Forced Labour: What’s Happening in the US, EU, New Zealand and Beyond
This blog was originally posted on 19th May, 2026. Further regulatory developments may have occurred after publication. To keep up-to-date with the latest compliance news, sign up to our newsletter.
AUTHORED BY CRISTIAN BARROSO, REGULATORY COMPLIANCE SPECIALIST AND NEDAA YOUSEF, REGULATORY COMPLIANCE ANALYST, COMPLIANCE & RISKS
Key Insight
Recent global developments show a clear tightening of laws and enforcement measures aimed at eliminating forced labour from supply chains. Governments across the EU, U.S., Asia, and Latin America are introducing new import bans, disclosure requirements, and enforcement systems. While approaches differ, they all share a common focus on increasing transparency and holding businesses accountable for forced labour risks.
Introduction
The past months have seen significant legislative and policy developments in the global fight against forced labour across several major jurisdictions. These include the U.S. Sec 301 investigations,, the implementation of the EU Forced Labour Regulation, new import bans recently introduced by El Salvador, Pakistan and Indonesia on products made with forced labour, as well as recent developments with New Zealand’s Modern Slavery Bill, among others. Therefore, this blog provides an overview of such policy and legislative developments.
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EU Consultation on Forced Labour Guidelines, ICSMS Implementing Act and Finland’s Draft Law on Enforcement and Sanctions
The EU Forced Labour Regulation (EU) 2024/3015 (EUFLR) will prohibit any company, regardless of size, sector, or location, from placing on the EU market any goods produced using forced labour, regardless of where they are produced. Although the Regulation will apply from December 2027, preparatory work is already underway, with the EU currently developing the necessary implementing acts and guidance.
Forced Labour Implementing Guidelines
In February 2026, the European Commission launched a public consultation on the forthcoming Forced Labour Implementation Guidelines, expected to be published on 14 June 2026. Businesses, governments, NGOs, academic institutions, trade unions, and other relevant stakeholders were invited to submit feedback by 6 March 2026.
The Guidelines are planned to be structured into three main categories:
- Economic Operators – focusing on due diligence in relation to forced labour risks.
- Competent Authorities – covering risk-based assessments and the application of financial penalties.
- Civil Society Organisations and other stakeholders – providing guidance on submitting information related to products suspected of being produced using forced labour.
What to Expect?
It is important to note that the EU Forced Labour Regulation does not impose a direct obligation to conduct due diligence. However, prevention and mitigation of forced labour risks are indirectly encouraged for compliance and enforcement purposes, in line with international standards and principles established by organisations such as the International Labour Organisation, Organisation for Economic Co-operation and Development (OECD), and the United Nations (UN).
Similarly, the Guidelines are expected to take into account the size and economic resources of economic operators, and to address several key operational questions implied by the Regulation, including:
- What types of documentation should be provided to, or made available for, competent authorities by economic operators?
- How should businesses engage in dialogue with competent authorities?
- What are the best practices for conducting forced labour due diligence and for remediating forced labour risks?
To this end, the guidance should be based on the OECD and UN due diligence frameworks, and clarify which supporting documentation may be required across the following areas:
- Embedding due diligence policies.
- Identifying and assessing risks.
- Addressing risks.
- Tracking implementation and outcomes.
- Communicating results.
- Providing remediation where appropriate.
ICSMS Forced Labour Module Regulation
On 27 April 2026, the European Commission published Regulation (EU) 2026/903, the first implementing act under the EU Forced Labour Regulation. The Regulation outlines the details and functionalities of the Forced Labour Information and Communication System (ICSMS Forced Labour Module).
As provided in Article 7 of the EU Forced Labour Regulation, the system is designed to facilitate the systematic exchange of information and cooperation among competent authorities, customs authorities, and the European Union Commission. Its primary focus is to support investigations, decision-making processes, and the enforcement of the prohibition on products made using forced labour. In particular, the system will include information relating to:
- Competent authorities details;
- Information submitted through the Single Information Submission Point;
- Information on the initiation, non-initiation, or closure of investigations;
- Decisions concerning products made with forced labour;
- Communication about the withdrawal or modification of decisions following reviews, including the outcomes of judicial appeals;
- Customs authorities’ control decisions regarding products made with forced labour
- Risk-based assessments; and
- The identification of products for which specific information must be provided to customs authorities
While the implementing regulation is primarily operational and directed at public authorities, it represents an important step in operationalising the European Union’s framework for combating forced labour in supply chains.
