Updated: January 2025
Forced labor is a growing global issue, affecting 27.6 million people in 2021, particularly marginalized groups like women, children, minorities, and migrants. Shockingly, 86% of forced labor occurs in the private sector, spanning industries like services, manufacturing, agriculture, and construction. The EU Forced Labor Regulation (EUFLR), effective December 2024, aims to combat this by banning the import, sale, and export of products made with forced labor.
This blog explains what the EUFLR is and what companies need to do and when in order to comply with the EUFLR, and how WF can enable your company’s due diligence regarding forced labor.
According to international definitions, forced labor is: “All work or service which is exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily."
What is the EU Forced Labor regulation?
The EUFLR was adopted in the autumn 2024 and came into force on 13 December 2024. It is a regulation that puts into place an import and export ban on products made with forced labor, including products made with state-imposed forced labor and forced child labor.
The regulation applies to any product where forced labor is used at any stage of the supply chain, including production, manufacturing, harvesting, or processing - even down to individual components. However, transport services are exempt.
The EUFLR represents a critical step in combating forced labor, holding companies accountable, and ensuring ethical practices across global supply chains.
Who does the EUFLR apply to
The EUFLR applies to all companies - referred to as "economic operators" - regardless of their size, sector, or location, as long as they place products on the EU market or export products from the EU. This includes products offered for sale online or through distance sales, ensuring modern customer trends are addressed.
Recognizing the unique challenges faced by small and medium-sized enterprises (SMEs), the EU will provide tailored support and guidance to help these companies comply with the regulation.
What are the requirements in the EUFLR?
The EUFLR places obligations on the three actors: the EU Commission, national authorities as well as companies.
What does companies have to do?
1. Conduct Due Diligence
Companies must implement processes to identify, mitigate, prevent, and eliminate forced labor risks in their supply chains. This involves:
- Aligning with international standards such as the UN Guiding Principles and OECD due diligence guidelines.
- Mapping all stages of production, from raw material extraction to final assembly.
2. Provide Remediation
If forced labor cases are identified, companies must take appropriate actions to address and resolve the issue including providing remediation to the individuals concerned.
What happens in case of non-compliance?
National authorities and the EU Commission will investigate suspected violations. Investigations follow these steps:
- Companies are first asked to demonstrate due diligence measures within 30 days.
- If inadequate, an in-depth investigation requires additional information within 2 months.
- Bans, withdrawals, or disposal of products.
- Fines and restricted market access.
Companies may appeal decisions by proving forced labor has been eliminated from their supply chains.
The EUFLR timeline: key dates to know
December 2024 – The regulation entered into force
Mid-2026 – The EU Commission will publish guidelines for implementation of EUFLR
Mid-2026 - The EU Commission will open up its forced labor risk database
How will the EU support companies to implement EUFLR?
To help companies comply with the EUFLR, the EU Commission will:
- Launch a forced labor risk database in mid-2026, highlighting high-risk regions and products.
- By mid-2026 EU will publish guidelines with risk indicators, best practices, and remediation advice tailored for SMEs.
How can businesses prepare for the EUFLR?
The key message is start now, don’t wait! Preparing for the EU Forced Labor Regulation (EUFLR) requires early action and a solid due diligence system to avoid penalties and protect your business. Here are our top tips to build a strong due diligence system:
- Study International guidelines: Begin with the UN Guiding Principles (UNGPs) and OECD Due Diligence Guidelines.
- Conduct a gap analysis: Identify missing elements in your current due diligence processes, specifically regarding forced labor
- Develop robust policies: Create clear policies covering forced labor and sustainability topics. Psst..we got a free human rights policy template for you.
- Map your supply chain: Focus on high-risk areas and key stakeholders in your operations and supply chain.
- Engage stakeholders: Collaborate with suppliers, unions, and local communities, and set up a complaints mechanism.
- Monitor and report: Track progress and include forced labor efforts in your sustainability reports.
Starting early ensures your business complies with the EUFLR and contributes to global efforts to end forced labor.
And, if you are already obliged to report according to CSRD, for example, you don’t need to create specific report on your forced labor due diligence efforts. Good, isn’t it?
Under the EUFLR companies don’t need to produce additional reports on top of the ones that the companies are already producing. What a relief, right?
But the results of the company’s due diligence efforts regarding forced labor should be included in the sustainability report that the company is publishing, whether it is under the Corporate Sustainability Reporting Directive, or not.
Track your forced labor risks with Worldfavor
The best part is, we can help you! How you might ask?
Well, with Worldfavor you can:
- Identify forced labor risks, engage with suppliers and monitor developments to live up to the EUFLR requirements.
- Identify forced labor risks with our Moderna Slavery risk index
- Screen your suppliers for forced labor risks and adverse impact by using our automated assessment called Forced Labor
- Screen your suppliers for forced labor risks and adverse impact by selecting from a large number or KPI:s in our sustainability library
Talk to a Worldfavor expert today to learn how our platform can help your business align with EUFLR.
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