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European Confederation of International Trading Houses Associations

CITHA

The functions of CITHA are: To keep the urgency of the challenge of free trade development before its member associations; To serve as a coordinating body for companies and individuals engaged in international trade through their national associations; To conduct studies and exchange information on emerging problems in third countries short of convertible currency (counter trade); To support actions and resolutions passed by member associations with respect to regulations affecting exporters' and importers' activities and hampering free trade; To defend international traders' interests worldwide and present their position to national and foreign authorities as well as international bodies and institutions.

Lobbying Activity

Response to Effectively banning products produced, extracted or harvested with forced labour

30 Nov 2022

The European Confederation of International Trading Houses Associations (CITHA) shares the Commission's objective: goods from forced labour have no place on the Union market. Forced labour should not be accepted either inside or outside the European Union. Nevertheless, we are of the opinion that the proposal has weak points and inaccuracies in many respects and threatens to massively overburden European companies. The Commission proposal is another EU human rights legal instrument, such as the Value Chain Directive (CSDD), the Corporate Sustainability Reporting Directive (CSRD) or the Conflict Minerals Regulation. However, there are overlaps between these legal provisions, which result in a bureaucratic multiple burden for companies. Due to the multitude of regulations, the desired harmonisation within the internal market is not achieved. We have major concerns about the timeframe in which the ban is to be implemented. The draft needs to be adapted by the legislator to ensure a smooth implementation. Missing or vague deadlines create the risk that decisions could be delayed for an unacceptably long time. This would also create competition-distorting handling in the member states and could, for example, detain goods indefi-nitely in customs or at the port. The proposed regulation does not include any provision to mitigate the increased cost of compliance for SMEs. Moreover, it does not explicitly give any indication about the size nor the economic resources, thus it introduces uncertainty. Legal certainty requires clear rules and prohibitions. This means that risk indicators must be practicable and unambiguous for economic operators and authorities throughout the internal market and should leave as little room as possible for divergent national interpretations. According to Article 6 (paragraph 4), the practical implementation of a traffic and export ban is the sole responsibility of the companies concerned. This can be very demanding, especially for SMEs. Moreover, a compulsory take out/withdrawal of the market of non-compliant products may be so high in terms of overall turnover of an SME that it might result in the bankruptcy of said SME. Therefore, the responsibility for implementation should lie with the member states. Customs authorities act at the external borders of the EU on the basis of decisions taken by the competent authorities of the Member States. This can be a serious weakness. Companies have repeatedly experienced unfair practices between the different customs authorities of the member countries that lead to competitive disadvantages for companies from other countries. Customs authorities should cooperate with the competent authorities and not in addition to them. By the time businesses have to comply with the Regula-tion, accessibility and data processing should be operational.
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