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Canada Cracks Down on Forced Labor

06/16/23 5 minute read

Joining the ranks of the U.S. and Germany, Canada had passed its own forced labor legislation. The bill, which goes into effect next year, will require Canadian businesses to complete reporting requirements on their efforts to prevent forced labor.

Here’s what you need to know about the new legislation:

What does the bill state?

After years of stalled efforts, the Canadian Parliament passed Bill S-211, An Act to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff in May of 2023. The act will take effect on January 1, 2024 and will impose significant reporting obligations on Canadian businesses and importers.

Businesses that meet certain thresholds will be required to file detailed public reports on measures they have taken to identify, address, and prevent forced labor, prison labor, and child labor in their supply chains. The first report will be required to be filed on or before May 31, 2024. These reports will need to be filed annually with the Minister of Public Safety and Emergency Preparedness on or before May 31, 2024.

Reporting obligations will apply to any private-sector entity that is:

  • Producing, selling, or distributing goods in Canada or elsewhere
  • Importing goods produced outside Canada into the country
  • Controlling an entity engaged in either of the above activities

The entities above are defined as a corporation or a trust, partnership or other unincorporated organization that:

  • Is listed on a stock exchange in Canada
  • Has a place of business in Canada, does business in Canada or has assets in Canada
  • Has met at least two of the following three conditions in at least one of its last two financial years:
    • Had at least C$20 million in assets
    • Generated at least C$40 million in revenue
    • Employed an average of at least 250 employees

How can Canadian companies prepare?

While Bill S-211 doesn’t go into effect until next year, it’s never too early for Canadian businesses to prepare for the changes to come. There aren’t yet specific guidelines on what details will need to be provided in the annual reports, but the more information a business has on its supply chains the better.

To ease the process of next year’s report, companies can take the following steps:

  • Conduct a complete risk assessment of its supply chain
  • Gain an understanding of the parts of its supply chain that may carry a risk of forced labor
  • Review or develop policies and practices related to the prevention forced or child labor
  • Develop training and education for employees on forced and child labor

>> Learn how to enhance your supply chain audit with Chinese public records <<

With a commercial risk intelligence platform, such as Sayari Graph, compliance teams can leverage global public records and graph technology to gain visibility into complex, cross-border corporate networks for a thorough audit of associated importers, exporters, and manufacturers. Precomputed forced labor risk indicators and a suite of graph analytics tools empower import control teams to quickly and confidently diligence sub-tier supplier networks. The platform’s continuously updated public records will ensure that you’re always working with the most current information on ownership. For example, U.S. Customs and Border Protection also relies on Sayari Graph data to investigate UFLPA violations, a similar law to Bill S-211.

If you’re planning for or amidst a supply chain audit, watch one of our in-house analysts perform an example investigation and learn how to mitigate the risk of forced labor in global supply chains.

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