A proposed regulation that would prohibit products made with forced labor in the European Union market took a step forward this week with its approval by two committees of the European Parliament.
The proposed regulation, first unveiled by the European Commission in September 2022, would cover all products, including imports as well as goods made in the EU for domestic consumption and export. It provides that if a product is determined to be made with forced labor, authorities would be required to (1) immediately prohibit the placing and making available of that product on the EU market and its export from the EU, (2) require the economic operators to withdraw such product already made available from the EU market, and (3) have such product destroyed, rendered inoperable, or otherwise disposed of in line with national law.
On Oct. 16 the European Parliament’s Internal Market and International Trade committees amended this proposal to task the European Commission with creating a list of geographical areas and economic sectors at high risk of using forced labor. For goods produced in these high-risk areas the burden of proof would fall on companies (to prove no forced labor was used) rather than on government authorities (to prove that it was).
Another amendment would specify that goods removed from the EU market under this regulation would only be allowed back in after the company demonstrates that it has stopped using forced labor in its operations or supply chain and remedied any relevant cases.
A press release states that once the amended regulation is confirmed as the European Parliament’s negotiating mandate, and the European Council adopts its position, “talks can start over the final shape of the regulation.”
Sandler, Travis & Rosenberg offers a comprehensive suite of services to help companies address forced labor concerns around the world, including supply chain reviews, due diligence strategies, and proactive remediation. ST&R also maintains a frequently updated web page offering a broad range of information on forced labor-related efforts in the U.S. and around the world. For more information, please contact ST&R at supplychainvisibility@strtrade.com.
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