European Union: A new EU trade instrument to ban products made by forced labour: what do we know so far?
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Regulatory and Public Affairs Director
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As Regulatory & Public Affairs Director in Brussels, I assist companies facing an unprecedented wave of new EU regulation that will have an impact on every business operating in the digital and data-related economy. I help companies navigate complex EU decision-making processes and understand the practical application of the law to their sectors.
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Forced labour is explicitly prohibited by the European Union’s Charter of Fundamental Rights. The International Labour Organisation provides the following definition for forced labour: “all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily.” With the entry into force of the U.S.’s Uyghur Forced Labor Prevention Act on 21 June, Members of the European Parliament and NGOs have voiced their demands for the EU to come forward with a specific legislative measure to address forced labour, which is now expected after the summer break.
Background
In September 2021, European Commission President Ursula Von der Leyen announced in the European Parliament a new initiative to ban products made by forced labour. Since then, the Commission has presented several legislative and non-legislative initiatives touching upon this problem indirectly, such as the Communication on Decent Work Worldwide, the proposal for a Directive on corporate sustainability due diligence and the Communication “The power of trade partnerships: together for green and just economic growth”.
In April 2022, the European Parliament’s Committee on International Trade exchanged views with the Commission regarding the future legislative instrument to effectively ban products made or harvested by forced labour. In June, the plenary session of the European Parliament adopted a Motion for a Resolution calling for “a new WTO-compatible trade instrument to complement the corporate sustainability due diligence rules, banning the import and export of products made or transported by forced labour and which should be complemented with measures for intra-EU trade”, among other requests.
Additionally, the joint statement made on 16 May 2022 at the Ministerial Meeting of the EU-US Trade and Technology Council, which serves as a forum for the United States and the European Union to coordinate approaches to key global trade, economic and technology issues, included several references to the eradication of forced labour and child labour.
Finally, on 23 May 2022, the Commission launched a call for evidence for the initiative “Effectively banning products produced, extracted or harvested with forced labour”, which was open to feedback until 20 June 2022.
Insights into the instrument’s design and enforcement
The Commission has underlined that addressing forced labour in the global value chain is an EU priority that requires a multi-layered approach. According to Dubravka Šuica, Commissioner for Democracy and Demography, the initiative aims to effectively ban the placing on the EU market of products made wholly, or in part, by forced labour.
The main takeaways extracted from the remarks of Commissioner Šuica before the European Parliament on 9 June 2022 are:
- The aim of the legislative proposal is to effectively prohibit the placing on the EU market of products made by forced labour, and this marketing prohibition would cover both domestic and imported products;
- The Commission’s Executive Vice-President Dombrovskis and Internal Market Commissioner Thierry Breton co-lead on this file, with all relevant Commission services as well as the External Action Service closely associated;
- The instruments would have a risk-based enforcement system, built on international standards and complementing existing horizontal and sectorial EU initiatives, in particular due diligence and transparency obligations;
- The measure would introduce a prohibition to place products made with forced labour on the EU market;
- The relevant legal basis could be Article 114 of the Treaty on the Functioning of the European Union (“Treaty”), possibly combined with Article 207 of the Treaty if deemed relevant;
- The legislative proposal is expected to respond to the Recommendations of the future of Europe to fight against child labour;
- It should recognise the role of due diligence in identifying, preventing, mitigating and accounting for the use of forced labour in value chains while being coherent with the due diligence obligations established in existing initiatives;
- The proposal should consider the specific situation of small and medium-sized enterprises (SMEs), both in its design and enforcement;
- It should avoid placing unnecessary additional administrative burdens on businesses and the enforcement authorities, and the EU should provide tools to help them with implementation.
Next steps:
According to a provisional European Commission agenda, a legislative initiative for a “Forced labour products ban” could be presented on 13 September 2022. This date, subject to change, coincides with the September European Parliament Plenary session in Strasbourg.
For further information please contact Francine Cunningham and Lluís Girbau Cabanas.
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