On November 19, 2024, the European Union took a historic step by adopting the Forced Labour Regulation (FLR), which bans products made with forced labour from the EU market. Set to take effect in three years, this landmark legislation introduces sweeping changes aimed at eliminating forced labour from global supply chains.
What is the EU Forced Labour Regulation?
The FLR establishes a robust legal framework to prohibit any product made with forced labour from being placed on the EU market, sold online, or exported from the EU. Importantly, the regulation applies universally, regardless of the product’s origin, industry, or stage in the supply chain. This unprecedented move positions the EU as a global leader in combating forced labour.
The regulation uses the International Labour Organization's (ILO) 11 indicators of forced labour to define violations, encompassing abuses like debt bondage, excessive overtime, and coercive working conditions. Notably, it also mandates that all components of a product comply with the regulation, even if forced labour is present in only part of the supply chain.
Why This Matters
Modern slavery affects an estimated 49.6 million people worldwide, with 27.6 million in forced labour, according to the Walk Free Global Slavery Index. Among these victims, 1 in 4 are children, and over half are women and girls. The FLR addresses this systemic issue by creating accountability for companies and ensuring that forced labour is not tolerated at any stage of production.
How the Regulation Works
The regulation introduces a Forced Labour Single Portal, a centralized database of high-risk products and regions. This tool, based on research from the ILO, UN, and other sources, will help companies identify and mitigate risks in their supply chains. However, the portal alone is insufficient for compliance. Companies must implement comprehensive due diligence measures to meet the regulation’s stringent requirements.
Enforcement will be carried out through investigations by national authorities and the European Commission. Companies have limited time to respond to inquiries—30 days for preliminary investigations and up to 60 days for full investigations. If a violation is confirmed, authorities can:
- Ban the product from the EU market.
- Mandate the withdrawal and disposal of affected products.
- Prohibit the export of these products to third countries, ensuring that they cannot re-enter the global market.
Violations will also result in public disclosure of the product, supplier, and evidence on the Forced Labour Single Portal.
What Makes the FLR Unique?
The FLR stands out among global forced labour laws, such as those in the U.S. and Canada, because it prohibits exporting non-compliant products to third countries. This ensures that products made with forced labour do not continue to circulate in other markets, reinforcing the EU’s commitment to ethical trade.
Additionally, the regulation is entirely agnostic to countries, regions, or industries, applying equally to all products. This comprehensive approach raises the bar for global supply chain accountability.
Preparing for Compliance
With the regulation set to apply in late 2027, companies must act now to prepare. Key steps include:
- Supply Chain Mapping: Gain visibility into every tier of the supply chain, including subcontractors and raw material sources.
- Risk Assessment: Identify high-risk regions and industries using tools like the Corruption Perception Index (CPI) and supplier monitoring systems.
- Due Diligence Procedures: Establish robust mechanisms to detect and address forced labour risks.
- Proactive Documentation: Gather evidence of compliance, including supplier licenses and worker records, to be ready for potential investigations.
Companies that fail to comply face severe consequences. Violations can lead to product bans, financial penalties, and reputational damage—sending a clear message that non-compliance is not an option.
Why the FLR is Unique
Unlike similar laws in other regions, such as the U.S. Uyghur Forced Labor Prevention Act (UFLPA), the EU FLR prohibits the re-export of banned products to third countries. This ensures that products made with forced labour do not circulate globally, setting a higher standard for ethical trade.
Furthermore, the FLR’s universal applicability—regardless of country, product type, or industry—demonstrates the EU’s commitment to eradicating forced labour comprehensively.
A Call to Action for Companies
Forced labour affects millions of lives, many of them children, and perpetuates inequality worldwide. The EU Forced Labour Regulation represents a powerful step forward in addressing this injustice. Companies now have both a legal obligation and a moral imperative to ensure that their supply chains are free from exploitation.
At Factlines, we help businesses navigate the complexities of supply chain due diligence, providing tools and expertise to ensure compliance with evolving regulations like the FLR. Contact us today to learn how we can support your journey toward ethical and sustainable operations.
