On 1 January 2023, the German Supply Chain Due Diligence Act entered into force imposing certain human rights-related and environment-related due diligence obligations on German companies, as well as foreign companies with German branches, in their supply chains. The Act applies to companies with at least 3,000 employees in Germany, including foreign companies with a branch office in Germany. Starting in 2024, the Act applies to companies with at least 1,000 employees, expanding the scope of the law. Companies must establish appropriate risk management procedures, including conducting an annual risk analysis in their own business area and towards direct suppliers. The Act’s due diligence obligations are based on the UN Guiding Principles115 and provide for a strong regulatory oversight and enforcement.
The German Federal Office for Economic Affairs and Export Control (BAFA) has released guidance on the implementation of the Supply Chain Due Diligence Act as well as answered questions in several FAQs.
Source: The German Federal Office for Economic Affairs and Export Control (BAFA) https://www.bafa.de/DE/Lieferketten/Ueberblick/ueberblick_node.html
