This briefing is for legal, compliance, sustainability and procurement leads at any company that sells products in the EU or exports from it, whatever its size, and particularly those sourcing from higher-risk sectors or regions.
Key takeaways
- The ban is absolute. Products made in whole or in part with forced labour, at any stage, can't be sold in or exported from the EU, including stock already in warehouses.
- Every company is in scope. There is no size threshold or sector exemption. Size affects which companies authorities focus on and how long they get, not whether the ban applies.
- The burden is on the authority, but the evidence is yours. Authorities can rely on circumstantial evidence, your public statements and your silence. Effort counts only if it shows the risk was dealt with.
- You have 30 working days to answer a preliminary information request. That is enough time to send evidence you already hold, not to build it. Start the evidence file for higher-risk products now.
The EU Forced Labour Regulation does not create new due diligence duties (Art. 1(3)). But its teeth effectively demand due diligence, because the ban has no grey zone. A product is either allowed on the EU market or it isn’t. The Commission's EU Forced Labour Regulation Guidelines (the “Guidelines”) call the prohibition “unconditional and absolute” (Guidelines s. 3.1).
The authority must prove a violation, not you (Art. 20(1); Recital 47; Guidelines s. 4.8.1.1). But good intentions are alone not enough. Effective due diligence can produce evidence that resolves an authority’s concerns. Effort counts only if it shows the risk of forced labour being used at any stage of the product’s lifecycle has been dealt with. As such, evidence decides the outcome, and much of it sits with you.
What the ban does
From 14 December 2027 (Art. 39), economic operators (any person or company) may not place or make available on the EU market, or export from it, products made in whole or in part with forced labour, at any stage of extraction, harvest, production or manufacture (Arts. 2(7), 3). So, one transistor produced with forced labour inside a larger device can bring the whole product into scope. The transistor’s share within the total product affects how urgently a case is prioritised, not whether the ban applies (Art. 14(2)(c)).
There is no grandfathering and the ban applies to stock on shelves or in warehouses on that date, even if produced or imported earlier. Only products that have reached end users escape withdrawal (Art. 1(2); Guidelines s. 3.1).
Who is caught
Any person or company placing or making products available on the EU market, or exporting them, is an economic operator. As such, there is no size threshold (Art. 2(9)). In addition, there is no sector exemption, and domestic products are covered as well as imports (Recital 18). Online sales count if they target EU end users, bringing into scope online shops based outside the EU (Art. 4). Services such as transport, warehousing and logistics fall outside (Guidelines s. 3.1).
SMEs get no exemption, but authorities must consider size when deciding whom to focus on and whether to extend deadlines (Arts. 14(4), 18(3)–(4)), and the Commission must provide support measures (Art. 10). None of this means an SME will be able to sell a banned component.
What ‘forced labour’ means
The Regulation adopts the ILO Convention No. 29 definition of forced labour, including forced child labour (Art. 2(1)). The Guidelines identify three elements: work or service, lack of voluntary consent, and coercion. Involuntariness and coercion must occur simultaneously at some point (Guidelines s. 3.2).
The Guidelines list 14 indicators for forced labour, plus 10 for state-imposed forced labour (Guidelines s. 3.4), from physical violence to subtler signs such as deception in recruitment, onerous hours and retained identity documents.
An indicator is not a finding; the totality of an individual’s situation is what counts. You are not always looking for someone in shackles, but for someone in work they did not freely choose and/or cannot freely leave (Guidelines s. 3.2.2).
How the Regulation operates
The Commission leads investigations where the suspected forced labour is outside the EU, and a national competent authority where it is inside a Member State (Art. 15). Anyone can submit information to them (Art. 9).
Preliminary phase
Where there is a suspicion of forced labour being present in the lifecycle of a product, the competent authority must ask relevant companies what they have done to identify, prevent, mitigate, end or remediate the risk of forced labour, unless the request would jeopardise the assessment (Art. 17(1)). Companies have 30 working days to reply to a preliminary information request (Art. 17(2)), which is enough to send evidence they hold, not to build it. No investigation opens if there is no substantiated concern, meaning a reasonable indication that a product was likely made with forced labour (Art. 2(16)), or if the concern has been eliminated, for example through effective due diligence (Art. 17(5)).
Investigation
If a substantiated concern exists, the company is notified (Art. 18(1)) and given 30 to 60 working days to submit further information, including who made and supplied the product (Art. 18(3)–(4)). The authority aims to decide within 9 months (Art. 20(1)).