Finland Draft Law on Enforcement and Sanctions under the EU Forced Labour Regulation
On 7 May 2026, the Finnish Ministry of Employment and the Economy published a draft law establishing the enforcement mechanisms and sanctions necessary to implement the prohibition on products made with forced labour under the EU Forced Labour Regulation.
Under the draft law, the Licensing and Supervision Authority would be designated as the competent authority in Finland responsible for conducting investigations and monitoring compliance with the EU Forced Labour Regulation. Economic operators subject to inspection would be required to provide all information, explanations, documents, recordings and other materials necessary for the inspection, as well as any assistance required by the inspecting authority.
The draft law further provides that the Licensing and Supervision Authority may impose administrative penalties on economic operators for non-compliance of up to 3 per cent of the operator’s worldwide turnover.
The consultation period for the Draft Law remains open until 18 June 2026. The Legislation is proposed to enter into force on 14 December 2027, coinciding with the date on which the Forced Labour Regulation will apply.
U.S. USTR Sec. 301 Forced Labour Investigations
Background
On 12 March 2026, the United States Trade Representative (USTR) initiated new investigations under Section 301 of the Trade Act of 1974 to assess the policies and enforcement practices of 60 economies regarding import bans on goods produced with forced labour.
The investigations encompass key U.S. trading partners, including the United Kingdom, the European Union, Canada, Australia, China, Japan, South Korea, Mexico and Brazil, among others.
The scope of the investigations includes concerns about the failure to adopt and effectively enforce prohibitions on the importation of goods made with forced labour. Therefore, the USTR will assess whether the relevant foreign government practices are “unreasonable” or “discriminatory” and whether they burden or restrict U.S. commerce. The findings may inform potential responsive measures, including possible import restrictions and tariffs on products originating from the economies under investigation.
Investigations Timeline
- March 2026 – The investigation formally commenced with the publication of the notice in the Federal Register and the opening of the public comment period for stakeholder submissions and feedback.
- April 2026 – The public consultation period concluded, and public hearings were conducted to gather additional input from interested parties.
- May 2026 – A post-hearing comment period remained open until 7 May 2026, during which parties were permitted to submit written rebuttal comments.
What’s Next?
Following the post-hearing consultation process, the USTR is expected to issue its determinations, which may include dismissing the matter, narrowing the list of investigated economies, or proposing remedial measures such as tariffs and product-specific restrictions, potentially accompanied by additional opportunities for public comment.
Unfortunately, there is still no official date for the issuance of the determinations; however, various online reports suggest that they are expected around Q3 of 2026.
U.S. Uyghur Forced Labour Disclosure Bill
Amid the ongoing USTR Section 301 investigations, a newly introduced U.S. bill would require increased transparency of forced labour in supply chains.
The Uyghur Forced Labour Disclosure Bill proposes amendments to the Securities Exchange Act of 1934 requiring issuers to make specific disclosures and certifications concerning supply chain activities linked to the Xinjiang Uyghur Autonomous Region (XUAR).
The bill applies to all issuers required to file annual reports or registration statements under the Securities Exchange Act.
Under the proposed framework, issuers would be required to disclose whether they source goods, including raw materials, from entities identified on the Uyghur Forced Labor Prevention Act (UFLPA) Entity List as participating in forced labour activities in the XUAR.
In particular, with respect to products designated as high-priority sectors for enforcement, issuers would be required to provide documentation verified by an independent third-party auditor. Such documentation would need to demonstrate that the relevant goods were not produced, wholly or in part, in the XUAR, nor by entities included on the UFLPA Entity List.
The bill would also require issuers to disclose any commercial relationships or interactions with entities sanctioned in connection with human rights abuses in the XUAR.
Import Control Measures on Products Made with Forced Labour by El Salvador, Indonesia and Pakistan
El Salvador
On 3 March 2026, El Salvador published Decree No. 524 to introduce customs control measures against the importation of goods produced using forced, compulsory or child labour.
