On September 15, 2021, in the European Commission’s ("Commission") annual "State of the Union" ("SOTEU"),1 Commission President Ursula von der Leyen announced the Commission’s intent to propose a ban on products made using forced labor. In practical terms, this means that the Commission will begin drafting a legislative proposal aimed at preventing products that have been made using forced labor from being placed on the EU market.
In her SOTEU speech, the Commission president further noted that "doing business around the world [...] can never be done at the expense of people’s dignity and freedom" and that the European Union (“EU”) "can never accept that [25 million globally] are forced to make products – and that these products then end up for sale in shops here in Europe."
Earlier, on July 12, 2021, the Commission published guidance on due diligence for EU businesses to address the risk of forced labor in their operations and supply chains (see the Mayer Brown Legal Update). Whereas the Guidance did not, as such, create any new legal obligations, the announcement of a formal legislative proposal signals that the Commission will be taking additional steps to prevent products made using forced labor from entering the EU market.
The announcement also follows persistent calls by the European Parliament for a legislative proposal on an effective traceability mechanism for goods produced through forced and child labor, which it notes "could pave the way for a complete ban on the importation into the EU of goods produced through modern forms of slavery or forced labour, especially forced work of vulnerable groups extorted in violation of basic human rights standards."2
The legislative proposal for a ban on the placing on the market of products made using forced labor is expected to be part of the Commission’s Work Programme for 2022, which means that it could see the light of day next year. Thereafter it will likely be subject to an ordinary legislative procedure, meaning that the EU member states will have a say in the final form and content of the new legal instrument.
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With its worldwide presence, Mayer Brown stands ready to help non-EU companies understand EU obligations relating to forced labor requirements (including due diligence requirements), increasing their appeal to EU companies as business partners and avoiding any risk of disengagement from current EU business relationships.
1 See European Commission, State of the Union Address 2021 by Ursula von der Leyen, https://ec.europa.eu/info/sites/default/files/soteu_2021_address_en_0.pdf.
2 See European Parliament, Legislative Train Schedule – Ban on Import of Goods Produced Using Modern Forms of Slavery and Forced Labour, Including That of Children, https://www.europarl.europa.eu/legislative-train/theme-europe-as-a-stronger-global-actor/file-ban-on-import-of-goods-produced-using-modern-forms-of-slavery.