Why Businesses Need to Think Beyond the U.S. on Forced Labor Sanctions

Article Highlights:

• While forced labor was not a major supply chain concern over the past year or two, it’s set to re-establish itself as a significant risk in the near future. This is especially true on the global stage, where many countries are ramping up enforcement related to forced labor sanctions. 
• Though UFLPA enforcement actions trended downward in 2025, there are signals that the law and other forced labor regulations in the U.S. could be positioned for an uptick in enforcement actions in 2026. 
• In addition, beginning in 2027 the EU Forced Labor Regulation (EU 2024/3015) will be fully implemented. This impending directive is set to outright ban products with forced labor from being imported into, sold within, or exported from the EU.

Given the number of supply chain variables that have emerged over the past year or two—tariffs, armed conflict, material shortages—it’s easy to lose sight of an area of compliance that’s been significantly quieter over the past year: forced labor. 

This has been particularly true in the U.S. Enforcement figures from the Uyghur Forced Labor Prevention Act (UFLPA) are notably lower than in the previous few years. The Trump administration has shifted Customs and Border Patrol (CBP) attention to tariff enforcement. Staffing at many agencies tasked with enforcing sanctions has been cut. In 2025 and 2026, the reality is that enforcement of forced labor sanctions has been de-prioritized as a policy objective in the U.S. 

But while forced labor has not been a major supply chain concern over the past year, it’s set to re-establish itself as a significant risk in the near future. This is especially true on the global stage, where many countries are ramping up enforcement of forced labor sanctions. There are a range of major regulations that have either recently entered into force or will be coming into effect in the next few years. Some of the most important of these critical regulatory developments are summarized and discussed below.

For the vast majority of global companies in 2026, screening for forced labor and adhering to related compliance regulations isn’t something to loosely aspire to; it’s a vital component of a comprehensive compliance program.

U.S. Forced Labor Sanctions 

As of early 2026, over $3.9 billion worth of goods have been seized or detained under the UFLPA. In the four years since the law was enacted in 2022, there have been 42,000 detentions. The UFLPA stands out among U.S. forced labor sanctions as one of the few programs that’s actually robust enough to trigger seizures at the border. Over the past few years, Customs and Border Protection (CBP) has been empowered to confiscate goods suspected of either originating from the Uyghur region of China or being tied to a company with a history of exploiting Uyghurs. 

This has led many U.S. companies and importers to pay more attention to the law and its implications for imports. And while 2025 brought a few new developments to the UFLPA, no lists have been added under the Trump administration. CBP, meanwhile, has been busy implementing and enforcing the Trump administration’s tariff priorities through his first year-plus in office. 

But because of the seizure and reputational risks associated with forced labor noncompliance, companies should remain vigilant about any potential supply chain ties to the Uyghur region of China. And while it hasn’t been particularly active recently, the UFLPA remains a dynamic law that’s evolved a number of times over the years, changing its scope and focus in ways that can catch unprepared companies unawares at U.S. ports of entry. 

While it hasn’t been particularly active recently, the UFLPA remains a dynamic law that’s evolved a number of times over the years, changing its scope and focus in ways that can catch unprepared companies unawares at U.S. ports of entry. 

What to Look for in 2026 

While UFLPA enforcement actions trended downward in 2025, there are signals that UFLPA and other forced labor regulations in the U.S. could be positioned for an uptick in 2026. 

A December 2025 letter submitted by 13 members of Congress to CBP expressed concern that there have been no new additions to the UFLPA Entity List since January 15, 2025—despite ongoing new evidence of widespread forced labor transfers in the Uyghur Region of China. There’s also been continuing pressure from advocacy groups who are impervious to changes in the political climate, and who continue to push for stronger accountability for forced labor practices in China. 

Finally, there’s always the potential for a “rebound announcement,” where dozens of new organizations are added to the Entity List at once and enforcement begins quickly thereafter. This kind of abrupt development is especially dangerous for companies that have not been actively screening their supply chains for forced labor, and that failed due diligence could lead to serious legal and reputational consequences. To help mitigate this, Z2 maintains a Sanctions Watchlist of risky companies with credible allegations of forced labor issues that can serve as a strong screening reference for businesses looking to proactively assess their supply chain for high-risk entities.  

Indeed, a UFLPA rebound announcement—or another similar rapid enhancement in forced labor sanctions—remains a strong possibility in 2026. Limiting Chinese influence in the U.S. and pressuring China is politically popular on both sides of the aisle. Further, if the deals made by the Trump administration with China in 2025 have demonstrated anything, it’s that policies and trade relations between the two geopolitical rivals can change virtually overnight.

