There have been several recent developments in international efforts to combat trade in goods made with forced labor, with important implications for responsible sourcing and global trade compliance programs.

On September 14, 2022, the European Commission (“Commission”) published a proposal to ban products made with forced labor from the EU market. The proposal notably goes beyond banning the importation of such products and would also create a ban on the export of products produced with forced labor and require their withdrawal from the EU market.

Meanwhile, enforcement by U.S. Customs and Border Protection (“CBP”) of the U.S. forced labor import prohibition has continued to intensify, including under the Uyghur Forced Labor Prevention Act (“UFLPA”). In early August 2022, CBP clarified the process for updating the UFLPA Entity List. In addition, CBP recently announced that it intends to integrate forced labor compliance requirements into the Customs Trade Partnership Against Terrorism (“CTPAT”) “trusted trader” program.

We discuss these developments and their implications below.

EU Forced Labor Product Ban

The European Commission has proposed a Regulation prohibiting products made with forced labor from being imported to, exported from, or sold in the EU, following an announcement by Commission President Ursula von der Leyen during her State of the Union address in September 2021.

The Commission’s proposal is the first step in the EU’s formal legislative process. The Regulation will now have to be agreed by the European Parliament and Council to become law, following which there will be an agreed delay—the Commission has proposed two years—before it applies in EU Member States. As it usually takes at least 12 months, and often closer to 18 months, for the European Parliament and Council to agree on a legislative text after a proposal by the Commission is published, it is unlikely that the Regulation will be adopted before the end of 2023, and it is therefore unlikely to become applicable earlier than late 2025.

Notable features of the Commission’s proposal include the following:

  • The Regulation is broader in scope than U.S. forced labor trade restrictions. It would ban both the import and export of products made with forced labor, whether produced domestically or abroad. It would also require that such products be withdrawn from the EU market (though the draft Regulation clarifies that the withdrawal mechanism would not require a recall of products already in the hands of end users). This means that companies would be required to destroy products found to be produced with forced labor.
  • While the Regulation will apply directly in EU Member States, investigation and enforcement powers will rest with competent authorities designated by each Member State. The draft Regulation includes cooperation channels for such competent authorities as well as a mutual recognition mechanism: all Member States would be obligated to recognize and enforce a determination by the competent authority of any other Member State, at least with respect to products that share the same identification (e.g., description, name, or brand) and the same supply chain.
  • The Regulation sets forth various tools that would be available to competent authorities to identify products made with forced labor, including risk assessments and formal investigations. Throughout the process, targeted companies would be given the opportunity to demonstrate that they have due diligence processes in place to identify, prevent, and mitigate forced labor risks.
    • Risk assessments would rely on a variety of sources of information, including information provided by private parties (e.g., NGOs, civil society organizations, or employees, who can make submissions on a confidential basis), a contemplated database of forced labor risks (e.g., in relation to specific geographic areas or products), and a company’s compliance record and human rights due diligence processes.
    • Prior to initiating an investigation, the competent authority would be required to request from the company under assessment information on the actions they take to identify, prevent, mitigate, or bring to an end forced labor risks in their operations and value chains with respect to the products under assessment. Companies would be required to reply to such requests within 15 working days, and the competent authority would be required to take evidence of forced labor due diligence processes into account in reaching its decision.
    • If a competent authority concludes that a substantiated forced labor concern exists, the authority would be required to initiate a formal investigation. A company subject to an investigation would then have to submit extensive information, including information identifying the products under investigation, the manufacturer or producer of those products, and the product suppliers. Competent authorities would also be able to carry out their own inspections, including in non-EU countries provided the consent of the relevant company and country can be obtained.
  • In identifying target companies for assessments and investigations, competent authorities are instructed to prioritize companies involved in the steps of the value chain as close as possible to where the risk of forced labor is likely to occur and to take into account the size and economic resources of the company, the quantity of product concerned, and the scale of suspected forced labor.
  • Finally, the proposal would provide companies with a right to seek administrative review of adverse decisions and, ultimately, a right to judicial review by national courts.

