A changing regulatory environment: what has evolved since July

Section 301 · the court case

The Section 301 forced labour tariffs took effect on 24 July and were in court the same day. Importers sued first. Then, on 3 August, 25 states filed their own complaint at the US Court of International Trade, arguing there is “no rational fit between the purported problem of forced labor in international supply chains and the blanket global tariffs”.¹ The government filed its defence on 4 September: the US Trade Representative acted “by Section 301’s book”.² Amicus briefs are piling in, all of those I can find are on the plaintiffs’ side.³ The plaintiffs filed their reply on 18 September, and oral argument is set for 30 September. Whichever way the three-judge panel goes, expect an appeal.⁴

Congress · tiers · textile quotas

Do not expect relief from Congress. A Senate bill to end the tariffs and refund them automatically was introduced on 1 September; a Republican senator objected to a unanimous consent request two weeks later and that ended the debate.⁵ Tiers have not moved: I can find no USTR notice moving any economy between them since July. The textile quotas promised to Bangladesh, Cambodia, Indonesia and Malaysia need their own Federal Register notice; USTR told the President they would be feasible by 1 September, and as of 23 September no notice had appeared.⁶ Importers from those four countries are still paying the full 10%. And another layer is waiting. Separate Section 301 investigations into excess manufacturing capacity, covering more than a dozen trading partners, are due to report, reportedly with a further 7.5% on Chinese goods. Bloomberg reported on 17 September that the announcement would wait until after the Trump and Xi summit.⁷

USTR · training for 50+ partners

Washington is building a network on forced labour enforcement. On 15 September, USTR, Homeland Security, Customs and Border Protection and the Department of Labor ran a training workshop for more than 50 trading partners on how to impose and enforce a forced labour import ban. The release names twelve economies that have adopted prohibitions (generously; the list includes Canada, whose bill is still at first reading, and the EU, whose regulation applies from December 2027), says “dozens more” have expressed interest, and states the intention to “set a new, global standard for combating the trade in forced labor goods”.⁸ Read the tariff tiers as a door rather than a wall. There is no formal process for moving from 12.5% to 10%; the tiers sit in USTR’s discretion. But the route to the lower rate is clear enough: legislate, and then enforce.

Import bans · Vietnam, India, Taiwan

The bans announced in July are now entering into force, with varying machinery behind them. Vietnam’s Decree 292 took effect on 5 September; as far as I can find, the covered goods have not been listed.⁹ India’s prohibition took effect on 13 August, and the enquiry procedure was written into the Handbook of Procedures on the day the notification issued.¹⁰ Taiwan set up a cross-agency review committee on 30 July that must decide, within 30 days of receiving a complete file, whether goods identified by a partner country should be blocked.¹¹ Three laws, three states of readiness, and in each case no first case yet. For suppliers in these economies the question has shifted from whether to when and how.

Canada · UK · Australia · Japan

Others are slower. Canada’s import ban bill has not moved since its first reading in June, although the consultation on the regulations to sit under it (a public list of at-risk goods, and what importers must be able to produce for the border agency) has been running since July.¹² The UK says “in due course” (more on that below). Australia and Japan sit in the 12.5% tier (Japan’s rate includes its normal duties) and have not announced a ban. And the critics remain right that a ban without enforcement is a paper promise. Which is why the enforcement machinery, not the statute, is what we need to watch.

UFLPA Entity List

The largest expansion of the UFLPA Entity List to date. On 31 July, effective 3 August, Homeland Security added 43 companies, taking the list to 187. Aluminium, cotton and textiles, gold, pharmaceuticals, tomatoes.¹³ Roughly half of the new names operate outside Xinjiang.¹⁴ Screening by geography alone was never enough, and this makes the point. Obviously, you need to know the corporate group and the inputs.

CBP · supply chain disclosure

Customs is exploring asking for your supply chain map to become routine. On 2 September, CBP published an advance notice of proposed rulemaking on “heightened import disclosures for supply chain visibility.” Its 64 questions cover requiring foreign export documents, identifying manufacturers, shippers and sellers with global business identifiers, tracing raw material origins and the role of AI in doing so, and whether trusted trader (CTPAT) members should be required to use enhanced tracing technology. Comments are due 1 December.^15,16 This is a notice, not a rule, and a proposed rule with its own comment period would follow. But the direction is unmistakable: the multi-tier mapping that CBP currently demands when a shipment is detained is on its way to becoming an entry requirement.

