The EU Forced Labour Regulation (FLR) was adopted on 12 December 2024 and applies from 14 December 2027. While it focuses mainly on actions to be taken by Member States and the Commission, businesses can begin taking steps now to prepare for its implementation.
Content and objectives
The FLR prohibits companies from placing and making available on the market and exporting products manufactured using forced labour (Article 1). The FLR contains numerous obligations for Member States in terms of systems to be set up and the responsibilities of authorities in enforcing it, primarily defining the tasks of the authorities and how they must ensure compliance. It does not go into detail about what economic operators should do to ensure/mitigate the risk of placing forced labour products on the market. This information will be contained in guidance which must be published by the Commission in consultation with other stakeholders by 14 June 2026.
The FLR treats all regions of the world the same. Unlike under US law (see US Uyghur Forced Labor Prevention Act), there is no presumption that particular goods or regions involve forced labour. Also unlike under US law, the FLR does not reverse the burden of proof, meaning EU authorities need to prove that forced labour has been used (Recital 47).
Forced labour is all work or service exacted from any person under the menace of any penalty and for which the said person has not offered themself voluntarily (Article 2(1) in conjunction with Article 2 of ILO Convention No. 29 on Forced Labour).
The FLR applies to all sectors and levels of the supply chain. A product is made with forced labour if forced labour has been used in whole or in part at any stage of its extraction, harvest, production or manufacture, including in the work or processing related to the product (Article 2(7-8)). Consequently, products that contain components produced through forced labour at any stage of the supply chain fall under the scope of the FLR. This means that if a single component of a product is made with forced labour, the entire product is deemed non-compliant.
Who is impacted?
The FLD covers all economic operators, i.e. any natural or legal person or association of persons placing or making available products on the Union market or exporting products, with no differentiation by company size, location or legal form (Article 2(9)).
Oversight
Competent authorities responsible for enforcing the FLR will be designated by each Member State (Article 5). These authorities will monitor prohibited products, identify violations, and implement necessary sanctions.
Whether or not a product has been made with forced labour is determined by way of investigations by the lead competent authorities. Which authority acts as lead depends on whether the forced labour is suspected in an EU Member State or outside the EU. If forced labour is suspected outside the EU, the European Commission takes the role of lead, in all other cases it will be the designated authority based in the respective Member State.
A full investigation of the products and economic operators concerned will only be launched by the respective authority once a preliminary investigation has indicated a substantiated concern of a violation (Article 17).
In connection with a preliminary investigation, the lead competent authority is generally expected to request information from the economic operators being assessed and, where relevant, from other product suppliers, on the actions they have taken to identify, prevent, mitigate, bring to an end to or remediate risks of forced labour in their operations and supply chains with respect to the applicable products. The lead competent authority also may request information from other relevant stakeholders.
Economic operators are required to respond to an information request within 30 working days. Within 30 working days after receiving the information, the lead competent authority is required to finish the preliminary phase of its investigation.
If the lead competent authority determines there is a substantiated concern of forced labour, it will initiate an investigation of the relevant products and economic operators (Article 18). The lead competent authority is required to inform relevant economic operators within three working days of the decision to initiate the investigation.
The lead competent authority may require the economic operator(s) under investigation to submit information, including on the supply chain. In doing so, the lead competent authority is required, as far as possible, to prioritise the economic operators under investigation involved in the steps of the supply chain as close as possible to where the forced labour is likely occurring and to take into account the size and economic resources of the economic operators, the quantity of products concerned, the complexity of the supply chain and the scale of suspected forced labour.
The economic operator and any other stakeholders must be given between 30 and 60 working days to submit requested information. In exceptional situations where the lead competent authority deems it necessary, it may conduct field inspections. The lead competent authority may establish that the FLR has been violated on the basis of any facts available where it was not possible to gather information and evidence (e.g. where there is a failure to cooperate by the economic operator).
Sanctions for non-compliance
If the lead competent authority determines that the products concerned were placed or made available on the EU market or are being exported in violation of the FLR, it will adopt a decision (Article 20(4)):
- prohibiting the products from being placed or made available on the EU market and from being exported
- requiring the economic operator(s) subject to the investigation to withdraw the products already placed or made available on the EU market and to remove online content referring to the products
- requiring the economic operator(s) to dispose of the products or, if parts of the product are found to violate the FLR, those parts.
If the economic operator demonstrates that it has complied with the lead competent authority’s decision and has eliminated forced labour from its operations or supply chain with respect to the products concerned, the lead competent authority will withdraw its decision.
