It entered into force on 13 December 2024. EU regulation 2024/3015, which bans products made from forced labour on the Union market (hereinafter referred to as the ‘Regulation’ or ‘FLR’). The FLR will affect many international companies that trade in or export products from the EU. The ban will enter into force on 14 December 2027. Unlike other recently adopted human rights and ESG legislation, such as the EU Sustainability Due Diligence Directive (‘SDD’),CSDDD") or the Corporate Sustainability Reporting Directive ("CSRD"), the FLR will apply directly to companies without the need for further national implementing rules.

This article offers an overview of the FLR, examines the interaction between the FLR and other significant regimes such as the CSDDD, and highlights important steps for companies preparing to comply with the FLR.

Scope and key prohibition of FLR:

The FLR covers all companies operating in the EU (including importers and exporters), regardless of revenue or place of registration. This also includes businesses that sell products online or by other remote methods aimed at end-users in the EU.

The FLR establishes a ban on products made using forced labour, meaning that companies must not place or make available on the EU market or export from the EU any product that has been produced in whole or in part using forced labour. It defines forced labour as: International Labour Organization (ILO) Convention 1930 as “any work or service which is exacted from any person under the menace of any penalty and which he has not offered himself voluntarily.” The definition also includes forced child labour. This prohibition applies to forced labour inside and outside the EU at any stage of the supply chain.

Procedures for implementation and enforcement:

The FLR sets out the principles of investigation and enforcement. Here are some key points:

Authorities responsible for enforcement: Responsibility for enforcing the FLR will depend on the location of the suspected forced labour. If the suspicion arises outside the EU, the European Commission will act. If the suspicion arises within a Member State, the competent authority of that State will be responsible.

Risk-based approach: Authorities must assess the likelihood of a breach of the FLR using a risk-based approach. They must consider the level and severity of the suspicion of forced labour, the quantity or volume of products on the EU market and the proportion of the product produced using forced labour.

Investigation Process: The FLR defines an investigation process that can be initiated through a complaint or based on other available information. To initiate an investigation, a “reasonable concern” of a violation of the prohibition must be demonstrated, which means that objective, ascertainable and verifiable information must be available.

Result: If a product is found to have been produced using forced labour, the competent authority must decide to prohibit the placing of the product on the EU market or its export and may order the withdrawal of the products from the market. If the company fails to comply with the regulations, sanctions may be imposed.

Interaction with other significant legal regulations:

The FLR adds to the rapidly changing regulatory landscape and aims to complement the Corporate Sustainability Directive (CSDDD). It does not impose new obligations on companies beyond existing regulations, but may provide incentives for them to improve their human rights due diligence practices. For companies covered by the CSDDD, compliance with the CSDDD obligations may be important in minimising risk under the FLR, for example by mapping and addressing impacts in their value chains. Spring