DOJ · Congress

Prosecutors are joining customs. The Department of Justice’s Fraud Division set out its priorities on 13 August and named “supply chains polluted by forced labor” as a target of its criminal enforcement strategy; practitioners expect the False Claims Act, with its whistleblower incentives, to remain the civil tool alongside it.¹⁷ Congress is active too. The House Ways and Means Committee advanced a bill on 16 September directing the Forced Labor Enforcement Task Force to target forced labour in Congolese cobalt supply chains,¹⁸ and a version of the Manifest Modernization Act, which would open air, truck and rail manifests to public view, sits in the manager’s package of amendments to the Senate’s version of the defence bill, which had stalled as of early September.¹⁹ More visibility will mean more allegations, and more investigations.

MOFCOM countermeasures list

This is the most important development of the period. On 5 August, China’s Ministry of Commerce placed the Responsible Business Alliance, Verité, Altana Technologies, Applied DNA Sciences and two others on its countermeasures list under the Anti-Foreign Sanctions Law, for having “assisted and supported” US sanctions related to Xinjiang. Organisations and individuals within China are prohibited from “transactions, cooperation and other activities” with them, effective immediately.^20,21 It came days after the UFLPA list expansion. The standard toolkit for forced labour due diligence in China needs to be re-thought for anyone operating inside China (and it’s high time to do that anyway). How far the order reaches into foreign-invested subsidiaries and individual auditors is untested.

Knock-on effects · CCCMC, RMI, RBA

The knock-on effects came fast. The metals and minerals chamber of commerce told its members the next day to halt RBA and RMI audits, training, fee payments and data submissions.²² RMI responded by extending the validity of existing assessments for China-based smelters and refiners “until further notice”, rather than delisting them.²³ RBA says its operations outside China are unaffected.²⁴ The same day, Beijing also suspended follow-up factory inspections by US certification bodies, tightened export controls on drone components bound for the US, and opened its first national security investigation under the Foreign Trade Law, into imported printers and copiers.²⁵

What to do now

In July I called Decrees 834 and 835 sanctions law déjà vu that needed governance, not just awareness. The August listing uses a different instrument, the Anti-Foreign Sanctions Law, but the effect is the same and the advice has moved from useful to necessary. The counsel guidance is consistent: map every touchpoint with the listed organisations, review scheduled audits that involve Chinese facilities or auditors, look at alternative schemes, take Chinese legal advice before terminating suppliers, and document every refused data request together with the advice received and the compensating measures taken. That record will matter for showing appropriate measures under the EU rules and in any conversation with CBP, which will still require clear and convincing evidence.^26,27 Chinese counsel note that the framework includes exception approval mechanisms for Chinese counterparties, so an application route may exist.²⁸ No public investigation under the Decree 835 supply chain measures has been reported yet. This does not mean none are happening.

Mineral sourcing initiative

Beijing is also building its own version of due diligence. On 17 September, the Ministry of Commerce endorsed a “self-discipline initiative” on sustainable overseas mineral cooperation, launched by the metals chamber, the China Mining Association, the iron and steel association and nearly 30 companies.²⁹ The chamber has had due diligence guidelines for mineral supply chains, developed with the OECD, since 2015, so this is not new ground; the timing is.³⁰ A Chinese-origin responsible sourcing framework is being positioned as the domestic alternative to RMI-style schemes for critical minerals.

Tariff response · environmental code

Two smaller notes. Beijing’s response to the 12.5% tariff was to call it “a typical act of unilateralism and protectionism” imposed under the pretext of “forced labor”, while reserving the right to respond.³¹ And China’s new Ecological and Environmental Code entered into force on 15 August, putting the national carbon market on statutory footing.³² The carbon data architecture I described in July now has a legal anchor in China too.

