A new EU trade instrument to ban products made by forced labour: what do we know so far? – International trade and investment


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Forced labor is explicitly prohibited by the Charter of Fundamental Rights of the European Union. The International Labor Organization defines forced labor as “all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily”. With the US Uyghur Forced Labor Prevention Act coming into force on June 21, members of the European Parliament and NGOs have called on the EU to introduce specific legislation to combat forced labor, which is now expected after the Summer holidays.

Background

In September 2021, the President of the European Commission, Ursula Von der Leyen, announced in the European Parliament a new initiative to ban products made by forced labour. Since then, the Commission has presented several legislative and non-legislative initiatives indirectly touching on this issue, such as the Communication on Decent Work in the World, the proposal for a Directive on corporate sustainability due diligence and the Communication ” The Power of Business Partnerships: Together for Green and Just Economic Growth”.

In April 2022, the International Trade Committee of the European Parliament had an exchange of views with the Commission regarding the future legislative instrument to effectively ban products produced or harvested by forced labour. In June, the plenary session of the European Parliament adopted a motion for a resolution calling for “a new WTO-compatible trade instrument to complement corporate sustainability due diligence rules, prohibiting the import and export of products produced or transported by forced labor and which should be complemented by measures for the intra-EU trade“, among other requests.

In addition, the joint statement made on May 16, 2022 at the Ministerial Meeting of the EU-US Council on Trade and Technology, which serves as a forum for the United States and the European Union to coordinate approaches to major global trade, economic and technological issues, includes several references to the eradication of forced labor and child labour.

Finally, on May 23, 2022, the Commission launched a call for contributions for the initiative “Effectively ban products made, extracted or harvested with forced labour”, which was open for comments until June 20, 2022.

Overview of instrument design and application

The Commission underlined that the fight against forced labor in the global value chain is an EU priority which requires a multi-level approach. According to Dubravka `uica, Commissioner for Democracy and Demography, the initiative aims to effectively ban the placing on the EU market of products made in whole or in part by forced labour.

The main lessons drawn from Commissioner `uica’s remarks to the European Parliament on 9 June 2022 are:

  • The objective of the legislative proposal is to effectively ban the placing on the EU market of products produced by forced labour, and this marketing ban would cover both domestic and imported products;

  • Commission Executive Vice-President Dombrovskis and Internal Market Commissioner Thierry Breton are co-leads this dossier, with all the relevant Commission services and the External Action Service closely associated;

  • The instruments would have a risk-based enforcement system, based on international standards and complementing existing EU horizontal and sectoral initiatives, in particular due diligence and transparency obligations;

  • The measure would introduce a ban on placing products made with forced labor on the EU market;

  • The relevant legal basis could be Article 114 of the Treaty on the Functioning of the European Union (“Treaty“), possibly combined with Article 207 of the Treaty if deemed relevant;

  • The legislative proposal should respond to the recommendations of the future of Europe to fight against child labour;

  • It should recognize the role of due diligence in identifying, preventing, mitigating and accounting for the use of forced labor in value chains while being consistent with the due diligence obligations established in existing initiatives ;

  • The proposal should take into account the specific situation of small and medium-sized enterprises (SMEs), both in its design and in its implementation;

  • It should avoid imposing unnecessary additional administrative burdens on businesses and enforcement authorities, and the EU should provide tools to help them in their implementation.

Next steps:

According to a provisional agenda from the European Commission, a legislative initiative for a “ban on the products of forced labour” could be presented on September 13, 2022. This date, subject to change, coincides with the plenary session of the European Parliament from September to Strasbourg.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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