The proposed Regulation builds on the supply chain due diligence rules the Commission proposed in February 2022 and has important parallels to the proposed supply chain due diligence requirements for deforestation-risk commodities and batteries. More broadly, forced labor is becoming a central concern of the EU’s trade policy. The Commission’s June 2022 Communication about its revised Trade and Sustainable Development (“TSD”) strategy makes clear that labor considerations will feature more prominently in the EU’s enforcement of existing trade agreements and negotiation of new ones. A further concrete indication of this trend is the Commission’s proposed addition of child and forced labor as a ground to revoke trade preferences for low- and middle-income countries under the EU’s Generalized Scheme of Preferences.

Together, these developments highlight the importance for companies with EU operations or supply chains to enhance their human rights due diligence programs to meet these new standards and requirements.

CTPAT Forced Labor Requirements

CBP has incorporated new forced labor elements into its CTPAT program, which will require CTPAT members to take concrete steps to combat forced labor and document their risk mitigation efforts.

CTPAT is a “trusted trader” program in which member companies that demonstrate compliance with certain requirements receive various trade facilitation benefits, which can be worth millions of dollars to large U.S. importers. The program enables CBP to direct enforcement resources to higher-risk importers. Originally, CTPAT was focused on combatting terrorism and promoting security. But in 2016, CTPAT launched its Trusted Trader Strategy, which aimed to incorporate trade compliance elements from the Importer Self-Assessment (“ISA”) program, a voluntary self-audit program that similarly afforded participants certain benefits. The effort to integrate ISA resulted in the March 2020 establishment of CTPAT Trade Compliance, as a complement to CTPAT Security.[1]

In the CTPAT Security program, CBP has made obligatory a previously optional requirement related to forced labor compliance. Specifically, Section 3.9 of the Importers Minimum Security Criteria currently provides that: “CTPAT Partners should have a documented social compliance program in place that, at a minimum, addresses how the company ensures goods imported into the United States were not mined, produced or manufactured, wholly or in part, with prohibited forms of labor, i.e., forced, imprisoned, indentured, or indentured child labor.” As of January 1, 2023, the “should” will become a “must.”[2] To demonstrate compliance, importers will be required to submit “evidence of implementing a social compliance program addressing the prevention of forced labor as well as a copy of the company’s Code of Conduct.”[3]

As for CTPAT Trade Compliance, as of August 1, 2022, CBP is requiring that all new applicants meet forced labor requirements. Existing members will have to meet the same requirements but will have one year to bring their supply chains into compliance. The CTPAT Trade Compliance forced labor requirements were announced by CBP in a webinar and are expected to be confirmed in forthcoming guidance, though the apparent delay in issuance suggests that changes could be possible. The requirements are expected to include the following:

  • risk-based mapping of supply chains;
  • a Code of Conduct including a prohibition of forced labor in the company’s supply chains, and related policies and procedures (this may require some participants to update their Codes of Conduct);
  • evidence of implementation of a social compliance program including program elements such as audits of high-risk supply chains, internal training programs, and other due diligence mechanisms showing that a supply chain is free of the use of forced labor;
  • training of suppliers on the requirements of the company’s social compliance program; and
  • remediation plans in the event that forced labor is identified in the company’s supply chains, including a process for disclosing the issues to CBP.

Consistent with the above, CBP released an updated CTPAT Trade Compliance Handbook in July 2022, which notes that the updated Trade Compliance Questionnaire asks importers to confirm that they have internal control procedures relating to forced labor risk.

Prospective and existing CTPAT member companies should reassess and consider strengthening their compliance posture to ensure that forced labor risk mitigation is adequately and expressly addressed. Given the potential challenges associated with mapping even a small number of supply chains in their entirety, importers should move soon to conduct forced labor risk assessments of their supply chains and consider how to engage with suppliers and deploy technology-based solutions, as appropriate.

Procedures for Revising UFLPA Entity List

On August 4, 2022, the Department of Homeland Security, as chair of the FLETF, published a notice in the Federal Register explaining the process for revising the UFLPA Entity List. The notice also re-published the Entity List previously posted on June 17, 2022, on the Department of Homeland Security website (see our prior alert discussing the scope of the Entity List).

Additions to the UFLPA Entity List will be decided through an inter-agency process, likely without opportunity for public comment. The notice explains that any FLETF member agency may recommend to the FLETF Chair (the Department of Homeland Security) that an entity be added to the Entity List, and decisions will be made by majority vote of the FLETF member agencies. The notice makes no mention of whether proposed additions will be published in the Federal Register, suggesting that the public will not have an opportunity to review and comment on additions before they are finalized.

