The EU Is Making Forced Labor a Trade Compliance Problem, Not Just an ESG Issue

AGG International Trade attorneys Allison Raley and Nikita Kulkarni co-authored an article for Corporate Compliance Insights discussing why the EU’s new forced labor regulation (“FLR”) demands a level of supply chain visibility that many compliance programs do not yet have.  

“Beginning Dec. 14, 2027, authorities will be able to pull products from the EU market, block imports and exports, and order disposal or remediation where they find forced labor anywhere in a product’s supply chain,” Allison and Nikita highlighted.  

It is important for companies to note that investigations start with a preliminary phase. The lead competent authority will assess available information and may request data from the economic operator within 30 working days. If concerns are not resolved, companies will proceed to a full investigation phase.  

Allison and Nikita identified key elements of credible preparation, including governance and ownership, risk assessment and scoping, third-party and supply-chain controls, as well as documentation and metrics. 

“To avoid scrambling under that kind of pressure, companies can develop an FLR-specific investigations-and-escalation protocol that builds on existing frameworks for anticorruption, sanctions, or human rights issues,” suggested Allison and Nikita. 

They also outline the vital elements of an investigation-ready compliance protocol, along with a six-step action plan that companies can begin executing over the next 12 to 18 months, ahead of the enforcement date. 

To view the full article, please click here.