Key Takeaways
- There is no single “Supply Chain Due Diligence Act” in UK law — the framework is built on the Modern Slavery Act 2015, updated Home Office guidance, and incoming EU rules that catch UK firms.
- The Modern Slavery Act Section 54 applies to any organisation with £36 million or more in annual turnover that supplies goods or services in the UK.
- The Home Office’s March 2025 statutory guidance overhaul introduced a two-tier reporting framework (Level 1 and Level 2) that raises the bar significantly for larger or higher-risk organisations.
- The EU Corporate Sustainability Due Diligence Directive (CSDDD) entered into force in March 2026 and will apply to UK companies with €1.5 billion or more in EU turnover from July 2029.
- The UK government is actively considering mandatory human rights due diligence legislation — the direction of travel is clear, and early preparation is cheaper than catching up later.
There Is No Single “Act” — Here Is What Actually Applies
If you have heard someone mention a “UK Supply Chain Due Diligence Act”, they were probably conflating several things. The UK does not have a standalone supply chain due diligence statute. What it has is a framework of overlapping requirements tightening year by year.
The foundation is the Modern Slavery Act 2015, Section 54 — the Transparency in Supply Chains (TISC) provision. For a broader look at how compliance obligations fit together, see our guide to UK customs compliance for importers. On top of that sits the Home Office’s substantially strengthened statutory guidance (March 2025), an ongoing government review of responsible business conduct, and — for UK companies with significant EU operations — the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), which entered into force on 18 March 2026.
If your business imports goods into the UK, moves freight across borders, or manages a supply chain that touches higher-risk sourcing regions, all of this applies to you. The same due diligence principles that underpin post-clearance customs audits apply here — knowing your supply chain is the foundation of getting both right. Here is what each piece demands and what you should do about it.
Modern Slavery Act 2015: The Foundation
Section 54 of the Modern Slavery Act 2015 requires any commercial organisation that supplies goods or services in the UK and has an annual turnover of £36 million or more to publish an annual modern slavery statement.
That statement must set out the steps the organisation has taken during the financial year to ensure that slavery and human trafficking are not taking place in any of its supply chains or in any part of its own business. Organisations below the threshold can publish voluntarily — and many do, because large customers increasingly demand it from their suppliers.
The legislation covers six areas:
- Organisational structure and supply chains — who you are, what you do, and where your suppliers operate.
- Policies — your formal commitments on modern slavery, including procurement policies and supplier codes of conduct.
- Due diligence processes — what you actually do to identify, prevent, and mitigate modern slavery risks in your supply chain.
- Risk assessment and management — how you identify high-risk suppliers, sectors, or geographies, and what you do about them.
- Monitoring and evaluation — how you measure the effectiveness of your due diligence, using KPIs where possible.
- Training — what training you provide to staff, particularly procurement, logistics, and compliance teams.
The statement must be approved by the board of directors (or equivalent) and signed by a director. It must be published on your website with a prominent link from the homepage, ideally within six months of your financial year-end. Previous statements should remain accessible so that year-on-year progress is visible.
The March 2025 Guidance Overhaul: What Changed
In March 2025, the Home Office published its first substantive update to the TISC statutory guidance since the Act was introduced. This was not a minor refresh — it introduced a two-tier reporting framework that significantly raises expectations for larger and higher-risk organisations.
Level 1 (basic disclosure) is the minimum for all in-scope organisations. It requires a statement covering all six reporting areas, but the depth of disclosure can be proportionate to the organisation’s size and risk profile.
Level 2 (enhanced disclosure) applies to organisations that are either large (typically 1,000+ employees) or operating in high-risk sectors or sourcing regions. Level 2 expects:
- Detailed, named supplier risk mapping, not generic statements.
- Specific due diligence actions taken, with outcomes.
- Quantitative KPIs — for example, the number of supplier audits conducted, the number of non-compliances found and remediated.
- Evidence that the board has actively engaged with the statement, not just signed it.
The guidance also made clear that a statement saying “we have taken no steps” — while still technically permitted under the Act — is no longer considered acceptable. The government has signalled that it views such statements as evidence of non-compliance with the spirit of the law, and they may inform enforcement priorities.