US pressure on CSDDD and CSRD

Washington has turned its attention to Brussels. On 14 August the US Ambassador to the EU declared it “time for the EU to deliver” on last year’s trade framework, and the US Mission published Washington’s demands: limit CSDDD to EU-based companies and EU-linked activities, designate the US a “negligible risk” jurisdiction, base fines on EU revenue only, and narrow CSRD for non-EU companies. A joint statement on non-tariff issues may come this autumn.³³ The Commission’s reply to the demands was that “neither our rules framework nor our regulatory autonomy are up for negotiation”; the day before, the Ambassador had called CBAM “a tariff in substance”.³⁴

ESRS · value chain cap

The simplified reporting standards are settled. The revised ESRS and the voluntary standard for smaller companies were published in the Official Journal on 21 September (the ESRS act enters into force on 10 November), applying to financial years from 1 January 2027.^35,36 The value chain cap I flagged in July is now operational: for reporting purposes, in-scope companies cannot ask partners with 1,000 or fewer employees for more than the voluntary standard covers, with greenhouse gas data carved out. But the cap only covers reporting-driven requests; it does not limit what EUDR, CBAM, the Forced Labour Regulation or UFLPA require you to know about the same suppliers. Your supplier questionnaire, and your supply chain engagement strategy, still needs redesigning around those laws, not shrinking to the voluntary standard.

CSDDD

CSDDD itself is quiet. The consultation on implementation guidelines closed on 14 August with submissions from UNICEF, Human Rights Watch, trade unions and others.³⁷ No draft has appeared; the main guidelines are due by July 2027. 2029 remains the date, and it is not moving further away.

EUDR

EUDR is holding at 30 December 2026. The scope amendment was published on 17 September and entered into force the next day: cattle hides and leather, retreaded tyres (only the rubber treads stay in), rubber belts, soybeans for sowing and vehicle seats are out; soluble coffee, palm oil derivatives and frozen cattle tongues are in, from 30 December 2027.^38,39 The Commission has opened information system training sessions for October.⁴⁰ The US Ambassador has called the regulation “textbook over-regulation”; Ferrero, Barry Callebaut and Nestlé support the regulation, and Nestlé has signalled it is ready.⁴¹ No delay proposal is on the table.

Forced Labour Regulation

The Forced Labour Regulation is moving from text to preparation. The Commission ran a launch event on 14 September and an SME session on 16 September, with sector webinars through October and November covering solar, textiles, electronics, agri-food, automotive and fisheries.⁴² It has also tendered, with a 28 September deadline, for supply chain traceability services and forced labour risk detection pilots to support its own investigations.⁴³ The regulator is buying traceability capability of its own, to test yours against. The risk database remains “in development”.⁴⁴

CBAM

CBAM is getting bigger. On 15 September the European Parliament adopted its position on extending the carbon border charge to downstream goods, backing coverage of around 457 product lines against roughly 180 in the Commission proposal and 200 in the Council’s June position. Fasteners, wire, springs, household metal articles.^45,46 Negotiations with the Council follow, with application proposed from 1 January 2028.⁴⁷ Over August the Commission also issued ten guidance documents for the definitive period, guidance on verification and accreditation, and corrected default values.⁴⁸ Supplier emissions data is not only a reporting question, but a cost line for a growing list of products.

Green and social claims

Claims policing starts in earnest on 27 September, when the Empowering Consumers Directive applies. Generic environmental claims are banned unless proven, offset-based “climate neutral” claims are banned outright, sustainability labels must rest on a certification scheme or a public authority, and social claims about working conditions and human rights are treated exactly like environmental ones. Twenty member states were late transposing it, so enforcement will be uneven for a while; the standard is not.⁴⁹ Norway’s consumer authority published aligned guidance on 21 September, ahead of its own transposition.⁵⁰ “Ethically sourced” on a pack now needs a verifiable scheme behind it.

Battery passport

The first live product passport is taking shape. On 21 August the Commission published guidance on the 71 data points of the digital battery passport, mandatory from 18 February 2027 for EV, light transport and industrial batteries above 2 kWh.⁵¹ The identifier and data carrier choices I mentioned in July now have a specification to work from.