What happens if a violation is found
The authority prohibits the product, orders its withdrawal and removal of online listings, and normally orders its disposal, or disposal of a replaceable part (Art. 20(4)). Companies get at least 30 working days to comply, or at least 10 working days for perishable goods, animals and plants (Art. 22(1)(b)).
Penalties, set by Member States, apply for failing to comply with a decision, not for the violation itself (Art. 37(1)). The Regulation sets no minimum or maximum. The Guidelines illustrate a basic penalty calculation of 1–4% of annual global turnover for highly serious non-compliance, before adjustments and subject to applicable national limits (Guidelines ss. 5.2.2.2, 5.2.2.3, 5.2.2.4). Beyond the financial penalties, the commercial disruption may be substantial, including loss of key products or components.
Why evidence decides
The competent authority carries the burden of proof (Art. 20(1); Recital 47; Guidelines s. 4.8.1.1), with the evidentiary threshold being administrative, rather than criminal. Authorities can consider circumstantial evidence, including companies’ public statements, media reports, satellite imagery and trade data (Guidelines s. 4.8.1.1). This means that public reporting, including CSRD statements, Transparency Act accounts and modern slavery statements, can become evidence. In our view, companies should be able to explain how their conclusions about forced labour align with their risk assessments. Unexplained inconsistencies may invite scrutiny.
Silence can also count against companies. Non-cooperation at the preliminary stage is “in principle” relevant evidence of a substantiated concern (Guidelines s. 4.5.1.3). If a company withholds information, misses a deadline without valid justification, misleads or obstructs the investigation, the authority may decide on other available facts (Arts. 17(4), 20(2)). Lack of traceability, where high-risk inputs may have been mixed in, “may weigh negatively” (Guidelines s. 4.8.1.1).
What authorities may request reads like a due diligence file: policies, risk assessments, grievance mechanisms, payroll records, supply chain maps and purchase orders (Guidelines ss. 4.7.1–4.7.3.5). Due diligence is not the only route: the Guidelines also name traceability, responsible purchasing, certification and worker-driven monitoring (Guidelines s. 4.5.1.1). We recommend combining these approaches into one proportionate process and evidence file. Traceability shows where a product came from; engagement with workers shows the conditions in which it was made.
What to do now
- Map. Identify which products and inputs come from higher-risk sectors or locations.
- Build. Implement a due diligence system that includes an evidence file for those lines, and record who holds each item.
- Test. Ask whether you could answer a preliminary request in 30 working days, and name a contact person (Guidelines s. 4.7).
Is your evidence ready?
If an authority asked tomorrow, could you show within 30 working days what you have done to identify, prevent and address forced labour risk in your supply chain? ReportingLab can help you test that: map where your risk sits, build the evidence file, and check that your public statements, including your sustainability statement, tell the same story.
Frequently asked questions about the EU Forced Labour Regulation
When does the EU Forced Labour Regulation apply?
From 14 December 2027 (Art. 39). There is no grandfathering: the ban covers products on shelves or in warehouses on that date, even if they were made or imported earlier. Only products that have already reached end users are outside withdrawal (Art. 1(2); Guidelines s. 3.1).
Does the Forced Labour Regulation apply to SMEs?
Yes. Any person, company or association placing or making products available on the EU market, or exporting them, is an economic operator (Art. 2(9)). Authorities must consider size and resources when deciding whom to focus on and when setting deadlines (Arts. 14(4), 18(3)–(4)), and the Commission must provide support measures (Art. 10).
Does the Regulation require due diligence?
Not as a standalone duty (Art. 1(3)). But no investigation opens where a concern has been eliminated, for example through effective due diligence (Art. 17(5)). The Guidelines also recognise traceability, responsible purchasing, certification and worker-driven monitoring (s. 4.5.1.1). In our view, these work best as parts of one due diligence process and evidence file.
What happens if a company doesn’t respond to an information request?
Non-cooperation at the preliminary stage is "in principle" relevant evidence of a substantiated concern (Guidelines s. 4.5.1.3). If a company withholds information, misses a deadline without justification, misleads or obstructs the investigation, the authority may decide on other available facts (Arts. 17(4), 20(2)).
Does a ban apply across the EU, and can it be lifted?
A decision is recognised and enforced in other Member States for products with the same identification information from the same supply chain (Art. 20(8)), and customs will refuse release and export (Art. 30). A company can request a review at any time with new substantial information (Art. 21(1)). Once forced labour is eliminated and the economic operator shows compliance with the decision, the decision is withdrawn for the future (Art. 21(3)).
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