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The EU Council and EU Parliament reached a provisional agreement on the EU Forced Labour Ban Regulation. The text of the provisional agreement has not yet been published and is expected in the coming weeks. The ban will impact all companies operating in the EU and require companies to ensure that their products are “clean” of forced labour.

About the agreement

  • On 4 March 2024, the EU Parliament and EU Council reached a provisional agreement on the EU Forced Labour Ban Regulation. The Regulation bans all products made with forced labour from entering and being distributed on the EU market or being exported therefrom.
  • The text of the provisional agreement is expected in March. Due Diligence Design will provide a detailed brief once this has been published. 
  • Our analysis below is based on the EU Commission’s draft legislative proposal (September2022), the press releases from the EU Council and  EU Parliament on the provisional agreement, and the EU Parliament’s and EU Council’s negotiation positions. 

What companies need to know 

  • The law will ban all products made with forced labour from entering and being distributed on the EU market and from being exported from the EU market.
  • It will apply to all companies placing goods on the EU market, although we expect an emphasis on larger companies at early stages of the EU value chain. The EU Council proposed extending the scope to products offered for sale online or through other means of distance sales. However, we do not know if this is included in the final legislative text. 
  • The Regulation uses the ILO definition of forced labour, including the ILO’s 11 indicators for forced labour.
  • The law will cover all products and their components, regardless of the sector, origin or stage of the supply chain where forced labour took place. Non-compliant parts of a larger product may be disposed of and replaced with compliant goods. The EU Council’s press release uses the example of a car part made with forced labour. This likely refers to the recent case under the Uyghur Forced Labor Prevention Act (UFLPA), where Volkswagen was allowed to replace an automotive subcomponent in impounded vehicles. See Alert from 4 March.
  • The law will require companies to withdraw goods identified as being made with forced labour from the market. They must be donated, recycled or destroyed. Banned products will be allowed back on the EU market if a company can prove that it has eliminated forced labour from its supply chains. The EU Parliament’s proposed position went further, requiring remediation for workers harmed in the supply chain as a condition of returning the goods to market. However, from discussions with industry experts, we understand that this is not included in the final legislative text.
  • The EU Commission will introduce additional acts for products from conflict-affected and high-risk areas (CAHRAs) and countries with state-sponsored forced labour. The EU Parliament’s position proposed a reversal of burden of proof for certain goods produced in high-risk areas, whereby the competent authorities could presume that the products were made with forced labour. Based on commentary from industry stakeholders, we understand that this has not made it into the final legislative text. 
  • The EU Member State Competent Authorities and Customs Authorities will be responsible for enforcing the law and will conduct investigations. The investigatory process as set out in the Commission’s original proposal is extensive and will require substantial evidence and documentation, as per the UFLPA. Cases can be submitted by individuals and organisations, but the competent authorities decide what is investigated.  

Next steps 

  • The text of the provisional agreement will be formally approved by both the EU Council and EU Parliament. This is likely to take place in Q2 2024. The Regulation will go into force three years after the law is published in the EU’s Official Journal. Based on this timeline, the forced labour ban will start to apply to companies from 2027/2028. 
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