EU Regulation on the prohibition of products made using forced labour entered into force

On 12 December 2024, Regulation (EU) 2024/3015 on the prohibition of products made using forced labour on the Union market (‘FLR’) entered into force. The ban will apply from 14 December 2027 to products that are placed on the EU market, made available or exported from the EU. The FLR follows, among others, the US ‘The Uyghur Forced Labor Prevention Act (’UFLPA‘)’, which also includes import bans on products from forced labour.

Product independent application

The Regulation addresses all ‘economic operators’, irrespective of turnover or place of business, and thus any natural or legal person or association of persons who places or makes available products on the Union market or exports products. It therefore also addresses economic operators outside the EU, provided they place or make products available on the Union market. The FLR applies to both large companies and sole traders. Making available covers not only sales in shops, but also distance selling if the offer is aimed at end users in the European Union.

Loss of marketability for products related to forced labour

The FLR prohibits companies from placing on the market, supplying or exporting products manufactured using forced labour. With regard to the definition of forced labour and forced labour imposed by state authorities, the FLR is based on Art. 2 of ILO Convention No. 29 and Art. 1 of ILO Convention No. 105. The FLR also covers forced labour of children.

The assessment covers any handling or processing at any stage of the supply chain. It does not cover the return of products that have already been to an end user in the Union market.

A violation of the FLR ban does not require knowledge that the product was produced using forced labour. It is sufficient for a product to be in breach if any of its components were produced using forced labour at any stage prior to its manufacture.

Reversal of the burden of proof: authorities must prove infringement

The Commission is responsible for reporting potential violations outside the EU; the respective Member State is responsible for violations within the EU. Proof that a product was manufactured using forced labour must be provided by the competent authority. The FLR therefore differs from the EU Deforestation Regulation (‘EUDR’) in one key respect.

The official enforcement of the ban takes place in several steps. As part of the preliminary investigation, it should be clarified whether there is a reasonable suspicion of an offence. If this suspicion is confirmed - following a statement from the company concerned - there is an obligation to provide further information. If the competent authority establishes an infringement, it immediately issues a decision prohibiting the placing on the market, making available and export of the products concerned and obliging the company to withdraw the products from the market, remove them from the market and destroy them, as this is the only way to reliably prevent re-export or re-use. The decision is also forwarded to the national customs authorities. These are instructed to suspend the release for free circulation and export of the products banned by the authority. The competent authority can also impose sanctions in the event of non-compliance with an official ban.

National preparatory measures

EU Member States now have until 14 December 2027 to put in place national control mechanisms. These will ensure that suspect products are identified and tested.

In particular, small and medium-sized enterprises (SMEs) will be offered assistance to facilitate implementation. The “Forced Labour Single Portal” will bring together all relevant information, including contact details for competent authorities, guidelines to be developed for economic operators and a database of forced labour risks. These risks will be broken down by region and product (groups) and will be based on information from independent actors such as the United Nations or universities. In addition, all information necessary for investigations will be transmitted through this portal.

Outlook and challenges for companies

Companies now have until the end of 2027 to comprehensively review their supply chains, create transparency in their supply chains and thus ensure their FLR compliance. Careful preparation is essential, as otherwise companies could lose their goods through no fault of their own if a component of their product is found to have been manufactured using forced labour at any point in the production process and the authorities impose a ban on placing on the market, making available and exporting, or measures such as product recalls. In addition, companies that fail to provide information requested by the authorities in a timely manner are already in breach of the Regulation and subject to sanctions. The deadlines for providing information in the investigation process are tight. Companies with complex, global supply chains should therefore use the time until the end of 2027 to maximise the transparency of their supply chains. This will also benefit them in relation to other European legislation so that synergies can be utilized: A company that places relevant products on the EU market, supplies them or exports them from the EU in accordance with the EUDR must also identify and prevent the risk of forced labour in the production of relevant products in accordance with the EUDR. In addition, a company falling within the scope of the CSDDD must continue to prevent or reasonably minimise instances of forced labour in its supply chains even after the CSDDD has been transposed into national law.

In addition, further developments, in particular the guidelines announced by the EU Commission and other support materials for the implementation of the Regulation, should be closely monitored.