According to the International Labour Organization, an estimated 27.6 million people are in forced labour globally, generating approximately £185 billion in illegal profits each year. The Home Office guidance cites these figures to underline why paper-thin compliance is not enough.
What Is Coming: Mandatory Due Diligence on the Horizon
The UK government is under growing pressure to move from a transparency-only model to mandatory human rights due diligence (HRDD). In July 2025, the Joint Committee on Human Rights published a report recommending:
- Mandatory HRDD legislation — requiring companies to identify, prevent, and remediate human rights impacts in their supply chains, not just report on them.
- An import ban on goods produced with forced labour — similar to the EU’s Forced Labour Regulation and the US Uyghur Forced Labor Prevention Act.
- Removal of the “no action taken” option under Section 54(4)(b) — making it impossible to publish a statement that says nothing was done.
- Extension of the duty to public bodies — bringing government procurement under the same scrutiny.
- Alignment with the EU CSDDD — so that UK companies are not operating under two incompatible regimes.
The government’s response in October 2025 acknowledged the seriousness of these recommendations but did not commit to immediate legislation. It did establish an Office for Responsible Business Conduct within the Department for Business and Trade, and the Home Office confirmed it is “actively considering legislative vehicles to strengthen the Act.”
The direction of travel is clear. If you are a UK importer or logistics operator, the question is not whether mandatory due diligence is coming — it is when.
The EU Dimension: CSDDD and UK Companies
The EU’s Corporate Sustainability Due Diligence Directive (Directive (EU) 2026/470) entered into force on 18 March 2026. It is the most ambitious supply chain due diligence legislation ever enacted, and it catches UK companies directly.
Who it applies to:
- EU companies with 5,000 or more employees and €1.5 billion or more in net worldwide turnover.
- Non-EU companies (including UK firms) with €1.5 billion or more in net turnover generated in the EU.
The thresholds were raised significantly by the Omnibus I Directive (February 2026), which cut the original scope by roughly 80%. But for the largest UK companies with substantial EU operations — think multinational manufacturers, retailers, and logistics groups — the CSDDD is a hard legal obligation, not a voluntary framework.
What it requires:
Companies in scope must:
- Identify and assess actual and potential adverse human rights and environmental impacts in their own operations, their subsidiaries, and their chain of activities (a defined term covering upstream suppliers and downstream distribution, transport, and storage — but not product use or disposal).
- Prevent, mitigate, and bring to an end those adverse impacts.
- Adopt and put into effect a climate transition plan aligned with the Paris Agreement.
- Engage meaningfully with affected stakeholders, including workers and communities.
Penalties: Member States must provide for maximum fines of at least 3% of net worldwide turnover for serious violations. There is also civil liability for damages — meaning affected parties can sue.
Timeline: EU Member States must transpose the directive into national law by 26 July 2028, with compliance obligations beginning from 26 July 2029. That sounds distant, but the supply chain mapping, policy development, and system changes required take years to implement properly.
Why this matters for UK importers: Even if your company is well below the €1.5 billion EU turnover threshold, you may be a supplier to a company that is in scope. CSDDD-covered companies are required to flow due diligence requirements down their supply chains. If you sell to a large EU customer, expect to receive detailed questionnaires, audit requests, and contractual clauses on human rights and environmental compliance — starting well before 2029.
EU Forced Labour Regulation: A Separate Instrument
Alongside the CSDDD, the EU has adopted the Forced Labour Regulation (EUFLR), which bans products made with forced labour from being placed on or exported from the EU market. Unlike the CSDDD, which is a due diligence obligation, the EUFLR is a product ban enforced by customs authorities and national competent authorities.
If a product is suspected of involving forced labour, it can be detained at the border, investigated, and — if the suspicion is confirmed — withdrawn, recalled, or destroyed. The regulation applies to all products regardless of company size or sector.
The European Commission is expected to publish implementing guidelines by mid-2026. For UK exporters to the EU, this means customs declarations and supply chain documentation will face additional scrutiny.
