On 14 September 2022, the European Commission published its proposal for a Regulation on prohibiting products made with forced labour.
The proposal includes a general prohibition to market products made with forced labour. It covers all products made available within the EU market, meaning both products made in the EU for domestic consumption and for export, as well as imported goods.
All economic operators, including SMEs, making products available on the EU market or exporting from it fall within the scope of the new rules.
When competent authorities will determine that there is a substantiated concern, they will be required to start an investigation.
Although the draft Regulation foresees that competent authorities should focus their efforts on products that have been identified as subject to higher forced labour risks, the new rules are likely to entail widespread trade disruptions.
To support the implementation of the Regulation, the Commission is expected to issue guidelines, including forced labour due diligence guidance and information on risk indicators of forced labour. However, these guidelines are only expected 18 months after the legislation enters into force.
In addition, highlighting the urgent need for action to tackle forced labour, the European Commission wants the legislation to enter into force the day following its publication in the Official Journal of the European Union.
As a result from this draft legislation, businesses will suffer from increased costs, in particular related to setting-up procedures to monitor the supply chain.