Member States are responsible for laying down the rules on penalties for non-compliance with a decision and for taking all measures necessary to ensure that they are implemented in accordance with national law (Article 37(1) FLR).
How to prepare for compliance
The FLR itself does not impose many direct obligations on economic operators other than the blanket prohibition on placing forced labour products on the EU market and in terms of response to investigations and orders, although the Commission does have to produce guidance on compliance aspects. Having said that, there are steps that businesses can take now to help ensure they are ready for when the legislation applies.
- Although the FLR does not impose a due diligence obligation on economic operators, proactive action on due diligence in relation to forced labour should be taken. The FLR repeatedly mentions that the due diligence actions of economic operators in preventing forced labour, eliminating forced labour and taking remedial measures, will be taken into account by the investigating authorities. “Due diligence in relation to forced labour” (see e.g. Articles 2(3), 11, 17(5)) means efforts by economic operators to implement mandatory requirements, voluntary guidelines, recommendations or practices to identify, prevent, mitigate or bring an end to the use of forced labour with respect to products that are to be placed or to be made available on the EU market or to be exported.
- A comprehensive supply chain compliance management system should be established and implemented. Sufficient records should be kept to prove that the business can assess, identify, prevent, mitigate and terminate the risks of forced labour in economic operators’ business activities and supply chains. Economic operators should update their policies regarding forced labour and communicate them to their suppliers for their explicit commitment. The contracts with the suppliers should include relevant clauses, clearly stipulating the obligation to prevent forced labour, to cooperate on audit/investigations, and the consequences of non-compliance.
- For high-risk sectors, a full supply chain traceability mechanism should be set up. This should cover the entire chain from primary raw materials to manufactured products, and demonstrate physical, transactional and financial flows based on inventory, production and sales records.
- Economic operators should pay close attention to relevant EU regulatory updates and the database which the Commission is setting up to help identify areas and products at risk of involving forced labour. They should also keep in mind other complementary national and EU legislation. For example, forced labour due diligence is contemplated by the recently adopted EU Corporate Sustainability Due Diligence Directive (CSDDD). For larger economic operators, their CSDDD compliance initiatives will presumably stand them in good stead for compliance with the FLR. Conversely, a forced labour finding under the FLR may trigger action or create the risk of liability under the CSDDD. In addition, the EU Corporate Sustainability Reporting Directive (CSRD) contemplates disclosure requirements relating to forced labour where there is a material or financial impact.
Once the Commission guidance is published, further steps may be required, but in the meantime, these actions should place economic operators in a good position.
What about the UK?
The UK's equivalent to the FLR is the Modern Slavery Act 2015 (MSA). The MSA creates three types of criminal offence relating to slavery or servitude, forced or compulsory labour, and human trafficking. S54 MSA requires all businesses with UK operations and revenues of over £36m to publish an annual statement disclosing their approach to forced labour on their website and the steps they have taken to ensure slavery and human trafficking are not taking place in any part of its business or supply chains. These statements can be placed on a government-run registry to make them more visible. The Home Office has produced guidance on who is required to complete a statement and what it should contain.
Since the MSA came into effect, there have been several failed Private Members' Bills aiming to introduce more stringent requirements and a number of government announcements setting out plans to update the MSA, none of which have so far materialised. Most recently, the House of Lords Committee on the MSA published a call for evidence on the effectiveness and impact of the MSA in February 2024. In October 2024, the Committee reported its findings and made recommendations for reform. These included strengthened sanctions for non-compliance, mandatory reporting for public bodies, and a requirement for companies over a set threshold to carry out supply chain due diligence on modern slavery.
The UK government published its response to the House of Lords Committee report in December 2024. While not setting out immediate plans for change, the government recognised that what had been a world-leading regime, risked falling behind in the context of international (and EU) developments. Without committing to tangible change, the government said it was taking the Lords Committee recommendations seriously. In particular, it has said it will:
- make the government-run register of annual modern slavery statements more transparent, potentially introducing a data dashboard to be made publicly available
- consider how to strengthen penalties for non-compliance with the duty to produce a s54 statement
- update guidance on producing a s54 statement
- consider whether to bring public bodies into scope of the s54 requirement, particular in the healthcare sector. In fact, the government has consulted on legislation and guidance to tackle modern slavery in NHS procurement.
The consultation closed on 13 February 2025 and the government is now considering the responses.
Part of the ESG picture
The prevention of forced labour or modern slavery in the supply chain and related due diligence and reporting requirements, are very much part of the wider ESG framework for businesses and sit alongside sustainability and other governance requirements. While the details of compliance may differ between jurisdictions, the fundamental principles are similar which should make compliance more straightforward for businesses than might first appear.
