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Supply Chain
EU Ban on Products Made with Forced Labor — Fierce Control and Non-Compliance Mechanisms Planned
By Yvonne Heinen-Foudeh, Senior International Correspondent
March 6 negotiators from the EU Parliament and Council reached a provisional agreement on new rules that ban products made with forced labor from entering the EU market.
The new regulation would create a framework for enforcing this ban, through investigations, new IT solutions, and cooperation with other authorities and countries.
According to the agreed text, national authorities or, if third countries are involved, the EU Commission, will investigate the suspected use of forced labor in companies’ supply chains. If the investigation concludes that forced labor has been used, the authorities can demand that relevant goods be withdrawn from the EU market and online marketplaces and confiscated at the borders. The goods would then have to be donated, recycled, or destroyed. Goods of strategic or critical importance for the Union may be withheld until the company eliminates forced labor from its supply chains. On top of that, organizations that do not comply can get charged with fines.
Improvement to be rewarded
A reasonable incentive of the draft – the chance for companies – expresis verbis along the entire textile and apparel supply chain that have been caught for a violation, is that entrepreneurs are allowed to remedy their abuses and then follow the strict regulations.
After the verified elimination of any forced labor issues that are involved in the production of their end product(s), companies may be allowed back on the market.
The goal of the deal – now having moved towards the next level of application, is – by Maria-Manuel Leitão-Marques from the Progressive Alliance of Socialists and Democrats in the European Parliament group: “…to assure the EU has an instrument to ban products made with forced labor from the Union market as well as to tackle various forms of forced labor, including when it is imposed by a state.
Berlaymont Building, EU Commission
No general additional due diligence requirements
The forced labor regulation focuses on products and will not place additional due diligence requirements on companies that do not use forced labor in their supply chains.
Nevertheless, it is often associated with the directive on Corporate Sustainability Due Diligence that was provisionally agreed to between the Parliament and Council, but that has so far not been given a final OK from the Council.
“Forced labor has been a reality for too long, and it remains a reality for too many. There were an estimated 27.6 million people affected by it in 2021, mostly in the private sector, but also victims of so-called state-sponsored forced labor,” EU- Parliament member Maria-Manuel Leitão-Marques.
Goods and segments of high-risk
At Parliament’s insistence, the Commission will draw up a list of specific economic sectors in specific geographical areas where state-imposed forced labor exists. This will then become a criterion to assess the need to open an investigation. The deal will enable the Commission to identify products or product groups for which importers and exporters will have to submit extra details to EU customs, such as information on the manufacturers and suppliers of these products.
No general additional due diligence requirementsThe forced labor regulation focuses on products and will not place additional due diligence requirements on companies that do not use forced labor in their supply chains. Nevertheless, it is often associated with the directive on Corporate Sustainability Due Diligence that was provisionally agreed to between the Parliament and Council, but that has so far not been given a final OK from the Council.
To enforce the established rules digital and collaboration tools will be put in place. The “Forced Labor Single Portal” would be set up. This will include guidelines, information on bans, a database of risk areas and sectors, as well as publicly available evidence and a whistleblower portal. A “Union Network Against Forced Labor Products” should help to improve cooperation between authorities.
The rules also foresee cooperation with third countries, for example in the context of existing dialogues or implementation of trade agreements. This may include information exchange on risk areas or products and sharing best practices, in particular with countries that have similar legislation in place. The Commission, acting as a lead competent authority, may also carry out checks and inspections in third countries if the relevant company and the government of the third country agree to it.
What’s next Both the European Parliament and Council will now have to give their final green light to the provisional agreement. The regulation will then be published in the Official Journal and enter into force the following day. EU countries will thereafter have 3 years to start applying the new rules.
To enforce the established rules digital and collaboration tools will be put in place. The “Forced Labor Single Portal” would be set up. This will include guidelines, information on bans, a database of risk areas and sectors, as well as publicly available evidence and a whistleblower portal. A “Union Network Against Forced Labor Products” should help to improve cooperation between authorities.
The rules also foresee cooperation with third countries, for example in the context of existing dialogues or implementation of trade agreements. This may include information exchange on risk areas or products and sharing best practices, in particular with countries that have similar legislation in place. The Commission, acting as a lead competent authority, may also carry out checks and inspections in third countries if the relevant company and the government of the third country agree to it.
What’s next Both the European Parliament and Council will now have to give their final green light to the provisional agreement. The regulation will then be published in the Official Journal and enter into force the following day. EU countries will thereafter have 3 years to start applying the new rules.
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