Last month, Mexico’s Ministry of Economy published an administrative regulation prohibiting imports of goods produced with forced labor. The regulation will take effect on May 18, as part of the requirement by the United States–Mexico–Canada Agreement (USMCA). Employers should be aware of this significant development and proactively evaluate and manage forced labor risks across their North American operations and global supply chain.
The regulation is the newest development in a global trend aimed at addressing forced labor through public policy. A proposed EU due diligence law would impose obligations on EU and non-EU companies to evaluate supply chains for environmental and human rights issues and to address violations. Following the EU proposal, the the United States and Canada, the other two countries in the USMCA bloc, passed legislation banning imports of goods produced using forced labor.
- The new Mexico regulation contains a blanket prohibition on imports into Mexico of goods produced, in whole or part, through forced or compulsory labor, as defined by the Forced Labour Convention of the International Labour Organization.
- The Ministry of Labor and Social Welfare may initiate, on its own or at the request of a private party, an investigation into whether goods were produced using forced labor. If a private party requests an investigation, it must provide evidence supporting the forced labor allegation. Such findings (“resolutions”) will be published on the Ministry’s website and goods covered by such resolutions will be prohibited from entering Mexico.
- The regulation does not provide detail on scope, disclosure requirements, or compliance mechanism.
Outlook: The two Ministries are expected to issue further guidance for importers as the effective date approaches. With the broader push for supply chain due diligence, global companies should take a holistic approach to their forced labor and human rights compliance programs and integrate the due diligence process into business strategy.