UK · Immigration and Asylum Bill

The UK Immigration and Asylum Bill, which rebuilds Modern Slavery Act reporting and adds financial penalties of up to the greater of £1 million or 1% of turnover, entered committee stage on 15 September with a reporting deadline of 3 November.⁵² The Independent Anti-Slavery Commissioner told the committee that the UK imports “more than £20 billion-worth of goods every year that are at risk of being produced using forced labour”, and pressed to turn the reporting clauses “more towards mandatory human rights due diligence”.⁵³

UK · import ban and the NCA

On the import ban, the government is still deciding. In the Lords on 4 September the business minister confirmed the Responsible Business Conduct Review “is complete”, that it considered mandatory due diligence and import bans, and that the government will “set out our approach in due course”.⁵⁴ Separately, the National Crime Agency wrote to Parliament on 3 September that it will not open a proceeds of crime investigation into Xinjiang cotton imports, citing “insufficient evidence”, and pointed to HMRC and Border Force as the agencies responsible for the “broader opportunities to identify and disrupt” such imports.⁵⁵ In short, if the UK is going to enforce, it will enforce at the border.

Australia · failure-to-prevent offence

Australia opened consultation on its criminal failure-to-prevent offence on 21 August, closing 25 September. Companies with consolidated revenue above A$100 million; a reasonable steps defence with the burden on the company; penalty options up to 10% of annual turnover; deferred prosecution agreements.^56,57 The reasonable steps defence makes documented, effective due diligence the compliance standard, and the guidance on what counts has not been written yet. Walk Free’s “Off the Books” report (6 August, with the Migrant Justice Institute and the Australian Anti-Slavery Commissioner) sets out four workplace red flags and one instruction: verify with workers and suppliers as well as the records.⁵⁸

New Zealand · Modern Slavery Bill

New Zealand ran out of time. The select committee reported back on 31 August recommending its Modern Slavery Bill pass, with a NZ$100 million threshold, penalties up to NZ$600,000, and acceptance of Australian statements in lieu.⁵⁹ On 21 September the Prime Minister said Parliament would not get time, while promising to bring the bill back next term, and Parliament rose on 23 September for the November election.⁶⁰ It lapses at dissolution, with the Leader of the House calling reinstatement in early 2027 “exceedingly likely”: a bipartisan bill with broad support that ultimately ran out of time.

Certification · cocoa

The Lindt case has produced no public procedural step that I can find, but the certifiers are moving anyway. Rainforest Alliance opened consultation on 30 July (stakeholder webinar 11 August, closing 13 October) on a cocoa-specific standard with an optional child labour monitoring and remediation module,⁶¹ and on 16 September published an explainer stating that “rather than confirming the absence of such issues, audits assess whether the systems, processes, and controls are in place”.⁶² In short, certification is narrowing what it certifies. How this impacts product claims, consumer expectations and law will be interesting to see.

Standards · ISO 37200 and private schemes

Standards continue to lag practice. ISO 37200 on managing modern slavery risk has still not been published; it was approved for final draft on 17 July and has not moved since.⁶³ In the meantime the private schemes fill in: Fairtrade’s revised textile standard came into force on 1 September, Textile Exchange issued human rights guidance for its materials standard, and the Fair Labor Association warned about the misuse of temporary labour in Pakistan’s garment sector.^64,65,66

California · climate disclosure

California reset the clock, but action is still needed. The first Scope 1 and 2 deadline moved to 10 November 2026, with first-year relief: prior year data is acceptable, submissions will be accepted with or without assurance, and companies not collecting data when enforcement was announced may file a statement of non-reporting.⁶⁷ For 2027 the regulator proposes to limit mandatory Scope 3 to five categories, including purchased goods and services.⁶⁸ The Ninth Circuit appeal is still pending. Purchased goods means supplier data, or estimates until you have it. As before, same suppliers, same map, same production, just a different externality and a different data set.

Financial crime · FinCEN and Treasury

The financial crime link I drew in July is now in a bank alert. On 3 September, FinCEN alerted financial institutions to the scam centres of Cambodia, Burma and Laos, staffed by trafficked people who “may have their passports taken to prevent them from leaving and are coerced into perpetrating online fraud”; its accompanying analysis identified roughly US$12.7 billion of suspicious activity reported to it in connection with these scams.⁶⁹ Treasury sanctioned the marketplace, escrow and payment app infrastructure serving those centres on 9 September.⁷⁰ Forced labour as a money laundering typology. How will this typology expand? We will see, but I would eventually expect the questions to arrive from the bank as well as the customer.