The EU Forced Labour Regulation (EU FLR), officially titled Regulation (EU) 2024/3015 of the European Parliament and Council on prohibiting products made with forced labour on the Union market, was published in the EU Official Journal on 12 December 2024. Although it will not apply to businesses until 14 December 2027, the regulation has already generated some concerns regarding its implications.
To help businesses better understand the EU FLR, Enact’s Nazrin Huseinzade and May Hylander hosted a webinar focused on clearing up common misconceptions, explaining the regulation’s alignment with existing frameworks, and offering practical guidance for compliance.
Clearing up common misunderstandings about EU FLR
- Does the EU FLR impose new compliance requirements for businesses?
- The EU FLR does not introduce entirely new obligations for businesses already subject to the existing national human rights due diligence (HRDD) laws like Loi de Vigilance (France), LkSG (Germany), or other laws transposing the EU Corporate Sustainability Due Diligence Directive (CSDDD). Rather, it builds on these frameworks.
- However, the regulation applies to all businesses, including SMEs, involved in importing, exporting, or trading goods within the EU. For such smaller companies not covered by HRDD laws, new obligations will arise, and the European Commission will issue specific guidance to support these companies in conducting due diligence.
- Do companies have any responsibilities if investigations are conducted by competent authorities?
- Company-driven HRDD plays a vital role in compliance. The regulation explicitly states that conducting effective HRDD—such as identifying and eliminating the forced labour indicators, as well as remediating the victims—will help companies avoid trade restrictions and successfully navigate enforcement reviews (e.g., lifting bans). Therefore, companies are advised to initiate HRDD efforts early and maintain comprehensive documentation of their actions.
- Will the EU FLR push companies to cut ties with suppliers at the first sign of forced labour, instead of engaging in ongoing human rights due diligence?
- The regulation aligns with international standards, such as the OECD Guidelines and UN Guiding Principles, as well as the existing HRDD laws at national and EU levels all of which emphasise disengagement as a last resort and discourage irresponsible disengagement (the “cut-and run” approach). Therefore, businesses should prioritise mitigation and remediation efforts over severing ties prematurely. That said, in cases of state-imposed forced labour, where leverage is minimal, disengagement may become necessary sooner.
Other questions addressed during the webinar
- How does the EU FLR differ from existing reporting laws (e.g., UK and Australia Modern Slavery Acts, CSRD) and HRDD regulations (e.g., CSDDD, LkSG)?
- How does the regulation approach forced labour in both private-sector and state-imposed contexts?
- What steps should companies take to prepare for compliance, especially while awaiting further guidance from the European Commission? The speakers also highlighted insights from U.S. forced labour trade restrictions under the UFLPA and the U.S. Tariff Act, which offer valuable lessons for EU businesses seeking to stay ahead of the enforcement trends.
Missed the live webinar?
If you couldn’t join us live, you can watch the recording below:
For tailored assistance in preparing for the EU FLR or developing robust human rights due diligence processes, reach out to our team:
- Nazrin Huseinzade (Forced Labour Lead): nazrin.huseinzade@enact.se
- May Hylander (Business and Human Rights Advisor): may.hylander@enact.se