EU Forced Labour Regulation to Take Effect from 2027

On 12 December 2024, the EU published the new regulation banning products made with forced labour in its Official Journal. Known as the Forced Labour Regulation (Regulation (EU) 2024/3015), this law will impact businesses selling goods within or from the EU, taking full effect by the end of 2027.

Part of a Broader Push for Transparency and Due Diligence

The Forced Labour Regulation is the latest in a series of EU laws aimed at increasing supply chain transparency and ensuring ethical business practices.

A Comprehensive Ban on Forced Labour Products

The regulation prohibits economic operators—defined as any natural or legal entity—from placing on the EU market, making available for sale (including online sales targeting EU consumers), or exporting any products made with forced labour.

Unlike sector-specific laws such as the EU Deforestation Regulation (covering products like cattle, coffee, and wood) or the EU Conflict Minerals Regulation (which applies to certain raw materials), this regulation applies to all products, across all industries, regardless of their country of origin. This broad scope differs from legislation in other jurisdictions, such as the U.S. Uyghur Forced Labour Prevention Act, which focuses on specific regions.

Definition of Forced Labour Aligned with ILO Standards

The regulation aligns with the International Labour Organization (ILO) definition of forced labour, covering all work or services extracted under coercion, threats, or penalties, including forced work as a means of discipline or discrimination.

Covers the Entire Supply Chain

The ban applies to every stage of a product’s lifecycle—from extraction, harvesting, and manufacturing to processing and assembly. Even if forced labour is involved in only one component, the entire product may be prohibited.

Due Diligence Expectations and Guidance

Although the regulation does not impose new due diligence requirements beyond existing EU laws, any due diligence already conducted will be taken into account during investigations. The European Commission will issue guidelines within 18 months, providing best practices for identifying and addressing forced labour risks in supply chains.

Enforcement: Risk-Based Investigations

Authorities will conduct targeted investigations, prioritizing cases based on factors such as:

• The severity and scale of suspected forced labour
• The volume of affected products in the EU market
• The complexity of the supply chain
• The financial and operational capacity of the economic operator

Authorities will rely on databases of past non-compliance cases, reports from organizations like the ILO, and a forthcoming EU risk database highlighting high-risk products and regions.

Decision-Making and Consequences

Authorities will have up to nine months to reach a decision in cases of suspected violations. If forced labour is confirmed, they may:

• Ban the product from the EU market
• Require withdrawal of products already sold
• Order removal of online product listings
• Mandate disposal of violating goods

If only a specific component is non-compliant and can be replaced, companies may be required to swap out the affected part instead of discarding the entire product.

Failure to cooperate with investigations (e.g., refusing to provide information) may result in adverse decisions and potential penalties.

Penalties for Non-Compliance

Companies found in violation may face fines and other penalties deemed “effective, proportionate, and dissuasive.” Authorities will consider factors such as:

• The severity and duration of non-compliance
• Past violations
• The level of cooperation with authorities

Implementation Timeline (2024–2027)

• By December 2025: EU member states must designate competent authorities.
• By mid-2026: The Commission will issue guidelines and create a forced labour risk database.
• By Q4 2027: The regulation becomes fully enforceable.

Steps Companies Should Take Now

To prepare for compliance, businesses should:
✅ Implement supplier codes of conduct and ethical sourcing policies
✅ Strengthen onboarding, monitoring, and auditing procedures for suppliers
✅ Incorporate modern slavery clauses in supply agreements
✅ Maintain clear records of product supply chains
✅ Assign internal responsibility for forced labour compliance, consulting external experts where needed
✅ Develop risk-mitigation and remediation strategies
✅ Provide employee training on modern slavery risks

With enforcement set to begin in less than three years, businesses should act now to safeguard their operations and avoid potential penalties.