The EU has passed legislation banning the import or export of goods made using forced labour, as it also uses recently introduced regulation to launch a fresh investigation into China for alleged anti-competitive practices.

Details

The European Parliament detailed in a press release yesterday (23 April) that both member states and the European Commission (EC) itself will be given new powers to investigate “suspicious goods, supply chains, and manufacturers”.

The parliament also said that those found in breach of the regulations will have their goods “intercepted at the EU’s borders”.

Investigation decisions will be based on “factual and verifiable information” from “international organisations, cooperating authorities and whistle-blowers”.

“Several risk factors and criteria will be taken into account, including the prevalence of state-imposed forced labour in certain economic sectors and geographic areas.”

Forced labour

While the EU says that companies who can demonstrate that forced labour has been removed from their supply chains will be allowed to return their goods onto the single market, those who cannot do so will be forced to “donate, recycle or destroy them”. They may also be fined.

EU internal market committee rapporteur, Maria-Manuel Leitão-Marques, said:

“Today, worldwide, 28 million people are trapped in the hands of human traffickers and states who force them to work for little or no pay. Europe cannot export its values while importing products made with forced labour.”

‘Dawn raid’

The EU has put other new powers regulating imported goods to use yesterday (23 April), raiding a Chinese firm supplying security equipment in Poland and the Netherlands, according to the FT.

This is believed to be the first time the EU has used the anti-subsidiary powers to justify a raid on a company.

While the EC declined to comment, the Chinese Chamber of Commerce (CCC) later denounced the “dawn raid” as an act that “undermines the business environment for foreign companies within the EU in the disguise of foreign subsidies.”

So-called ‘dawn-raids’ are common investigatory tools through which investigators enter a business premises and seize evidence, and often occur in competition inquiries and similar matters.

Device probe

The raid on business premises comes as the EU launches the next in a line of investigations into anti-competitive trade practices by China, looking into whether Bejing has unfairly limited European medical device manufacturers from entering the Chinese market to supply hospitals and doctors.

It is the first use of a ‘International Procurement Instrument’ developed by the EU to probe such practices by foreign nations. The EC contends that Chinese laws – such as the ‘Buy China rule’ – favour “the procurement of domestic medical devices and services”.

It also suggests the Chinese government may have pursued a policy of “restricting the procurement of imported goods” and “imposing conditions in its centralised procurement of medical devices leading to abnormally low bids that cannot be sustained by profit-oriented companies”.