In 2021, an estimated 27.6 million people worldwide were affected by forced labour, primarily in the private sector in the textile, mining, agricultural and service industries (see ILO, IOM UN Migration, Walk free: Forced Labour and Forced Marriage – Global Estimates of Modern Slavery). To counteract this, the European Commission has launched the ‘EU Regulation 2024/3015 to Prevent Forced Labour’. This regulation came into force on 13 December 2024 and will be fully and bindingly applicable in all EU Member States as of 14 December 2027.
The FLR aims to eliminate forced labour from the ‘European Union's’ (EU) supply chains. ‘Forced labour’ under the FLR is defined – in line with the definition of the International Labour Organisation (ILO) – as ‘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’.
In light of this, the FLR imposes a general prohibition on ‘economic operators’ from placing products that are made with forced labour on the market for the first time, making products available further down the supply chain, or exporting products outside the EU. Unlike other regulations, e.g. the ‘EU Deforestation Regulation 2023/1115’ (EUDR), the FLR does not explicitly impose concrete (due diligence) obligations. It also explicitly does not intend to: “create additional due diligence obligations for economic operators other than those already provided for in Union or national law”.
Unlike what you would usually expect with product or ESG regulations, the FLR prohibition only addresses ‘economic operators’ in general, not specific categories of economic operators like producer, manufacturer, distributer, or an operator/trader as defined by the EUDR. Whilst the FLR differs between ‘exporters’ and ‘importers’, its general prohibition still applies only to ‘economic operators’, regardless of whether they import or export products. The scope of the FLR is broad but lacks concrete regulatory obligations.
Instead, the duties set out in the FLR primarily target the customs authorities, national competent supervisory authorities of the Member States, and the Commission. These entities will be responsible for ensuring that products manufactured under such circumstances are no longer placed on the market, made available or exported – regardless of their actual place of origin. This also applies to products offered online if their target group is within the EU.
Additionally, products with a high risk of forced labour are recorded in the European database ‘ICSMS - Information and Communication System for Market Surveillance’. This database has a public area with information for consumers, users and manufacturers, and a closed area for (EU/customs) authorities to facilitate investigations and information sharing. For example, you can use various filters to see which products from a particular country are currently being monitored.
So, what is required from economic operators? Although the FLR does not impose an explicit due diligence obligation, it encourages due diligence among economic operators to ensure that no forced labour occurs in their operations and supply chain. To ensure adequate due diligence relating to forced labour, the FLR relies upon mandatory due diligence requirements from other EU ESG legislation, like the ‘Corporate Sustainability Reporting Directive 2022/2464’ (CSRD). Other ESG measures could also be relevant, such as the due diligence obligation under the ‘Corporate Sustainability Due Diligence Directive 2024/1760’ (CSDDD). Even the latest published Omnibus-I proposals, which aim to amend the CSRD and CSDDD, do not change this (for more information, see: Omnibus I – Simplifying or overhauling the EU’s Sustainability Regime?).
To provide more guidance on due diligence related to addressing forced labour, the FLR also requires the Commission to publish guidelines in consultation with various stakeholders. These guidelines will also include advice for economic operators on conducting due diligence related to forced labour. They’ll also consider the different types of suppliers and sectors of activity into account, and provide best practices for ending and remediating forced labour, and responsible disengagement.
Finally, it’s important to note that not having a due diligence system could result in liability of the economic operators under the FLR. In this sense, conducting due diligence is indirectly required to avoid sanctions and enforcement.
Although the FLR applies to companies of all sizes and in all sectors, its supervision and enforcement are based on a ‘risk-based approach’. An investigation under the FLR is based on a two-phase system - a preliminary investigation and a formal investigation.
A formal investigation can only start if the preliminary phase finds ‘a substantiated concern’ regarding the violation of Article 3 FLR. If this has been identified, the lead competent authority must inform the ‘economic operators’ subject to the investigation on the scope and consequences of the investigation.
If the lead competent authority cannot establish that the products in question were made of forced labour and illegally on the EU market, it must close the investigation. However, the FLR allows a new investigation into the same product and economic operator in the case of new relevant information.
If the lead competent authority establishes that the products concerned are in violation of Article 3 FLR, it will adopt a decision containing remediating sanctions to take the products off the EU market. For example, the lead competent authority can order the withdrawal of products that are already on the market or prohibit their marketing and export. This decision is also binding in all other Member States due to the principle of mutual recognition. The products in question would then either be donated, recycled or destroyed. Products of critical importance to the EU can be withheld until the companies concerned have eliminated forced labour from their supply chains. Companies that fail to comply with these requirements can be fined.
It’s still unclear how drastically the regulation will affect individual economic operators in the member states. However, it’s important to note that the regulation does not impose any new obligations on companies themselves, but rather comprehensively holds national and EU authorities accountable. In particular, the catalogue of duties that the German Supply Chain Due Diligence Act (LkSG) already stipulates should be kept in mind here.
Nevertheless, companies should be aware that the issue is becoming even more of a focus. This should be a reason to critically scrutinise the company's internal compliance management system and pay particular attention to product-related and proactive risk management. This includes critically reviewing contracts with suppliers, either related to specific products or to specific production areas. The ICSMS tool is the primary source of information in this regard.
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