Any listed entity may submit a removal request to the FLETF Chair. Removal requests must contain information showing that the entity no longer meets or does not meet the statutory criteria set forth in the UFLPA. As with additions to the list, decisions to remove an entity will be made by majority vote of the FLETF member agencies. Decisions are not appealable, but the FLETF will consider new removal requests containing “new information.”

The notice also makes clear that the UFLPA Entity List is not an “exhaustive list” of entities engaged in the practices set forth in the UFLPA as potential grounds for listing. In this regard, companies should monitor their supply chains for any activity described in the Act and continue to monitor and screen supplier lists against the Entity List.

*           *           *

Covington has specialized expertise and a global practice devoted to advising clients on Business and Human Rights, including in relation to forced labor-related risk mitigation strategies. In conjunction with our active Customs practice—which includes former CBP Commissioner Alan Bersin—and our experts in trade policy and trade controls, Covington is well positioned to advise companies on how to navigate interactions with CBP, assess supply chain risks and benchmark supply chain diligence programs, manage crisis communications and reputational and enforcement risk that may result from allegations of forced labor, assess the contractual and commercial impacts of WROs and the UFLPA, and evaluate potential disclosure obligations. These practices work closely with our Public Policy (U.S.) and China practices on these issues to provide comprehensive advice and intelligence.


[1] See CTPAT Trade Compliance Handbook (July 2022) at 5; CTPAT Trade Compliance FAQs.

[2] CTPAT Forced Labor Requirements, Frequently Asked Questions, at 2.

[3] Id.

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Photo of Alan Bersin Alan Bersin

Alan Bersin served between 2012 and 2017 as Assistant Secretary in the Office of Policy at the U.S. Department of Homeland Security (DHS). Alan was responsible for overseeing the Department’s policy formulation function in the areas of border security and trade, cyber, critical…

Alan Bersin served between 2012 and 2017 as Assistant Secretary in the Office of Policy at the U.S. Department of Homeland Security (DHS). Alan was responsible for overseeing the Department’s policy formulation function in the areas of border security and trade, cyber, critical infrastructure and resilience, threat prevention and security policy and strategy, and plans and risk assessments.

As Chief Diplomatic Officer for DHS, Alan led the Department’s international engagement and served as the principal advisor to the Secretary on all international affairs and functions; oversaw the strategic development and execution of the Department’s international policies and plans; facilitated DHS multilateral, regional, and bilateral relations with foreign governments, law enforcement agencies, and international organizations to ensure an integrated transnational affairs program for the Department; served as the lead Departmental representative in interagency policy deliberations affecting foreign relations; and served as the Departmental interlocutor with the Department of State and the foreign affairs community, including foreign governments and international organizations.

Alan served in 2010-2011 as Commissioner of U.S. Customs and Border Protection (CBP), a position in which he oversaw the operations of CBP’s 58,000 employee workforce and guided its efforts to secure the nation’s borders while expediting lawful trade and travel.

Between 2012 and 2015, Alan served as Vice President of INTERPOL for the Americas Region and as a lead Member of the INTERPOL Executive Committee. He was Chair of the Advisory Committee for the International Policing Division Steering Committee of the International Association of Chiefs of Police (IACP).

In 2009, Alan was Assistant Secretary and Special Representative for Border Affairs in the Department of Homeland Security. Previously, he served as U.S. Attorney for the Southern District of California and for nearly five years as the Attorney General’s Southwest Border Representative responsible for coordinating federal border law enforcement from South Texas to Southern California.

Photo of Sarah Bishop Sarah Bishop

Sarah Bishop advises companies on compliance best practices and enforcement risks arising under the U.S. Foreign Corrupt Practices Act, the UK Bribery Act, U.S. and UK anti-money laundering laws, and other financial crime laws. Qualified in the United States and as a Solicitor…

Sarah Bishop advises companies on compliance best practices and enforcement risks arising under the U.S. Foreign Corrupt Practices Act, the UK Bribery Act, U.S. and UK anti-money laundering laws, and other financial crime laws. Qualified in the United States and as a Solicitor of England & Wales, she is able to help companies navigate risks arising in both jurisdictions. She also has experience of other anti-corruption laws (e.g., France’s Loi Sapin II) and works with trusted local partners to deliver coordinated advice that takes into account the requirements of multiple legal regimes. Sarah’s compliance advisory practice includes helping multinational corporations develop and test the robustness of compliance programs, conduct risk assessments, conduct transactional and third party due diligence, navigate post-acquisition compliance integration projects, and deliver compliance training.

