Information on the Supply Chain Act

The Act on Corporate Due Diligence Obligations in Supply Chains (Lieferkettensorgfaltspflichtengesetz, LkSG) requires companies to conduct appropriate human rights and certain environmental due diligence in their supply chains. The Act applies from January 1, 2023 for companies in Germany with at least 3,000 employees. From January 1, 2024, companies in Germany with at least 1,000 employees will be affected. The due diligence obligations for companies include:

1. Establishing a risk management system
2. Designating a responsible person or persons within the company
3. Conducting regular risk analyses and issuing a policy statement
4. Laying down preventive measures
5. Taking remedial action and establishing a complaints procedure
6. Documenting and reporting

The Federal Office for Economic Affairs and Export Control (BAFA) implements the Supply Chain Act and monitors whether the companies concerned are adequately fulfilling their due diligence obligations. In order to support companies in implementing their due diligence obligations, BAFA develops and publishes Guidance on a regular basis.

Further information and FAQs in English

Further information on the Supply Chain Act can be found on the website of the Federal Ministry of Labour and Social Affairs. The website contains, inter alia, a list of Frequently Asked Questions concerning the Supply Chain Act.

Guidance on core elements of the Supply Chain Act

All guidance (risk analysis, complaint procedure, appropriateness and effectiveness and the reporting questionnaire) will be translated into English, French and Spanish. The translated guidance will be published soon.

The Guidance on the risk analysis can be found here:

In English