Mandatory due diligence on environmental and human rights violations in the supply chain is on the threshold of expansion in Europe. The EU Forced Labour Regulation (EUFLR) will ban products involving forced labor by the end of 2027. Companies that do not comply risk having their products banned or withdrawn from the European Union market.

The EUFLR operates similarly to the EU Deforestation Regulation (EUDR)—banning products from the EU that contribute to deforestation—which will kick in by the end of 2026. The last major piece of due diligence legislation coming up is the Corporate Sustainability Due Diligence Directive (CSDDD), a broad framework that will go into effect mid-July 2029.

However, the EUFLR, like the EUDR, will have a far more immediate impact. The EUFLR is a targeted regulation, and every company, large and small, that wants to place products on the European market will feel its weight. The CSDDD, on the other hand, only applies to companies with >5,000 employees and >€1.5 billion in turnover (for more on CSDDD and EUDR, read our recent policy alert).

Now that we’re firmly into 2026, companies must start assessing the far-reaching implications of the EUFLR and how its restrictions on forced labor will affect their products' access to the EU market.

What do companies need to know about EUFLR?

From December 2027, EUFLR will prohibit any company, regardless of size, sector, or location, from placing any goods made with forced labor on the EU market, regardless of their origin. Although that might still seem some time away, ensuring your human rights due diligence approach is robust enough to withstand scrutiny and that you have sufficient knowledge of your supply chain takes time, so preparation is key.

As set out in the Regulation, any product for which forced labor has been used at any stage of production, manufacture, harvest, or extraction (including in the working or processing relating to those products and in any component parts) cannot be sold, imported, or exported via the EU market. And, as the most recent data published by the Walk Free Foundation in the Global Slavery Index suggests, the value of goods at risk of modern slavery imported to countries within the EU is significant - $44bn (USD) into Germany alone, as an example.

The definition of forced labor applied is in line with ILO Convention 29: specifically, ‘all work or service which is exacted from any person under the menace of any penalty and for which the person has not offered themselves voluntarily’. This includes forced child labor and situations where persons are coerced to work through violence, intimidation, manipulated debt, or retention of identity papers.

How will suspected violations of the ban be identified?

The relevant competent authority in each member state will take a risk-based approach when assessing the likelihood of a violation of the ban. This will be based on information including:

  • Defined risk indicators (to be provided in guidance due to be published by the EU Commission in June 2026).
  • Information held within a database to be established by the Commission (due June 2026)
  • Information provided to the Commission through a single information submission point.

Products will be prioritized for investigation based on criteria including the scale and severity of the suspected forced labor, the quantity or volume of products placed or made available on the Union market, and the share of the product suspected to have been made with forced labor.

What happens when a violation of a ban is suspected?

In the first instance, the company under assessment (together with other product suppliers, where relevant) will be asked to provide information on the relevant actions they have taken to identify, prevent, mitigate, bring to an end, or remediate risks of forced labor in their operations and supply chains with respect to the products under assessment.

This information will be used to help determine whether there is a substantiated concern and a full investigation is required. A refusal or inability to provide this information may, in itself, be sufficient for the competent authority to establish a violation of the ban. An appropriate human rights due diligence approach is therefore critical.

Based on this preliminary assessment, if the competent authority determines a substantiated concern that a violation of the ban has occurred, a full investigation will be launched. If forced labor is confirmed, action taken could include one or more of the following: a notice to withdraw products, a prohibition on exporting them or placing them on the Union market, or an order for disposal of the product/part of the product under investigation.

What should companies do now?

At the heart of a company’s preparation for the Regulation should be a robust due diligence framework to identify, prevent, mitigate, bring to an end, or remediate risks of forced labor – including within its own operations and the supply chain.

Although formal guidance on due diligence is due to be published by the Commission in June, the Commission and the European External Action Service (EEAS) have previously published due diligence guidance to help EU companies address the risk of forced labor in their operations and supply chains. A due diligence framework that is in line with this, combined with international frameworks such as OECD Due Diligence Guidance for Responsible Business Conduct and the UN Guiding Principles on Business and Human Rights (UNGPs), whilst taking into consideration ILO Indicators of Forced Labour (updated November 2025), will help ensure a strong starting point.

Companies can start by asking a few simple questions:

  • Have we undertaken a risk assessment to identify where our risks of forced labor are most likely and most severe?
  • Have we implemented policies and procedures that are designed to address the risk of forced labor?
  • How much do we know about our supply chain?
  • Have we developed appropriate procedures that are specific to where our risks are greatest?
  • Do we have a grievance and remediation mechanism in place that is aligned with the UN Guiding Principles on Business and Human Rights?
  • Do we review the effectiveness of our measures and review lessons learned to improve our processes?

A review of existing measures designed to support compliance with other regulations (at both national and EU level) may identify areas of commonality, with approaches in place that can be further built upon to address the specific risk of forced labor.

What happens next?

In the coming months, the Commission is expected to establish a database of forced labor risks and issue guidelines on due diligence, forced labor risk indicators, and best-practice guidelines for bringing to an end and remediating forced labor. Support tools to be developed will include guidance designed specifically for SMEs.

It is safe to assume that guidance will closely align with established frameworks and standards, including the UNGPs and OECD Due Diligence Guidelines, and companies already working to develop and implement policies and procedures aligned with these should be well placed to respond to the Regulation.