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In the span of just six weeks, three of the world’s largest trading economies announced significant changes to how they regulate forced labor in supply chains. While each reform is different, all three can be traced back to the same source of pressure.
On June 2, the US Trade Representative (USTR) found that 60 economies, including Canada, the UK’s trading partners in the EU, and Australia, had failed to adequately impose or enforce bans on the importation of goods made with forced labor, and proposed tariffs of 10–12.5 percent in response. Canada introduced sweeping new border enforcement legislation within days. The UK tabled mandatory disclosure requirements the same month. And in July, Australia’s Attorney-General announced a new criminal offence for large companies that fail to prevent modern slavery in their supply chains — citing the US tariff threat directly as a catalyst.
For any company doing business across these markets, the result is a rapidly evolving and increasingly fragmented regulatory landscape: some jurisdictions are shifting the burden of proof onto importers, others are mandating deeper disclosure, and others are introducing corporate criminal liability for the first time. Companies headquartered in the US, Canada, or Europe, with supply chains touching any of these markets, should view these developments as part of a single global enforcement trend rather than three isolated regulatory changes.
Background: The US Trade Action That Started It
In March 2026, USTR launched investigations of 60 countries under Section 301(b) of the Trade Act of 1974, examining whether their failure to ban or enforce a ban on forced-labor imports was unreasonable or discriminatory and burdened US commerce. On June 2, USTR found that 54 of the 60 economies had neither imposed nor effectively enforced such a prohibition, while a further six — Canada, Ecuador, the EU, Indonesia, Mexico, and Pakistan — had a prohibition in place but had failed to enforce it effectively.
USTR was particularly pointed about Canada, noting that the Canada Border Services Agency does not publish official enforcement statistics, and that the little information available showed Canadian authorities had intercepted just 50 shipments on suspicion of forced labor since 2020, with only two ultimately refused entry. On this basis, USTR proposed an additional 10 percent tariff on Canadian goods not otherwise exempt under CUSMA (the six economies with an existing prohibition, however weakly enforced, received the lower 10 percent rate; the remaining 54 face 12.5 percent). A public comment period ran through July 6, followed by three days of public hearings at the US International Trade Commission, ending July 9. USTR has not yet finalized the tariffs.
Notably, this US trade pressure arrived just as the broader USMCA relationship entered a period of uncertainty: on July 1, the US declined to renew the agreement for another 16-year term (Canada and Mexico had both signaled support for extending it), triggering a process of annual reviews that will continue until either a new agreement is reached or USMCA expires in 2036. Forced labor enforcement is now squarely part of that ongoing trade relationship, not a side issue — and the responses from Canada, the UK, and Australia below should be read against that backdrop.
Canada: Bill C-35 Moves From Disclosure to Border Enforcement
Canada responded to the USTR findings within days. On June 12, the federal government tabled Bill C-35, the Ban on Importing Goods Made with Forced Labour Act, which as of this writing has completed its first reading in the House of Commons. Canada’s submission to USTR pointed directly to the bill as grounds to drop the proposed tariff.
Canada has prohibited the importation of goods made wholly or in part with forced labor under the Customs Tariff since 2020, and certain entities are separately subject to annual reporting obligations under the Fighting Against Forced Labour and Child Labour in Supply Chains Act, in force since 2024. But that existing regime required the Canada Border Services Agency (CBSA) to demonstrate that a shipment was made using forced labor, a difficult standard to meet for goods manufactured in authoritarian countries. Bill C-35 would repeal that regime and replace it with a standalone framework closer to the US model, built around a “high-risk goods” list flagged by producer, country, or region. Once goods are listed, customs can demand supply-chain tracing documentation on request; if it isn’t provided, the goods are automatically deemed prohibited, without CBSA having to prove forced labor was actually used.
Bill C-35 would also give CBSA authority to detain suspect goods for up to 90 days, make importers and owners jointly liable for storage and disposal costs, narrow importers’ recourse to judicial review rather than a standard customs appeal, and extend liability downstream to distributors and retailers who knowingly hold or sell affected goods.
Parliament will not resume consideration of the bill until September, but compliance officers should prepare now. Companies with programs built around the US Uyghur Forced Labor Prevention Act (UFLPA) or Section 307 of the 1930 Tariff Act are close to ready, the underlying documentation and traceability work should largely transfer. Companies relying primarily on the EU Forced Labour Regulation should note the difference in sequencing: Bill C-35 puts the burden on the importer the moment goods are listed, while the EU regime requires authorities to establish a violation first.
More broadly, Bill C-35 reflects a growing shift away from transparency-based regimes toward enforcement models that require companies to demonstrate supply chain traceability when challenged.
