Navigating the EU Forced Labour Regulation: What the new guidelines mean for companies

The European Commission has published long-awaited Guidelines on the EU Forced Labour Regulation, providing businesses with a clearer picture of how authorities will assess compliance when the Regulation comes into force on 14 December 2027. The Guidelines offer important insight into the due diligence, documentation and remediation measures organisations will be expected to have in place to prevent forced labour within their operations and supply chains.

The Regulation introduces a sweeping ban on products made wholly or partly with forced labour, including child labour, from being placed on, imported into or exported from the EU market. Its reach is extensive, applying to businesses of all sizes and sectors involved in manufacturing, importing, exporting, distributing or selling products connected to the EU. Products found to be linked to forced labour may be withdrawn from the market, seized or destroyed, while businesses that fail to comply with enforcement decisions could face financial penalties.

A key message from the Commission’s new Guidelines is that robust, documented due diligence will be critical. While the Regulation does not prescribe specific due diligence obligations, authorities are expected to closely scrutinise the steps businesses have taken to identify, prevent and address forced labour risks. In the event of a complaint or credible report, businesses may have as little as 30 to 60 days to provide evidence of their compliance frameworks, policies and actions. Authorities may request corporate policies, supplier codes of conduct, training records, audit reports, grievance procedures and evidence of corrective measures.

The Guidelines are built around the OECD’s six-step due diligence framework. Businesses are encouraged to integrate forced labour considerations into governance and risk management systems, map and assess risks across their supply chains, implement mitigation measures, monitor effectiveness, report on actions taken, and establish remediation processes where issues are identified. Importantly, due diligence is expected to be ongoing rather than a one-off exercise.

The Commission also places significant emphasis on stakeholder engagement and grievance mechanisms. Businesses should ensure workers, communities, trade unions and other stakeholders have accessible channels through which concerns can be raised safely and without fear of retaliation. Effective grievance procedures, supported by adequate resources and oversight, are likely to become an important feature of compliance programmes.

Where forced labour is identified, remediation is expected to go beyond simply terminating supplier relationships. The Guidelines encourage businesses to take meaningful action to address harm, including repaying withheld wages, returning confiscated identity documents, compensating affected workers and improving working conditions. In many cases, working with suppliers to improve standards may be more effective than disengagement, which the Commission views as a last resort.

Although the Regulation does not apply until December 2027, businesses should use the lead-in period to assess supply chain risks, strengthen governance structures, update supplier contracts, enhance due diligence processes and establish clear remediation procedures. Given the complexity of modern supply chains, organisations that begin preparations now will be better positioned to withstand regulatory scrutiny and avoid potentially significant commercial, operational and reputational consequences.

In short, the Guidelines make clear that businesses can no longer rely on high-level commitments alone. Demonstrable, risk-based action and comprehensive record-keeping will be essential to showing compliance with the EU’s new forced labour regime.

FIND OUT MORE

Join our live webinars which are taking place on 22 July: 

09:30 (BST) – International perspective

This session will explore the key practical takeaways for multinational businesses. We will examine the Commission’s expectations around risk management systems, integrated due diligence, stakeholder engagement, grievance mechanisms, and remediation, as well as the new guidance on investigations and extensive information requests which businesses will have to answer. The session will also consider how the Guidelines interact with other international human rights and supply chain due diligence frameworks, helping businesses prepare for enforcement from December 2027.

 16:00 (BST) – US perspective

This session will consider the new EU Guidelines through a US lens. We will discuss what the Commission’s guidance on risk-based investigations, supply chain due diligence and evidencing remediation means for companies already navigating US customs enforcement, and identify opportunities to align compliance programmes across both jurisdictions.

To register, please click here.