EU regulation on the prohibition of forced labor has entered into force

On 12 December 2024, Regulation (EU) 2024/3015 on the prohibition of products manufactured using forced labor on the Union market (“FLR”) entered into force. The prohibition will apply from 14 December 2027 to products placed on the market in the EU, made available to the public, or exported from the EU. The FLR follows, among other things, the US “The Uyghur Forced Labor Prevention Act (“UFLPA”)”, which also includes import bans on products made using forced labor. Product-independent scope

The Regulation addresses all “economic operators”, irrespective of turnover or registered office, and thus any natural or legal person or association of persons that places products on the market in the Union, makes them available to the public, or exports products. It therefore also addresses economic operators outside the EU, provided they place products on the market or make them available within the Union. The FLR applies to both large companies and individual traders. Making products available includes not only sales in retail stores but also distance selling, if the offer is directed at end users in the European Union. Loss of marketability for products related to forced labor. The FLR prohibits companies from placing on the market, making available, or exporting products that were produced using forced labor. Regarding the definition of forced labor and forced labor imposed by state authorities, the FLR refers to Article 2 of ILO Convention No. 29 and Article 1 of ILO Convention No. 105. Furthermore, the FLR also includes forced labor of children. The assessment is carried out with respect to all processing or manufacturing at any stage of the supply chain. Returns of products that have already been on the Union market with an end-user are exempt. A violation of the FLR prohibition does not require knowledge that the product was manufactured using forced labor. Furthermore, a violation is established if any component in the product's manufacture was produced using forced labor at an earlier stage. Reversal of the burden of proof: Authorities must prove a violation. The Commission is responsible for reporting potential violations outside the EU; the respective Member State is responsible for violations within the EU. The competent authority must provide proof that a product was manufactured using forced labor. This is a key difference between the FLR and the EU Deforestation Regulation (EUDR). Enforcement of the prohibition by authorities takes place in several stages. The preliminary investigation aims to determine whether there is reasonable suspicion of a violation. If this suspicion is confirmed – after the company concerned has provided a statement – further information must be submitted. If the competent authority determines that an infringement has occurred, it will immediately issue a decision prohibiting the placing on the market, making available, and export of the products in question. The company will also be required to withdraw the products from circulation, destroy them, and remove them from the market. This is the only way to reliably prevent re-export or reuse. The decision will also be communicated to the national customs authorities. They are instructed to suspend the release into free circulation and export of the products prohibited by the authority. The competent authority may also impose sanctions for non-compliance with an official prohibition. National Preparatory Measures: EU Member States now have until December 14, 2027, to establish national control mechanisms. These mechanisms are intended to ensure that suspicious products are identified and examined. In particular, small and medium-sized enterprises (SMEs) will be offered support to facilitate implementation. All relevant information will be compiled via the "Central Portal against Forced Labor," including contact details of the responsible authorities, guidelines for economic operators to be developed, and a database on forced labor risks. These risks will be broken down by region and product (group) and based on information from independent actors such as the United Nations or universities. Furthermore, all information required for investigations will be transmitted via the central portal. Outlook and Challenges for Companies: Companies now have until the end of 2027 to comprehensively review their supply chains, establish transparency in their supply chains, and thus ensure their FLR compliance. Careful preparation is crucial, as companies risk losing their goods through no fault of their own if a component of their product is proven to have been manufactured using forced labor at any point in the production process, and the authorities issue a ban on placing on the market, making available, or exporting the product, or take measures such as product recalls. Furthermore, a violation of the regulation, subject to sanctions, occurs even if companies fail to provide the information requested by the authorities within the specified timeframe. The deadlines for providing this information in the investigation process are tight. Companies with complex, global supply chains, in particular, should therefore use the time until the end of 2027 to establish maximum transparency in their supply chains. This will also benefit them with regard to other European legislation, allowing for synergies: A company that places relevant products on the market, makes available, or exports them from the EU under the EUDR must also, under the EUDR, identify and mitigate the risk of forced labor in the production of relevant products. Furthermore, a company falling within the scope of the CSDDD must, even after the CSDDD has been transposed into national law, prevent or adequately minimize cases of forced labor in its supply chains. In addition, further developments, in particular the guidance document and other support materials for implementing the regulation announced by the European Commission, should be closely monitored.