UK: Mandatory Disclosure, but Not (Yet) Mandatory Due Diligence
On June 30, the UK government introduced proposed amendments to Section 54 of the Modern Slavery Act 2015, tabled as Part 5 of the Immigration and Asylum Bill, which had its second reading on July 13. The amendments would make the content of modern slavery statements mandatory for the first time, requiring in-scope organizations to report against a prescribed set of topics which were previously voluntary — risk assessments, policies, due diligence processes, training, and effectiveness measures — and to include a signed accuracy declaration. The bill also introduces financial penalties for non-compliance, a first for the UK’s modern slavery reporting regime.
The reforms are significant, but compliance teams should be clear about what they do—and do not—require. The bill strengthens transparency and reporting — companies will need to show their due diligence, in structured form, backed by a fine for getting it wrong. But it stops short of mandating human rights due diligence itself, and it does not introduce a forced labor import ban. The UK’s Independent Anti-Slavery Commissioner has been pushing for exactly that in a more ambitious model bill published in December 2025, and has publicly criticized the current amendments for not going further, warning that the UK risks becoming “a dumping ground for forced labor goods” relative to peers like Canada, Australia, and the EU. A Government minister has separately indicated the government expects to introduce substantive due diligence legislation, along with an EU-style import ban, before the end of this parliament.
For now, companies with UK exposure should focus on building out documented, evidenced due diligence processes in preparation for legal reforms, even though the legal duty to do so hasn’t yet arrived — both because the accuracy declaration raises the stakes of overstating existing practice, and because more substantive obligations are visibly coming.
Australia: A New Criminal Offence for Large Companies
On 16 July, Australia’s Attorney-General Michelle Rowland announced that the government would strengthen the Modern Slavery Act 2018 with a new criminal offence and a new civil penalty regime. Under the proposed changes, companies with annual consolidated revenue over A$100 million would need to show they took reasonable steps to prevent modern slavery, including forced labor and debt bondage, in their supply chains outside Australia, or face criminal sanctions; a “reasonable steps” defence would be available to companies that can demonstrate genuine efforts. Civil penalties would also apply for failures to meet existing reporting obligations under the Act. The size of the fines has not yet been set and will follow a consultation process, though officials have indicated they’re expected to scale with company size.
The proposed offence closely mirrors Australia’s corporate foreign bribery “failure to prevent” offence under section 70.5A of the Criminal Code. If enacted, it would become only the second “failure to prevent” offence in Commonwealth law—and the first to extend that model beyond economic crime into human rights and supply chain accountability. Notably, this goes further than the 30 recommendations from the statutory review of the Act tabled in Parliament in May 2023, which did not propose a criminal offence at all.
The announcement’s timing was pointed: it came just 8 days before the temporary 10 percent Section 122 tariff was due to expire and be replaced by USTR’s proposed 12.5 percent Section 301 tariff on Australian goods (Australia, unlike Canada, does not have an existing import prohibition, so it falls into the higher tariff tier). Australia’s government had separately formally protested its inclusion on USTR’s list, arguing there was no credible basis for treating its current framework as unenforced, while simultaneously moving to close the gap the US had identified. That makes Australia the clearest example yet of the US trade action functioning as a forcing mechanism for other governments’ modern slavery policy, not just a Canada-specific story.
For Australian-exposed companies, the shift from voluntary reporting to a criminal offence with a due-diligence defence is significant: it means “reasonable steps” documentation, not just an annual statement, becomes the thing standing between a company and criminal liability.
How Companies Should Respond
The common thread across all three jurisdictions is a move away from disclosure-only regimes and toward regimes with real consequences, though each is moving at a different pace and along a different mechanism:
- Canada is shifting the burden of proof onto importers at the border, with detention and joint liability risk.
- The UK is mandating structured disclosure and creating financial penalties for inaccurate reporting, with substantive due diligence obligations and an import ban still to come.
- Australia is introducing outright criminal liability for large companies, with a “reasonable steps” defence that makes documented due diligence essential.
Compliance officers working across these markets should, in the near term:
- Map supply chain exposure by product and region, including sub-tier suppliers, across all markets where the company operates or imports, not just the jurisdiction currently in the news.
- Review supplier contracts for representations, audit rights, and termination triggers tied to forced labor compliance, recognizing that Canada’s and Australia’s changes both extend liability or exposure beyond the direct importer.
- Treat existing UFLPA, Section 307, or EU Forced Labour Regulation programs as a starting point, not a finish line — the underlying traceability work transfers across jurisdictions, but the specific triggers (a high-risk goods list in Canada, an accuracy declaration in the UK, a “reasonable steps” test in Australia) each require their own evidentiary record.
- Monitor the ongoing USMCA annual review process and the UK’s own signaled follow-on legislation, both of which suggest forced labor enforcement will keep evolving rather than settling into a stable baseline.
Perhaps the most important takeaway is that these developments should not be viewed in isolation. US trade policy is increasingly influencing forced labor legislation well beyond its own borders, and that dynamic is likely to continue. Rather than responding jurisdiction by jurisdiction, organizations should build compliance programs that are flexible enough to adapt as additional countries strengthen enforcement and due diligence expectations.