Forced labour: the European Commission publishes its guidelines on the application of the EUFLR

I. What the regulation provides

Regulation (EU) 2024/3015 prohibits economic operators from placing, making available on the Union market, or exporting from the Union, products made with forced labour.

Its scope is particularly broad. The ban covers:

• all sectors and all types of products (including strategic, military and defence products);
• products manufactured in the Union as well as those imported;
• products in which only a part is made with forced labour, regardless of the importance of this part;
• forced labour occurring at any stage of the production chain (extraction, harvesting, production, manufacturing or processing), whether this stage takes place inside or outside the Union;
• remote sales, including online, when the offer is intended for end users in the Union.

On the other hand, services (transport, warehousing, logistics, etc.) do not fall within the scope of the regulation, even when linked to the placing of the product on the market.

The EUFLR clearly differs from existing regulations on forced labour and modern slavery. Some of these mainly impose transparency, reporting (such as the UK Modern Slavery Act), or due diligence obligations on companies, aiming to identify and prevent forced labour risks (as in the case of the Corporate Sustainability Due Diligence Directive, the CSDDD). The EUFLR is based on a different logic: that of product prohibition.

Thus, the question is no longer only whether a company has put appropriate procedures in place to identify and prevent forced labour risks, but whether the products it places on the Union market have been (wholly or partially) made using forced labour. The use of forced labour can therefore directly lead to the product being banned from the Union market, regardless of compliance or reporting processes already implemented by the company.

The regulation is based on recognised international standards, in particular the conventions of the International Labour Organization (ILO) on forced labour (Conventions No. 29, 105 and 182), as well as on the OECD and United Nations guiding principles on responsible business conduct.

II. Who is concerned?

The regulation applies to economic operators: any natural or legal person who places products on the Union market, makes them available on this market, or exports them from the Union (producers, manufacturers, importers, exporters, distributors, product suppliers).

No distinction is made according to the size of the company, sector of activity or origin of products, although competent authorities must, in their risk-based approach, take into account the size and resources of operators, in particular to protect SMEs.

Companies sourcing from complex supplier chains or those located in regions with particular forced labour risk (notably state-imposed forced labour) will need to be especially vigilant in their ability to identify, assess and address these risks.

III. When does the regulation apply?

The regulation will apply from 14 December 2027, including to products already manufactured or imported before this date, as long as they are still placed or made available on the market (on shelves, in warehouses, etc.). Products that have already reached the end user are not concerned.

Companies therefore have a preparation period to adapt their internal procedures, risk management systems and, where appropriate, their contractual relationships with suppliers.

IV. A tool to identify risks: the European database

The Commission is setting up a forced labour risk database (Forced Labour Single Portal), which will provide indicative, non-exhaustive information, based on verifiable and regularly updated data. This information will rely in particular on the work of the ILO, the United Nations, and institutional, academic or research organisations. Companies, especially SMEs, will be able to refer to it to guide their own risk identification approaches.

V. How does an investigation take place?

The competent authorities (the European Commission or the national competent authority) apply a risk-based approach to identify the products and operators to prioritise.

Three criteria must be jointly assessed to determine the level of risk and the priority of a case:

1. The extent and seriousness of the suspected forced labour, particularly when it is state-imposed;
2. The quantity or volume of the products concerned, made available on the Union market or exported from it;
3. The share of the final product affected by forced labour, assessed in light of its physical, functional or economic importance.

The investigation proceeds in several stages:

• Initial assessment: collection and analysis of available information (reports, risk database, public sources, etc.) to determine if there is a probability of violation.
• Preliminary phase: if this probability exists, the competent authority may request information from the company concerned on its actions to prevent, mitigate and end risks of forced labour. In principle, the company has 30 working days to respond. The aim is to determine whether there is a 'substantiated concern'.
• Formal investigation: opened in case of substantiated concern, enabling the authority to request further information, question other stakeholders (suppliers, trade unions, workers, NGOs) and, exceptionally, carry out on-site inspections.
• Decision: at the end of the investigation, the authority concludes to a violation or drops the case, in principle within a nine-month period.

The investigation may concern a part, a component or a whole product, a series or a category of products, or even be extended to other products or geographical areas in the event of indications of systematic use of forced labour.

VI. How must operators cooperate?

Economic operators must fully cooperate with competent authorities throughout the investigation and provide, within the set deadlines, accurate, relevant and complete information.

The information that may be requested mainly concerns three areas:

• the due diligence measures implemented to identify, prevent, mitigate or end forced labour risks;
• the working conditions at the site where forced labour is alleged;
• the identification, traceability and structure of the product's supply chain (suppliers, production sites, volumes, commercial and logistics documents).

VII. What happens if the investigation finds a violation?

A decision establishing a violation of the forced labour ban comprises, in particular:

• a general prohibition on placing on the market or exporting products concerned, applying to any operator (not only those targeted by the investigation);
• a withdrawal order for products already present on the Union market;
• a destruction order, or replacement of the component in question with one free of forced labour where possible;
• a compliance period (at least 30 working days for non-perishable products, 10 days for perishable ones), as well as information on review and appeal procedures.

A special regime exists for products within strategic or critical supply chains for the Union (critical raw materials, key technologies, etc.): to avoid disrupting the internal market, the authority may, instead of ordering destruction, require their sequestration while the company eliminates the identified forced labour.

VIII. What are the financial penalties?

Financial penalties do not punish the violation of the forced labour ban as such, but non-compliance with a decision establishing this violation. They may penalise in particular:

• placing products subject to a prohibition decision on the market;
• failure to withdraw or destroy the products concerned;
• failure to replace a component covered by the decision;
• failure to comply with an obligation to retain products (strategic chain regime).

Member States have some discretion in determining the amount and method for calculating penalties.

IX. In practice: how to prepare?

The regulation will not apply until December 2027, but companies can, in particular:

1. Map the supply chains, identifying the suppliers, subcontractors and production stages concerned;
2. Identify forced labour risks, in view of the countries, sectors, products and suppliers concerned, relying in particular on the European database;
3. Audit existing due diligence measures, to check if they effectively detect and address these risks. The guidelines devote a detailed section to due diligence on forced labour, built on the OECD's six-step framework;
4. Strengthen supplier control and traceability procedures;
5. Review supplier contracts, especially clauses on respect for human rights, access to information, audit and corrective measures;
6. Prepare a remediation mechanism, to respond quickly when a risk or proven case of forced labour is identified in the supply chain.