The Council of the European Union has finally adopted the European Forced Labor Regulation. This regulation aims to eradicate from the European market products made using forced labor. It will enter into force at the end of 2027 and impact all economic players that operate within the European economic market, who are advised to start preparing now to meet their obligations.
After the European Parliament adopted the European Forced Labor Regulation in April 2024 (on which we previously wrote), the Council of the European Union on November 19, 2024 adopted the new regulation on the ban of products produced using forced labor.
It will apply as of December 14, 2027 to all economic operators—without limitation—to ban from the European market imported or exported products made with forced labor at any stage of the supply chain.
IMPLICATIONS
A ban of a product could result in high losses and a negative public image of the product or any company associated with the product. Therefore, if companies want to continue operating in the European market, they will need to investigate their supply chains for risks and signs of forced labor and change their operations accordingly to comply with the European Forced Labor Regulation.
It remains to be seen how the regulation will be implemented in practice and to what extent the risk of reputational and financial damage caused by the sale of products made with forced labor will change the European market, and in particular how such risk will be distributed within the supply chain.
A LOOK AHEAD
By June 14, 2026, the European Commission will have established and made publicly available a database indicating specific forced labor risk areas, products, or product groups. Furthermore, the Commission will publish information on implementation and guidelines, including on due diligence in relation to forced labor, among others. They will link to other acts in connection with the European Green Deal, such as the Corporate Sustainability Due Diligence Directive and the Corporate Sustainability Reporting Directive.
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