On September 14, 2022, the European Commission released the proposal for a Regulation on prohibiting products made with forced labour on the Union market. The initiative was first announced last year by President von der Leyen in her State of the Union speech on September 15, 2021. This Regulation does not target a specific sector or region.
General prohibition
Under Article 3 of the Regulation, placing and making available on the Union market or exporting from the Union market products made with forced labour is prohibited. Such prohibition applies to products for which forced labour has been used in whole or in part at any stage of their extraction, harvest, production or manufacture, including working or processing related to a product at any stage of its supply chain (Article 2).
Investigation
Under the Regulation, competent authorities are vested with investigation power.
The preliminary phase investigation is based on a risk-based approach to assess likelihood of violation of Article 3. The assessment is based on relevant information including information submitted by any natural or legal person or association not having legal personality. Further, authorities must focus on enterprises involved in the steps of the value chain as close as possible to where the risk of forced labour is likely to occur and take into account the size and economic resources of the enterprise, the quantity of products and the scale of suspected forced labour. Enterprises must provide information on actions taken to identify, prevent, mitigate or stop the risks of forced labour in their operations and value chains (Article 4).
Would the authorities find there is a substantiated concern of violation of Article 3, they will initiate an investigation on the products and enterprises concerned (Article 5). To adapt to specificities of small and medium enterprises, when deciding on the time limits for submission of information the competent authorities will consider the size and resources of the enterprise concerned (Article 5).
If violation of Article 3 is established, authorities will adopt a decision containing (a) a prohibition to place or make the products concerned available on the Union market and to export them; (b) an order for the enterprises that have been subject to the investigation to withdraw from the Union market the relevant products that have already been placed or made available on the market; (c) an order for the enterprises that have been subject to the investigation to dispose of the respective products (Article 6). Enterprises will have the possibility of requesting a review of that decision. Such request will have to contain new information that was not submitted during the investigation (Article 8).
Where no request for review has been introduced or the decision is definitive, authorities will communicate it to the customs authorities of Member States (Article 15).
Guidelines
The European Commission will issue within 18 months after the entry into force of the Regulation among others, guidance on due diligence in relation to forced labour and information on risk indicators of forced labour (Article 23).
Next steps
The proposal will be discussed and agreed by the European Parliament and the Council of the European Union. The Regulation will apply 24 months after its entry into force.