In early February 2022, U.S. Senators Kirsten Gillibrand (D-NY) and Josh Hawley (R-MO) introduced a bipartisan bill to enact the Slave-Free Business Certification Act. The Act would impose significant new compliance and disclosure requirements on many companies. Thus, companies engaged in the mining, production, or manufacturing of goods for sale and reporting annual global gross receipts of more than 500 million US-Dollars would be required to conduct annual, highly detailed supply chain audits, with appropriate reporting, to detect the use of forced labor. The results would then have to be reported to the U.S. government, and violators would face potentially significant fines and penalties.
Currently, the adoption of the proposed legislation is still uncertain, but it’s a fact that it is part of a growing list of legislative and regulatory proposals, both in the EU and the U.S. Combating forced labor is one of the few bipartisan goals in the U.S. Congress and remains a top priority for lawmakers and executive branch policymakers. Therefore, companies should develop responsible sourcing compliance programs or review existing programs and assess their operations and supply chains for forced labor risk to ensure they are able to meet upcoming EU and U.S. legal obligations.