EU Forced Labour Regulation: Why Companies Should Take the FLR Seriously Now

The EU Forced Labour Regulation is increasingly moving towards the practical implementation phase: the new Implementing Regulation (EU) 2026/903 of 24 April 2026 clarifies technical and administrative questions. Initial guidance from the Commission is expected to be published by mid-June.

Legal Framework and Differences from LkSG and CSDDD

Regulation (EU) 2024/3015 on the prohibition of products made with forced labour on the Union market (Forced Labour Regulation, FLR) was adopted in late 2024 (we reported). Its central provision is a product-related market ban. Products manufactured wholly or partly using forced labour may in future neither be placed on or made available on the Union market, nor exported from the EU. The Regulation thus goes beyond a mere import ban. It also captures exports from the EU as well as products manufactured or further processed within the Union.

The regulatory approach of the Regulation differs significantly from instruments such as the German Supply Chain Due Diligence Act (LkSG) or the European Corporate Sustainability Due Diligence Directive (CSDDD). Whilst the LkSG and CSDDD primarily focus on the conduct of certain companies, the FLR targets the specific product.

The LkSG and CSDDD require covered companies to comply with human rights and environmental due diligence obligations across their supply chains. These include, in particular, the establishment of a risk management system, regular risk analyses, the adoption of preventive and remedial measures where necessary, a functioning complaints mechanism, and documentation and reporting obligations.

No New Obligations for Companies under the FLR

The FLR operates differently. It does not introduce a new general catalogue of obligations requiring companies to continuously fulfil certain due diligence measures. Its starting point is rather the individual product: if a product has been manufactured wholly or partly using forced labour, it may in principle not be placed on the Union market, made available there, or exported from the EU. A "product made with forced labour" exists under Article 2(7) FLR where forced labour has been used wholly or partly at any stage of extraction, harvesting, manufacturing or production, including the working or processing at any stage of the supply chain. Accordingly, even a tainted raw material or a tainted intermediate product can result in the finished end product falling within the market ban under Article 3 FLR.

How companies ensure compliance with the ban is initially left to their own discretion.

This does not mean, however, that due diligence is irrelevant for the FLR. On the contrary: even though the Regulation does not formally create an additional general due diligence catalogue, existing review systems become highly important in practice. In the event of a suspicion, companies must be able to demonstrate what information they hold regarding the supply chain, what risks they have assessed, and what measures against forced labour have been taken. Due diligence processes thus become relevant not directly as an independent obligation, but indirectly as a defence and evidence tool — or indeed are necessary in order to ensure compliance with the FLR's central prohibition at all.

It is precisely for this reason that the FLR complements the existing supply chain regime rather than replacing it. The LkSG and CSDDD target the structure and organisation of corporate responsibility. The FLR focuses on the outcome: a product linked to forced labour should not be permitted to remain on the EU market. For companies, this means that supply chain compliance should in future no longer be understood merely as an abstract organisational obligation, but must also be considered on a product-specific basis — that is, with regard to specific goods, components, raw materials, and production stages.

The Regulation applies irrespective of sector, company size, or the country of origin of the product. Moreover, pursuant to Article 4 FLR, it expressly also covers online trade. This means that not only traditional importers and manufacturers, but also traders, platform operators, and e-commerce businesses may fall within its scope.

Risk-Based Enforcement

Enforcement of the Regulation follows a risk-based approach (Article 14 FLR). The competent authority is generally the national authority where the alleged forced labour has occurred within the EU (Article 15 FLR). Where the focus of the alleged forced labour lies outside the EU, the Commission takes the lead. The procedure is structured in stages.

Firstly, a preliminary examination phase takes place under Article 17 FLR. During this phase, the lead authority assesses whether the available information is sufficient to initiate a formal investigation. In this context, the economic operators concerned may be requested to provide information on the measures they have taken to identify, prevent, mitigate, bring to an end, or remedy risks of forced labour in their operations and supply chains in relation to the products under review. If the suspicion is substantiated, a formal investigation may be initiated under Article 18 FLR. In the course of further proceedings, on-site inspections may also be carried out under Article 19 FLR. In practice, companies may therefore be required at an early stage to present supply chain information, due diligence documentation, audit reports, supplier declarations, or comparable evidence.

Where a violation is established, the authorities may order far-reaching measures. These include, in particular, the prohibition of placing on the market, making available, or exporting the affected products, the withdrawal (Article 24 FLR) of goods already on the market, and their recycling, donation, or disposal (Article 25 FLR). For companies, an established violation may therefore entail not only legal but also significant economic and reputational consequences.

Current Status: Implementing Regulation and Guidance

Whilst the central prohibitions only apply from 14 December 2027, the FLR is no longer an abstract future topic for companies, as implementation is now becoming more concrete. In particular, the new Implementing Regulation (EU) 2026/903 was adopted on 24 April 2026.

It governs, in particular, the use and functionalities of the forced labour module within the Information and Communication System for Market Surveillance, namely the so-called ICSMS "forced labour" module. This module is intended to facilitate communication between the Commission, the competent authorities of the Member States, and the customs authorities in connection with the implementation and application of the FLR (Article 1 Implementing Regulation (EU) 2026/903), which appears highly sensible given the FLR's complex administrative competence arrangements.

Through this system, information relating to FLR proceedings is to be exchanged in a structured manner in future. This includes, in particular, notifications regarding the initiation of investigations, information on affected products and economic operators, decisions on violations of the market ban, and information on withdrawal and disposal measures (cf. Articles 4, 6, and 7 Implementing Regulation (EU) 2026/903).

Although the Implementing Regulation thus primarily addresses technical and administrative questions of implementation, its adoption makes clear: the EU is already beginning to build the enforcement architecture of the FLR.

Alongside the technical implementation, the practical specification of the FLR is also coming to the fore. Whilst the Regulation already contains the central market ban and provisions on administrative enforcement powers, important questions remain open for practical application: what information should authorities consider in the event of a suspicion? What documentation can companies submit? What role do existing due diligence and compliance systems play? And how can SMEs in particular be prepared for the new requirements? In order to gather questions and concerns, the Commission conducted a consultation procedure ("call for evidence") from 6 February to 6 March 2026.

Such a call for evidence is a preparatory consultation instrument of the Commission: stakeholders may submit observations, practical experience, concerns, and proposals before the Commission drafts guidance or other interpretative aids on legal acts. The consultation procedure thus forms part of the FLR's implementation phase. The background is Article 11 FLR: accordingly, the Commission must publish guidance on the application of the Regulation by 14 June 2026. This guidance is intended to help authorities, companies, and other stakeholders to implement the new rules in practice. According to the Commission, the guidance is to enable a predictable and smooth implementation, minimise the burden on administration and companies, clarify roles and responsibilities, and support capacity building. The procedure received 160 submissions. This demonstrates that the concrete implementation of the FLR is already being discussed intensively prior to its date of application.

Conclusion: Not a Topic for 2027, but Already Relevant Now

Although the FLR expressly does not create a new general due diligence catalogue, it will have considerable practical implications for supply chain compliance. In the event of a suspicion, companies must be able to demonstrate at short notice what supply chain information they hold, what risks they have identified, and what measures against forced labour have been taken. The Regulation thus operates on a product-specific basis, yet in practice creates a strong incentive to align existing human rights risk analyses, supplier documentation, and escalation processes with forced labour risks at an early stage.

The FLR is therefore not a topic for the end of 2027, but is already of great relevance today. The Implementing Regulation from April and the Commission guidance expected in June can provide companies with an initial reference point for concrete implementation questions.