Another aspect of forced labor to keep an eye on in the U.S. is the Trump administration’s threats directing the U.S. Trade Representative Office to utilize Section 301. Under the Section 301 authority, the U.S. Trade Representative could begin investigating foreign economies for “failures to take action on forced labor.” While Section 301 has mainly been used by the current administration to apply tariffs to specific countries, the authority also allows for import restrictions and the suspension of trade benefits. This could mean that trade for certain sectors in specific countries could be restricted, or favorable tariff-free trade programs could be reduced unexpectedly under this authority.  

EU Forced Labor Update 

Beginning in late 2027, the EU Forced Labor Regulation (EU 2024/3015) will be fully implemented. This impending directive is set to outright ban products with forced labor from being imported into, sold within, or exported from the EU. Surprisingly, until this law passed in 2024, the EU did not have a region-wide ban on importing products made with forced labor. Instead, the EU had a patchwork of national-level legislation in select member states. But with the coming implementation of the Forced Labor Regulation, the EU is set to embrace a more consistent, rigorous framework for penalizing ties to forced labor. 

What to Look for in 2026

Between 2025 and 2027, the EU will build up a forced labor database that identifies high-risk countries, sectors, and products while also providing in-scope businesses with compliance guidelines around how to conduct due diligence. One key month for companies to look out for in 2026 is June, when these compliance guidelines are published for the first time. 

The publication of these guidelines could be interpreted as the starting gun for organizations to begin building and configuring the systems they’ll need to screen their supply chains for compliance, contact their suppliers, and begin working toward adherence with the forthcoming regulation. 

The EU has historically led the world in the development of screening-based regulation frameworks—including the CSRD and the CSDDD—and EU companies can expect comprehensive screening guidelines on compliance, due diligence, and risk indicators. While there is still a relatively long runway for companies to prepare for the EU Forced Labor Regulation, what makes it unique from other screening-based regulations is that there are no reporting or internal policy requirements, and all companies selling goods in the EU are subject to the law. 

This makes the regulation similar to the U.S.’s UFLPA law, in the sense that all companies are obligated to adhere to it. One key difference, however, is scope: While the UFLPA is limited to China and the labor exploitation of the Uyghurs, the EU’s forced labor law could very well be enforced for any number of forced labor practices all over the world.

The publication of new EU forced labor guidelines could be interpreted as the starting gun for organizations to begin building and configuring the systems they’ll need to screen their supply chains for compliance, contact their suppliers, and begin working toward adherence with the forthcoming regulation. 

Worldwide Forced Labor Update

In addition to the aforementioned forced labor sanctions, the UK, Canada, and Australia all have emerging developments to their respective Modern Slavery Acts (MSAs)—with varying requirements, scopes, and penalties for non-compliance entering into force. Out of these countries, Australia is the one that’s taking the largest steps to bolster its domestic MSA in 2026. 

For companies with global revenues above $100 million AUD that sell products in, or have some business relationship with, Australia, a mandatory annual report must be filed with Australian regulators. This report must identify the risks of modern slavery in a company’s supply chain, as well as outline the mitigation and due diligence actions taken, company policies to deter the use of forced labor in its products, and remediation processes. Additionally, companies are required to summarize the effectiveness of their deterrence and/or remediation actions with suppliers in the report.  

Since 2023, there’s been growing pressure on the Australian government to increase the effectiveness of the MSA. Out of 30 possible recommendations issued in a report to increase the effectiveness of the MSA, 25 were accepted in part or in full by the Australian government. In the two years since, the government has begun the process of implementing some of those recommendations, including creating a new Anti-Slavery Commissioner, additional compliance guidance, and targeted administrative improvements. 

The biggest changes, however, are expanded penalties for non-compliance and additional reporting requirements that focus on identified instances of forced labor. Further standardization of forced labor reporting, meanwhile, remains a possibility in the near future. All these current and impending changes to forced labor laws in Australia mean that in-scope businesses operating in the country need to start taking their due diligence more seriously. The risks of noncompliance—including financial penalties and reputational damage—are simply too profound to neglect. 

How Z2 Navigates Forced Labor Risks

Whether you’re the only compliance professional at your company or a member of a larger compliance team tasked with adhering to dozens of regulations, Z2’s supply chain mapping tool, sanctions screening, and Sanctions Watchlist dashboard can serve as meaningful resources in your weekly operations. 

Z2’s database has profiles of over 800,000 companies, allowing your team to quickly identify potential sub-tier connections to sanctioned entities, financial risks, and other hazards while onboarding a supplier. Z2 also provides an outreach solution and accompanying templates to survey your suppliers and collect the data you need to achieve regulatory adherence and understand compliance risks. 

When it comes to grappling with forced labor sanctions and other high-stakes compliance risks, the visibility, mapping, and data verification capabilities offered by Z2 can make a significant difference. To learn more about Z2 and how it can help companies navigate forced labor concerns of all kinds, schedule a free trial with one of our product experts.