As a member of Covington’s Business and Human Rights practice group, Sarah advises companies on evolving developments and best practices related to the corporate responsibility to respect human rights, including in relation to supply chain due diligence and responsible sourcing, reporting and transparency obligations, and strategies for integrating human rights elements into existing compliance programs.

Sarah also helps clients navigate internal and government-facing investigations involving allegations of bribery and corruption, money laundering, export control and sanctions violations, fraud, and other forms of misconduct. She has handled matters before major international enforcement authorities, and she has been recognized by the Global Investigations Review as being among the leading women investigations practitioners worldwide. In addition to government enforcement matters, Sarah assists clients in suspension and debarment matters before the World Bank and other international financial institutions.

Photo of Alexander Chinoy Alexander Chinoy

Alexander Chinoy assists clients with the resolution of international intellectual property and trade disputes, appearing before a range of U.S. courts and agencies. He is an accomplished trade litigator who has been involved in more than 30 Section 337 unfair import investigations before…

Alexander Chinoy assists clients with the resolution of international intellectual property and trade disputes, appearing before a range of U.S. courts and agencies. He is an accomplished trade litigator who has been involved in more than 30 Section 337 unfair import investigations before the U.S. International Trade Commission (ITC), as well as a range of enforcement and regulatory matters involving U.S. Customs and Border Protection (CBP) and the U.S. Department of Commerce. Alex has been recognized as a leading Section 337 litigator by Chambers USA, with sources noting he is “impressive beyond his years of practice.”

Alex is a past President of the ITC Trial Lawyers Association, the leading bar association for Section 337 practitioners. He has hands-on experience with every phase of Section 337 investigations. He has participated in a dozen hearings at the ITC ranging from trials on violation to enforcement hearings and temporary relief proceedings. His experience spans every phase of 337 litigation, from pre-complaint counseling through appeal of final ITC determinations to the U.S. Court of Appeals for the Federal Circuit (CAFC), as well as CBP enforcement of ITC exclusion orders.

Alex has additional administrative experience before CBP, including classification and compliance matters, as well as before the U.S. Department of Commerce. His broader litigation experience includes district court intellectual property cases, and a range of trade disputes before the U.S. Court of International Trade. He has successfully argued appeals before the U.S. Court of Appeals for the District of Columbia Circuit and the CAFC. Alex has also counseled foreign governments and multinational companies on the use of trade policy tools to resolve international IPR issues and other business disputes, as well as regarding IPR border measures and enforcement remedies outside the United States.

Photo of Daniel Feldman Daniel Feldman

Drawing on his prior positions in government service spanning multiple Administrations, former Ambassador Dan Feldman’s practice focuses on environmental, social, and governance (ESG) counseling, business and human rights (BHR), global public policy, as well as broader international regulatory compliance. He is a member…

Drawing on his prior positions in government service spanning multiple Administrations, former Ambassador Dan Feldman’s practice focuses on environmental, social, and governance (ESG) counseling, business and human rights (BHR), global public policy, as well as broader international regulatory compliance. He is a member of the firm’s Global Problem Solving initiative.

As Chief of Staff and Counselor to Secretary John Kerry when he was appointed the first Special Presidential Envoy for Climate (SPEC) by President Biden, Dan helped drive the U.S. government’s international climate agenda, coordinating high level interagency policy-making, engaging with corporate stakeholders, and contributing to key bilateral and multilateral climate discussions, including last year’s Leaders’ Summit on Climate and the landmark UN Conference of Parties (COP26) in Glasgow.

Previously, Dan served as deputy and then U.S. Special Representative for Afghanistan and Pakistan at the U.S. Department of State in the Obama Administration, as Director of Multilateral and Humanitarian Affairs at the National Security Council in the Clinton Administration, and as Counsel and Communications Adviser to the U.S. Senate Homeland Security and Governmental Affairs Committee. He also has served as a senior foreign policy and national security advisor to a number of Democratic presidential and Congressional campaigns.

