{"id":2655,"date":"2026-08-21T13:36:49","date_gmt":"2026-08-21T12:36:49","guid":{"rendered":"https:\/\/www.newforesight.com\/?p=2655"},"modified":"2026-08-24T12:39:52","modified_gmt":"2026-08-24T11:39:52","slug":"from-due-diligence-to-market-access-what-the-eu-forced-labour-regulation-means-for-companies","status":"publish","type":"post","link":"https:\/\/www.newforesight.com\/nl\/2026\/08\/21\/from-due-diligence-to-market-access-what-the-eu-forced-labour-regulation-means-for-companies\/","title":{"rendered":"From due diligence to market access: what the EU Forced Labour Regulation means for companies"},"content":{"rendered":"
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Author: Daniel Viviers-Rasmussen, Head of Sustainable Sourcing and Value Chains, NewForesight.<\/em>
E-mail: daniel.viviers-rasmussen@newforesight.com<\/a>.<\/em><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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|<\/strong><\/span> What is the Forced Labour Regulation?<\/strong><\/em><\/h3>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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From 14 December 2027, companies will no longer be able to place products made wholly or partly with forced labour on the EU market or export these products from the EU. This is not limited to selected commodities, company size or direct suppliers: it applies to all products, all sectors and companies of every size, and can concern forced labour occurring anywhere in the supply chain.<\/strong><\/p>

On 26 June 2026 the European Commission published guidance on the Forced Labour Regulation (FLR), which is set to become applicable from 14 December 2027. The newly published guidance clarifies how authorities will investigate potential violations and what evidence companies may be expected to provide.<\/p>

Essentially, the FLR is a product-ban regulation<\/strong> and as such differs from corporate due diligence laws. The Regulation creates an obligation of result<\/strong>: that is, the product must not be made with forced labour.<\/p>

Unlike other EU sustainability regulations recently impacting companies, it does not prescribe a mandatory due diligence process, and a supplier code, certification or clean social audit will not, on its own, protect a product from investigation or prohibition.<\/p>

The guidance nevertheless makes clear that credible due diligence, traceability and worker-based evidence will be central to preventing violations and responding to investigations. Companies need to be able to connect their human rights due diligence to the specific products, components, production sites and workers concerned.<\/p>

Importantly, products made or imported before December 2027 can still be covered when they continue to be made available on the market after the application date.<\/strong> Companies therefore cannot treat December 2027 as the date on which preparations begin.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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|<\/strong><\/span> What happens if a violation is found?<\/strong><\/em><\/h3>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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Authorities may:<\/p>\n\n

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  • Prohibit the product from being placed or made available on the EU market or exported from it.<\/li>\n
  • Require products already in the supply chain to be withdrawn.<\/li>\n
  • Require the affected products \u2013 or a separable affected component \u2013 to be disposed of or replaced at the company\u2019s expense.<\/li>\n
  • Work with customs authorities to prevent affected goods from entering or leaving the EU.<\/li>\n
  • Impose penalties where a company fails to comply with the decision.<\/li>\n<\/ul>\n\n

    The business impact can therefore extend beyond a compliance fine. It may include stranded inventory, interrupted shipments, supplier replacement, loss of market access<\/strong> and disruption across an entire product line. The Regulation also provides for decisions to identify the relevant product in a way that can affect other operators dealing with it, not only the company initially investigated.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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    |<\/strong><\/span> What counts as forced labour?<\/strong><\/em><\/h3>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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    The guidance uses the ILO definition that work or service is forced labour where it involves both involuntariness and coercion<\/strong>. Indicators include recruitment deception, debt bondage, recruitment fees, withholding of wages or identity documents, excessive or compulsory overtime, restrictions on movement, threats, violence and abuse of workers\u2019 vulnerability. Separate structural indicators are provided for state-imposed forced labour.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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    |<\/strong><\/span> How will authorities enforce the regulation?<\/strong><\/em><\/h3>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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    Authorities will not systematically assess every product. They will use a risk-based enforcement approach<\/strong>. Cases will be prioritised according to three product-related factors:<\/p>

    1. The scale and severity of the suspected forced labour, including whether it is state-imposed<\/li>
    2. The quantity or value of affected products entering or circulating in the EU<\/li>
    3. The physical, functional or economic importance of the suspected component within the final product<\/li><\/ol>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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      It is important to emphasize that this relates to the authorities\u2019 enforcement priority, not what is considered legal. Even a small component remains covered by the prohibition.<\/p>

      During the initial and preliminary assessment<\/strong>, the authorities can ask a company how it has identified and addressed forced labour risks and why the alleged risk does or does not relate to its products. The authority then determines whether there is a \u201csubstantiated concern\u201d, meaning an objectively supported<\/em> and verifiable indication<\/em> that a product was probably made with forced labour.<\/p>

      If a formal investigation is opened, companies will normally receive between 30 and 60 working days<\/strong> to provide requested information. Inspections may be conducted within the EU and, exceptionally and with the necessary consent, outside it.<\/p>

      The authority carries the burden of establishing a violation<\/strong>. However, it may rely on a combination of direct, indirect and circumstantial evidence. Credible worker testimony, grievance records, production records, trade data and independent research may therefore outweigh an apparently clean audit. Social audits may contribute evidence, but audits conducted without unrestricted access or where workers cannot speak freely will not be considered credible.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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      |<\/span><\/strong> Who does it apply to and which sectors should pay particular attention?<\/strong><\/em><\/h3>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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      The Commission has not designated a definitive list of high-risk sectors, and the Regulation covers every physical product, regardless of sector or origin, including raw materials, agricultural goods, components and finished products. Services themselves are generally outside the product prohibition.<\/p>

      However, in the Commission’s 2026 preparedness program it is developing sector-specific information for the solar, textiles, electronics and semiconductors, agri-food, automotive and fisheries industries. This could be indicative of where the authorities will focus its enforcement efforts in the short term.<\/p>

      Forced labour issues are generally considered to occur in sectors that combine labour-intensive production, vulnerable or migrant workforces, complex supply chains, limited traceability and documented forced-labour risks. Thus, besides the industries targeted by the preparedness program, sectors such as mining and critical minerals, batteries, and retail should consider how they are commonly exposed through vulnerable workforces, high-risk inputs or multi-tier supply chain.<\/p>

      For forced labour outside the EU, importers may become a principal point of contact because upstream producers may have no direct EU presence but companies along the supply chain could be influenced. This is how different value chain actors can be influenced:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t

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      Directly covered by the Regulation<\/strong><\/h5><\/td><\/tr>