Uncertainty remains over German supply chain law requirements

German authorities are yet to bring an enforcement action over the country’s tough supply chain due diligence law. Germany passed the Act on Corporate Due Diligence Obligations in Supply Chains in 2021 and it came into force for businesses with over 3,000 staff in January 2023. Since the start of 2024, the law has also applied to companies with over 1,000 employees – putting some 5,200 organisations within the law’s scope.

Global Investigations Review spoke to German lawyers on the front line of efforts to ensure companies don’t fall afoul of rules that they are eager to follow. “Every company is aware of the importance of the law,” said White & Case partner Julia Sitter. “Therefore, the question from clients has never been: ‘What can I do so that it looks like I comply with the law?’.”

One requirement of the supply chain act is that companies submit an annual supply chain report by completing a questionnaire and publishing the answers online. The first reports for companies with over 1,000 employees are due by January 2025 – the deadline was extended from June 2024 to match the submission date for the European Union’s corporate sustainability reporting directive, which contains similar requirements.

The agency hasn’t issued any guidance on the reporting requirements, but lawyers hope that its responses to the first wave of annual reports could provide some answers. “BAFA will soon start reviewing the reports and it will be quite interesting to see how far they go into the details and do their evaluation,” Sitter said. “Will BAFA tell companies: ‘This is good reporting’ or ‘This is not good reporting?’ Will they come back to companies and ask them for further details?”

The full article is online here (paywall).

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