Legal advice on the EU Forced Labour Regulation (FLR)

On 19 November 2024, the Council of the European Union adopted the final version of the ‘Regulation on the prohibition of products manufactured using forced labour on the Union market’, which had already been approved by the European Parliament in April. The so-called ‘Forced Labour Regulation’ (FLR) is intended to prevent the trade in goods produced in violation of fundamental human rights within the EU market. In this respect, the measure complements the German Supply Chain Due Diligence Act (LkSG) and other international legal instruments aimed at protecting human rights in the supply chain. The Regulation must now be published in the Official Journal of the EU. The provisions will come into force three years later.

Scope and content of the regulations

The central provision of the FLR is the prohibition on placing on the market, making available or exporting products manufactured using forced labour within the EU market. The definition of forced labour is taken from Article 2 of Convention No. 29 of the International Labour Organisation (International Labour Organisation, ILO) and means ‘any work or service which is required of a person under the threat of any penalty and for which that person has not offered himself or herself voluntarily’. There are a few exceptions to this, such as compulsory military service or, in certain circumstances, work carried out as a result of a court sentence. The Regulation does not impose any restrictions on specific companies. On the contrary, it is addressed to all ‘economic operators’, i.e. all natural and legal persons or associations of persons who place products on the Union market, make them available or export them from it.

Companies can already integrate the regulations into their existing systems

Interestingly, the FLR explicitly does not introduce any additional due diligence obligations beyond those already provided for under other European and national laws. This fact makes it all the more clear that various regulations relating to the supply chain must be considered in conjunction with one another. In this way, companies can identify synergies and save time and money during implementation.

So what should companies do?

The FLR does not contain a specific list of obligations that must now be implemented step by step. Instead, companies should keep the issue of forced labour in mind as part of their other supply chain due diligence obligations. The same principles apply as for the LkSG and similar legislation: transparency and control over their own supply chains should be increased. This includes carrying out detailed risk analyses to identify potential links to forced labour. Furthermore, regular due diligence assessments and the continuous monitoring of suppliers are required to ensure compliance with human rights standards. Companies should also invest in training their staff to raise awareness of the risks and consequences of forced labour.

Inspections and sanctions

The FLR contains detailed rules on investigations, inspections and cooperation between authorities. This is intended to enable the risks of forced labour in the supply chain to be effectively identified. In the event of a breach, the authorities may order a ban on the placing on the market, the supply or the export of goods. Furthermore, an order may be issued to recall or withdraw affected products from the market. If a company fails to comply with such an order, the Regulation provides for sanctions that are “effective, proportionate and dissuasive”. 

Other key provisions 

Companies operating internationally with supply obligations to the US must also, in particular, take into account the Uyghur Forced Labour Prevention Act (UFLPA), which aims to prevent the import of products linked to forced labour by the Uyghurs and applies even where only intermediate goods have been manufactured in the Xinjiang region. The FLR is not geographically restricted, but does, amongst other things, cover the situation in the Xinjiang region, from which an increasing number of companies are withdrawing. There are reports of massive human rights violations in the region in the context of re-education camps and forced labour. 

What we can offer you

Our experts on the Green Trade Team have closely followed the development of the EU Forced Labour Regulation. We offer your company bespoke solutions and strategic advice to meet the requirements of the Regulation, always with an eye to potential synergies with other regulations such as the LkSG, the EU Supply Chain Directive (CSDDD), the EU Deforestation Regulation (EUDR) or the EU Conflict Minerals Regulation. Through our global collaborations with partner law firms, we also incorporate international standards into our advice. Furthermore, we are happy to represent your company in the context of an official inspection or other regulatory measures.