New European Union Rules for Merchandise Suspected of Forced Labor

Mar. 8, 2024
By: Hannah B. Kreinik

The European Union (“EU”) has reached internal agreement to implement rules dealing with imports of goods suspected of being produced using forced labor. This is in addition to existing member state laws intended to prevent the importation of forced labor goods. The legal processes involved will be the responsibility of the European Commission.

The new rules establish four standards to assess potential forced labor violations. These standards are: (1) the severity of the alleged forced labor practices and whether they are state sponsored, (2) the number of goods involved, (3) the parts of a product suspected to be produced with forced labor compared to the whole product, and (4) the distance between the EU economy and the forced labor issues. This is in contrast to the United States’ outright ban of all goods containing any article made with forced labor.

As part of the implementation of the rules a forced labor digital portal be created to house all the guidance, regional listing, and provides a space for forced labor informants (see our article on the U.S. equivalent portal here). This is a potentially valuable tool for companies with global supply chains.

The European Commission will head the investigations and bans on forced labor risks outside of the EU, and the individual member countries will coordinate forced labor concerns in their own states. However, forced labor choices made by individual members will be carried into other member states. The agreement also permits information sharing among nations with similar forced labor enforcement policies. The U.S. has previously worked with other nations on forced labor enforcement, as seen in our previous article, and the new EU agreement could create a stronger information link between the U.S. and EU on forced labor moving forward. Shared information among anti-forced labor nations has the potential to evolve into a larger network of international laws banning forced labor practices.

The new rules provide details on prospective guidance and treatment of goods made with forced labor. Future EU guidance will include details as to a list of areas with known state-backed forced labor to help assess the need for investigations for any in-coming products. Specifically, the deal permits products to be salvaged, even if forced labor is discovered in the production lines, if the parts made with forced labor are replaceable. The merchandise found to be made with forced labor will then have the option to be destroyed, donated, or recycled into other products, or, if significant for the EU, may be held to prove that there is no longer forced labor in the product’s supply chain. Violators of the agreement will be fined and banned until the importers can demonstrate that there is no forced labor in their production lines, and then the goods will be allowed back into the EU. The new forced labor agreement among the European nations will become effective as of three years from the publication of the agreement. Importers sending products into the EU should take this time to assess their supply chains and use their due diligence to trace any forced labor risk.

The attorneys at Barnes, Richardson & Colburn are here to help your company comply with forced labor laws in the United States and abroad.