour.
Next Steps
With the Council’s approval, the legislative act is now adopted. Following signatures from the President of the Parliament and the President of the Council, the Regulation will be published in the Official Journal of the European Union. It will come into force the day after publication and will be applicable three years thereafter.
Latham & Watkins will continue to monitor developments in relation to global supply chain regulation and forced labour.
This post was prepared with the assistance of Toon Dictus.