Under the decree, importers of goods into El Salvador will be required to submit a written sworn declaration confirming that the imported goods are not manufactured, produced, assembled, transformed, distributed or otherwise processed, in whole or in part, using forced, compulsory or child labour.
In addition, the Directorate General of Customs may request supplementary information and supporting documentation to demonstrate that the goods and their entire supply chain comply with applicable laws prohibiting forced and child labour.
Submitting a false declaration or failing to provide the required documentation may expose importers to administrative, civil, or criminal liability. Such non-compliance may also result in the provisional suspension of the import process, the preventive detention of goods, or the denial of entry into the country.
The Directorate General of Customs, together with the Ministry of Labour and Social Security, is expected to issue implementing guidelines governing coordination mechanisms, information sharing, and the practical application of these requirements. These guidelines will be critical in clarifying how importers are expected to comply in practice.
Pakistan
On 28 April 2026, the Pakistani Ministry of Commerce released Order S.R.O. 704(I)/2026 to address forced labour concerns. The Order prohibits the import of any goods produced, manufactured, or mined, partially or entirely, via forced labour.
Moreover, it grants the government authority to designate specific countries, entities, or categories of goods as prohibited from importation based on determinations made by the International Labour Organisation (ILO). Consequently, importers sourcing from these flagged areas or entities may be required to provide proof or certification that their products are not linked to forced labour.
These measures strengthen Pakistan’s import control framework and align national due diligence expectations more closely with emerging international standards on forced labour compliance.
Indonesia
Following a Section 301 investigation by the Office of the U.S. Trade Representative into its labour practices, Indonesia has introduced new measures to eradicate forced labour from its production systems.
Regulation No. 9/2026, which came into effect on 15 April 2026, prohibits the import of goods made with forced labour, adopting an approach consistent with international benchmarks.
Significantly, the Ministry of Trade is now authorised to conduct verifications, either independently or upon request from private entities, to identify products manufactured under forced labour conditions and may impose import bans where such practices are confirmed.
The United Arab Emirates Ratified the ILO Convention on Forced Labour
On 15 January 2026, the United Arab Emirates (UAE) solidified its commitment to labour rights by formally ratifying the International Labour Organisation (ILO) Protocol of 2014 to the Forced Labour Convention No. 29. As the second Gulf Cooperation Council member state to ratify the Protocol, the UAE has undertaken enhanced obligations aimed at preventing human trafficking, debt bondage, and forced domestic labour.
The ratification strengthens preventive and enforcement measures, which will become binding on the UAE one year following the official deposit of the ratification instrument with the ILO.
New Zealand’s Parliament Opens Consultation on its Modern Slavery Bill
The Education and Workforce Committee of the New Zealand Parliament is calling for submissions on the Modern Slavery Bill, with a closing date of 28 May 2026.
The Bill, currently passed its first reading in Parliament, would establish mandatory reporting obligations for entities with consolidated annual revenue exceeding NZ$100 million. Companies in scope would be required to prepare, publish, and register a Modern Slavery Statement addressing key aspects of their operations and supply chains:
In particular, the statement would need to include a description of identified modern slavery risks, as well as the measures implemented to prevent, address and mitigate those risks. It would also require disclosure on how the effectiveness of these measures is monitored and assessed, as well as the training provided to personnel and whether stakeholder consultations were undertaken.
Non-compliance with the reporting requirements may result in penalties of up to NZ$200,000. In addition, the courts would have the authority to impose civil penalties of up to NZ$600,000.
Conclusion
Taken together, these developments highlight a significant trend in efforts to tackle forced labour in global supply chains. While requirements differ across jurisdictions, their shared goal is to prevent forced labour in the manufacture of products, increase transparency, and encourage responsible business to address forced labour risks.
These legislative and policy measures suggest that businesses will face increasing pressure to implement robust due diligence processes to ensure their products and supply chains are free of forced labour. As these investigations, drafts and consultations progress, the landscape for ethical supply chains will continue to remain dynamic, making this a critical area for companies to monitor in the coming months.
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