EU Forced Labour Regulation – how companies must prepare
The EU Forced Labour Regulation (Regulation (EU) 2024/3015) was adopted in November 2024 and applies from 14 December 2027. It prohibits placing on the EU market, and exporting from it, any product made with forced labour.
In June 2026 the European Commission published its guidelines on how the prohibition will be applied, together with a single portal through which anyone can submit information about suspected forced labour. The guidelines are the clearest signal so far of what authorities will expect — and they confirm that due diligence is not a safe harbour: a product can still be banned even where a company has done its work properly.
The obligation reaches across the whole supply chain, in every sector, whatever a product’s origin. In practice it is an extension of human rights due diligence into a hard market-access rule.
Three ways to prepare
Choose the option that fits your company's starting point. Delivered together with Bethics Oy.
From risk assessment to supplier engagement
For companies that have already completed a risk assessment.
A review of your own purchasing practices. Targeted questionnaires and discussion guides for high-risk suppliers. An updated supplier code of conduct, supplier questionnaire and contract clauses. Requires an existing risk assessment, which we review at the kick-off meeting.
Document update
For companies that want to update a single document.
We review your supplier code of conduct, supplier questionnaire or contract clauses against the Regulation, and you receive a gap memo with proposed changes. The fee is credited if your company orders package 1 or 2 within three months.
What does the Regulation require?
A full prohibition: no product made with forced labour may be imported, sold or exported in the EU. The guidelines confirm there is no grandfathering — stock already sitting in a warehouse is covered.
The ILO definition: work exacted under the menace of a penalty and not offered voluntarily. The guidelines apply the ILO’s three cumulative elements.
Broad scope: all sectors, raw materials and finished goods alike, including online sales into the EU.
Enforcement: the Commission leads where the suspected forced labour is outside the EU; national authorities handle cases within it. State-imposed forced labour is an explicit enforcement priority.
What this means in practice
Map the supply chain. Risk is assessed by geography, sector and product, so you need visibility beyond tier one and into the origin of raw materials.
Run forced labour due diligence. The Commission endorses the OECD six-step framework, with measures proportionate to your size and risk exposure. Paper exercises will not survive contact with an investigation.
Be able to produce evidence. Investigators may rely on indirect and circumstantial sources, including satellite imagery and isotopic analysis — and a failure to cooperate can itself count against you.
Prepare for remediation. Corrective action plans, remedy for those affected, and responsible disengagement where a risk cannot be addressed.
Get the contracts right. Contract clauses and purchasing practices decide whether a supplier can realistically meet what you ask of them.
How an investigation unfolds
The process begins with a preliminary phase. The lead competent authority requests information from the company, which has 30 working days to respond. In practice this is where the matter is decided: a company can show that the suspicion does not concern its products, or that it has already begun corrective action, and the authority may then decline to open an investigation or allow a reasonable period to put things right.
If the suspicion stands, a formal investigation follows. Evidence can include worker testimony, grievance records, payroll and production data, customs and trade data, laboratory testing and geolocation. A social audit report is one source among many — not proof.
A ban decision is product-specific and applies across the EU. It requires the product to be withdrawn from the market and disposed of, and online listings to be taken down. The financial penalty does not follow the forced labour itself; it follows failure to comply with the decision.
Getting back on the market means remediating
A ban decision does not lapse with time. It is lifted only when the company shows that the forced labour has been eliminated — and that those harmed have been made whole. In the Commission’s guidelines, remediation means restoring people to the position they would have been in had the forced labour not occurred: restitution, financial compensation, rehabilitation and disciplinary measures.
This is the point that changes the arithmetic. Preparing costs a fraction of what lifting a ban costs — and lifting it may not be possible at all if the company has no access to the site where the problem sits.
Due diligence is not mandatory — which is precisely why it matters
The Regulation does not oblige a company to carry out due diligence. It prohibits an outcome: no product made with forced labour may be on the market. It is an obligation of result, not of means.
The consequence runs both ways. A faultless process is no defence — the product can still be banned. But due diligence is what determines whether a company becomes a target in the first place: authorities prioritise cases by the scale and severity of the suspected forced labour, how close the company sits to it, how much leverage it has, its size and resources, and how complex its supply chain is.
A company does not run due diligence to discharge an obligation. It runs it so that a problem does not first surface through a regulator.
Why act now?
The financial penalty only follows a ban decision that has been ignored, but the commercial damage arrives much earlier. A product caught by the prohibition has to be withdrawn from the market and disposed of, and a blocked shipment costs money long before any fine is calculated.
The Regulation does not stand alone. It sits alongside the CSDDD and the CSRD, and the due diligence you build for one serves the others. Three years sounds generous until you start mapping a supply chain you do not yet have visibility over.
Where most companies start at the wrong end
- The questionnaire goes out before anyone knows what it is looking for.
A supplier questionnaire produces answers, not information. Without identifying the risk points first, it mostly confirms that everything is fine. - Audit is treated as assurance.
Forced labour is precisely the practice an announced audit is worst at finding. In the Commission’s guidelines an audit report is one source among many. - Only tier one is examined.
The risk almost always sits deeper — in a raw material, a sub-supplier’s sub-supplier, or labour recruitment. The counterparty you contract with is rarely the place the problem is. - Smaller companies assume they are out of scope.
There is no size threshold. Size and resources shape what can reasonably be expected of a company — not whether the prohibition applies to it.
Frequently asked questions
Does the Regulation apply to SMEs?
Yes. There is no size threshold. A company’s size and resources affect what measures can reasonably be expected of it and how authorities prioritise cases, but the prohibition itself is the same for everyone.
How does this differ from the CSDDD?
The CSDDD imposes a process obligation and applies only to very large companies. The Forced Labour Regulation prohibits an outcome and applies to everyone. The same groundwork serves both, but the obligations are different in kind. More on sustainability due diligence
Is a supplier’s warranty that it does not use forced labour enough?
No. A warranty speaks to what was true at signature and carries little weight in an investigation. What matters is what the company actually knows about its chain and how it came to know it. More on contract clauses
What about products manufactured before 14 December 2027?
What matters is when the product is placed on the market or exported from the EU — not when it was made. There is no grandfathering, and stock already in a warehouse is covered.
How do we know whether we are in a risk area?
The Commission is compiling a database of forced labour risk areas and products, but it is still under development. For now the assessment has to come from your own chain: where the raw material originates, who recruits the labour, and what is actually known about it. More on purchasing practices
How Nexus Legal helps you prepare:
Embedding due diligence in the business: supply chain risk assessments and mapping
Responsible contract clauses and purchasing policies
Training and practical guidance for management and procurement teams
The companies that cope best in December 2027 will be the ones that started mapping in 2026. Get in touch and we will look at where your supply chain actually stands — see our references for the kind of work this involves.