On 13 March 2024, the European Council and European Parliament agreed the final text of the proposed EU Forced Labour Regulation (“Regulation“). This follows negotiations between the EU Council and Parliament which took place on 22 January 2024 and the European Council and European Parliament reaching a provisional agreement on the Regulation on 5 March 2024. The European Commission had initially proposed the Regulation on 14 September 2022.
For information on the key similarities and differences between the existing US forced labour regime and proposed EU approach, the timeline and next steps for the EU’s new legislation, and how companies can best prepare and ensure compliance across their supply chains, please see our Forced Labour Webinar, hosted by Jessica Mutton, Chandri Navarro and Esmee Kooke available here.
Scope
The text of the provisional agreement targets forced labour carried out across the globe by prohibiting companies or individuals from placing or making available on the EU market, or exporting from the EU market, products (including their components) that are made using forced labour. As the attention on the issue of forced labour increases, the Regulation also aims to remove the distortions of competition in the internal market that would result from divergences in national laws, regulations or administrative provisions regarding the placing and making available on the Union market of products made with forced labour.
The prohibition applies to products regardless of the sector, origin, or whether they are made domestically or imported, and also applies to each stage of a product’s supply chain, including its manufacture, harvest and extraction, and any working or processing related to the products.
Further information on the scope of the Regulation, including the investigatory authority of the Commission and Member State national competent authorities, can be found in our previous blog post here.
Next steps
The provisional agreement was endorsed by the European Parliament’s two committees, the Committee on Internal Market and Consumer Protection (IMCO) and Committee on International Trade (INTA), on 20 March 2024. To complete the legislative process, the text of the agreement as approved will now be submitted to the plenary of the European Parliament for official adoption by Parliament. This is expected to take place in the week of 22 April 2024.
Once adopted by Member of the European Parliament (MEPs) in plenary, the text would have to be formally approved by Ministers of EU Countries at a subsequent meeting of the European Council. If approved, the legislative procedure would be concluded at first reading and the legislative act would be published in the Official Journal, entering into force the day after publication. If the Council does not approve the text, the Council’s position would be communicated to the European Parliament and the proposed text would go to a second reading.
It is expected that the Regulation will enter into force by the summer of 2024. Member States will have up to 36 months to begin applying the Regulation from its entry into force, meaning companies should be prepared to begin complying with the Regulation’s requirements from mid-2027/2028. In the meantime, companies should begin to implement robust and effective compliance processes to address forced labour risks in their operations and value chains.