Dan has extensive experience counseling multinational corporations on mitigating risk and maximizing opportunities in the development and implementation of their ESG and sustainability strategies, with a particular background in advising on BHR matters. He was one of the first attorneys in the U.S. to develop a practice in corporate social responsibility, and has been cited by Chambers for his BHR expertise. He assists clients in strategizing about their engagements with a range of key stakeholders, including Members of Congress, executive branch officials, foreign government officials and Embassy representatives, multilateral institutions, trade and industry associations, non-governmental organizations, opinion leaders, and journalists.

Photo of Paul Mertenskötter Paul Mertenskötter

Paul Mertenskötter is an associate in the firm’s Brussels office and a member of the Public Policy and International Trade practice groups. He advises multinational companies, governments, and other clients on a range of matters related to public policy, international trade, and new…

Paul Mertenskötter is an associate in the firm’s Brussels office and a member of the Public Policy and International Trade practice groups. He advises multinational companies, governments, and other clients on a range of matters related to public policy, international trade, and new technologies. Mr. Mertenskötter’s practice encompasses advising clients on the European Commission’s Digital Single Market strategy, including on the Payment Services Directive (PSD 2).

Prior to joining the firm, Mr. Mertenskötter clerked at the International Court of Justice in The Hague, and was a Fellow at the Institute for International Law and Justice at NYU Law School. His work has been published with Oxford University Press and the Cornell Law Review.

Photo of Mark Plotkin Mark Plotkin

Mark Plotkin — broadly recognized as one of the nation’s preeminent regulatory advocates — represents clients before the Committee on Foreign Investment in the United States (CFIUS) and other U.S. government agencies. He delivers outstanding results for global clients across industries. Mark’s practice…

Mark Plotkin — broadly recognized as one of the nation’s preeminent regulatory advocates — represents clients before the Committee on Foreign Investment in the United States (CFIUS) and other U.S. government agencies. He delivers outstanding results for global clients across industries. Mark’s practice includes having negotiated some of the most challenging compliance and security agreements ever concluded with the U.S. government – agreements that in many instances now are the template for the relevant industries.

Clients refer to him as “the dean of the CFIUS Bar” with an “unmatched history, experience and network” (Chambers USA). The American Lawyer has twice honored Mark as “Dealmaker of the Year“— in 2016 for his role securing CFIUS clearance for GlobalFoundries’ multibillion dollar acquisition of IBM’s semiconductor unit, and again in 2019 for his team’s successful and novel efforts in the CFIUS process to defend Qualcomm from a hostile takeover attempt by Broadcom.

Chambers Global says “Plotkin is widely regarded as one of the top national security attorneys in the USA and has extensive experience in advising industry-leading names before the CFIUS panel.” He also is nationally ranked for his expertise in both financial services regulation and data privacy.

Mark received his bachelor of arts degree in history, summa cum laude and with departmental honors, from Yale College, where he was elected to Phi Beta Kappa. He received his law degree with honors from Harvard Law School, where he was Comments Editor of the Journal on Legislation. Mark previously taught American government at Harvard College. He is an adjunct professor of law at Georgetown University Law Center, where he teaches a seminar on national security law; he also lectures on national security law at Yale Law School and other venues. He is a former Governor of the Yale Alumni Association, a member of the American Law Institute, and a life member of the Council on Foreign Relations.

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Don Ridings practice focuses on international arbitration, complex civil litigation, and anti-corruption compliance. He dvises clients on a range of compliance issues arising under the Foreign Corrupt Practices Act and other anti-bribery regimes. He counsels clients on proposed transactions, guides companies as they…

Don Ridings practice focuses on international arbitration, complex civil litigation, and anti-corruption compliance. He dvises clients on a range of compliance issues arising under the Foreign Corrupt Practices Act and other anti-bribery regimes. He counsels clients on proposed transactions, guides companies as they develop or strengthen their anti-corruption compliance programs and controls, develops and delivers tailored training programs, leads internal investigations, and represents clients before enforcement authorities. Over the past decade he has advised scores of companies and organizations from around the world representing nearly every major industry.