European Regulation on the Prohibition of Products Made Using Forced Labour: Key Takeaways for Employers in Europe

With the adoption and approval of the Regulation of the European Parliament and of the Council on the prohibition of products made using forced labour on the Union market on 19 November 2024, the EU has taken an important step in the fight against slavery and forced labour. This means that products made using forced labour will no longer be sold, offered for sale or exported from the EU. The Regulation applies to all products, regardless of whether they are made in the EU or outside it.

The International Labour Organisation (ILO) estimates the total number of people in forced labour at 27.6 million, the majority of whom are in the private sector. The proposal is therefore in line with the global trend to tackle and prevent forced labour, following both the United States and Canada, which have already introduced similar legislation. In addition to the Corporate Sustainability Due Diligence Directive (CSDDD), the new Regulation can be seen as an important initiative from the EU to protect human rights.

The Regulation could have a major impact on trade and supply chains in the EU. It is therefore crucial that Dutch market parties and employers are also aware of the risks of forced labour in their activities or those of their suppliers, and that they take the necessary steps to prevent, identify and remedy these risks. Below we explain the most important elements of the regulation.

• Database: The European Commission will create a database containing information on forced labour risks, based, among other things, on reports from international organisations. This database should support the Commission and national authorities in assessing possible violations and can help economic operators identify forced labour risks in the supply chain. 
• Risk-based approach: When determining whether forced labour is present, the Commission and national authorities will follow a risk-based approach. They will take into account factors such as the gravity and scale of the suspected forced labour, the volume and number of products involved, and the position and influence of economic operators in the supply chain. These criteria are set out in the Regulation. 
• Guidance: To help economic operators and competent authorities comply with the Regulation, the Commission will issue guidance. This guidance will include best practices for ending and remedying different types of forced labour, but will also include accompanying measures for small and medium-sized enterprises. Investigation: the regulation stipulates that the Commission will lead the investigation into forced labour if the suspected forced labour occurs outside the EU, while national authorities will lead the investigation if the suspected forced labour occurs within the EU. They will inform each other and cooperate in gathering information. Economic operators will be able to be heard at all stages of the investigation.
• Enforcement: If forced labour is found to be taking place, a decision can be made to ban, withdraw or dispose of a product. The final decision will be taken by the authority that led the investigation. The decision will also apply in all other Member States on the basis of mutual recognition. As such, the Regulation could have a major impact on trade and supply chains across Europe. Exceptions can be made for critical products or for components that are replaceable: for example, if one component of a washing machine is made using forced labour, that component must be disposed of, but not the entire final product.

Now that the proposal has been adopted, the Regulation will formally enter into force the day after publication. This is likely to happen shortly. The (most) requirements will only apply after a period of 36 months. This transitional period gives Member States and economic operators time to comply with the Regulation.