Practical Steps for UK Importers and Logistics Operators
You do not need to wait for mandatory legislation to build a defensible due diligence programme. Here is what to do now:
1. Map Your Supply Chain
Start with Tier 1 suppliers — the ones you pay directly. Identify their location, the goods or services they provide, and any known risk factors (sector, geography, workforce profile). Then push to Tier 2 and beyond where the risk is highest. You cannot manage what you cannot see.
2. Conduct a Risk Assessment
Not all supply chains carry the same risk. The Home Office guidance identifies high-risk sectors including textiles, agriculture, construction, electronics, and logistics itself. High-risk geographies include regions with weak labour enforcement, state-sponsored forced labour programmes, or high levels of migrant worker exploitation. Prioritise your efforts where the risk is greatest.
3. Write or Update Your Modern Slavery Statement
If you are above the £36 million threshold, you must publish a statement. If you are below it, consider publishing voluntarily — it is increasingly a commercial expectation, particularly if you are bidding for contracts with larger organisations or public bodies. For businesses that also handle controlled goods and import licensing, due diligence documentation serves double duty as evidence of reasonable care. Follow the six-area structure, use the Level 1/Level 2 framework as your benchmark, and make sure the statement is board-approved and signed by a director.
4. Build Due Diligence Into Procurement
Add modern slavery and human rights clauses to supplier contracts. Require suppliers to provide their own modern slavery statements or equivalent disclosures. Include right-to-audit provisions. For high-risk suppliers, conduct or commission independent audits.
5. Train Your Team
Procurement, logistics, and compliance staff should understand what modern slavery looks like in a supply chain context, how to spot red flags, and what to do if they identify a concern. The Home Office guidance specifically calls out training as a reporting area — a statement that says “we trained our staff” without detail will not impress. Effective training should be role-specific: procurement teams need to know what questions to ask suppliers and what contractual protections to include, while warehouse and logistics staff should be trained to spot indicators of labour exploitation in their day-to-day operations, such as restricted worker movement, withheld passports, or excessive recruitment fees charged to workers. Document who was trained, on what, and when — this is the kind of evidence that turns a generic statement into a credible one.
6. Monitor EU CSDDD Developments
If your business has any EU exposure — direct sales, EU subsidiaries, or EU-based customers — track the CSDDD transposition in relevant Member States. The directive sets minimum requirements; individual countries may go further. France’s Loi de Vigilance and Germany’s Lieferkettensorgfaltspflichtengesetz already impose mandatory due diligence at lower thresholds than the CSDDD.
7. Prepare for the Forced Labour Import Ban
The UK Joint Committee recommended a forced labour import ban, and the government has not ruled it out. Even without UK legislation, the EUFLR will affect any goods you export to the EU. Start documenting your supply chain now so that you can respond to customs inquiries with evidence rather than panic.
Frequently Asked Questions
Does the Modern Slavery Act apply to my business? If your organisation supplies goods or services in the UK and has annual turnover of £36 million or more, you must publish an annual modern slavery statement. Organisations below the threshold are not legally required to do so, but many publish voluntarily because large customers expect it.
What happens if I do not publish a modern slavery statement? The Home Office can seek an injunction through the High Court requiring compliance. Failure to comply with an injunction can result in contempt of court, including unlimited fines. The government has also signalled that non-compliance will inform enforcement priorities and may affect eligibility for public contracts.
Is the EU CSDDD relevant if my company only operates in the UK? Directly, no — unless your EU turnover exceeds €1.5 billion. Indirectly, yes — if you supply goods or services to an EU company in scope, that company will flow due diligence requirements down to you. You may also face competitive pressure if EU-based competitors are seen as more compliant.
When do I need to comply with the CSDDD? The compliance deadline is 26 July 2029, but the supply chain mapping, policy development, and system changes required are substantial. Most affected companies are starting now.
What is the difference between the CSDDD and the EU Forced Labour Regulation? The CSDDD is a due diligence obligation — it requires companies to have systems to identify, prevent, and remediate adverse impacts. The EUFLR is a product ban — it prohibits goods made with forced labour from the EU market regardless of whether the importer has a due diligence system.
Can I use the UK-Australia-Canada joint statement template? Yes. The three governments have published a joint modern slavery statement template allowing businesses to produce a single statement meeting all three jurisdictions’ requirements. If your business operates across these markets, the joint template reduces duplication.