The EU Agrees to Ban Products Made with Forced Labour

Following a European Commission proposal in 2022 for a regulation banning products made with forced labour, the EU legislators reached an agreement on 4 March 2024 to adopt a regulation that will ban such products from the EU (the “Regulation”).

According to the International Labour Organization, nearly 28 million people worldwide are in forced labour and as many as 160 million children are in child labour. The EU is committed to champion decent work both at home and around the world, and the elimination of child labour and forced labour lies at the heart of this endeavour. The Regulation will therefore no doubt have an important role to play in this fight for decent work.

The Regulation will cover products made in the EU for both domestic consumption and exports as well as products imported into the Union. It targets all types of companies and industries and all types of forced labour, including child labour. The new regime will have a huge impact affecting all companies selling products into or out of the European Union, regardless of their size. The new regime is an important statement from a major stakeholder to combat human trafficking and other types of forced labour on a global level.

The scope of the Regulation

The ban introduced through the Regulation will apply to any product, irrespective of sector or industry, where forced or child labour is used, whether in whole or in part, at any stage of the product’s supply chain. This includes the extraction, harvest, production, manufacture, working or processing of any part of the product. The regulation will not include service activities such as transport or distribution.

All businesses will thus have to make sure that any products made available by them in the EU or exported outside the Union have not been made through forced labour and do not contain parts or components made through such labour. The ban covers also products offered for sale online or through other means of distance sales.

Enforcing the new rules

The Regulation will provide the enforcers, that is the national authorities designated by the Member States and the European Commission, to investigate cases and take decision where there is a risk of forced labour. The Commission, which will be considered as a competent authority next to the national authorities, will have the power to assess a situation where there is a suspicion of forced labour in a third country and will also have a coordinating role. A new Forced Labour Single Portal is to be set up to help enforce the new rules. It will include guidelines, information on bans, database of risk areas and sectors, as well as publicly available evidence and a whistle-blower portal. A Union Network Against Forced Labour Products will help to improve cooperation between the competent authorities.

The Regulation establishes a procedure that will launch an investigation conducted by the competent authorities to check if suspected items have been produced using forced labour. In case a product was manufactured using forced labour, it may not be placed in the EU or exported from the EU. If the product is already on the market, it will have to be removed from the market.
A key aspect of the new regime is that any withdrawn parts will not be permitted to be re-exported to third countries. Instead, such products must either be donated, recycled or destroyed – all at the expense of the relevant business. Competent authorities may also impose penalties. Member States will enjoy discretion in setting and regulating these national penalties, subject to the need for them to be dissuasive, effective, and proportionate.

The new rules are likely to have a huge impact on businesses throughout the EU and beyond

Companies placing products in the EU market or exporting products outside the Union will now have to make sure that their products do not contain parts made with forced labour. Unlike many other ESG initiatives these rules will apply to all market operators, irrespective of size or sector, and are therefore likely to have a huge impact on how products are manufactured in Europe and elsewhere. Hopefully the new rules will have a great impact in combating forced labour and ensuring adequate human rights protection.