German government published draft bill to remove reporting obligation
- On 2 September, the German government published a draft bill amending the German Supply Chain Due Diligence Act. Previously the government pledged to repeal the Act in its May 2025 coalition agreement. However, instead of a full repeal, the Act reduces the reporting burden and liability during the transition period before the CSDDD is transposed into German law. The proposal also estimates that annual compliance costs for companies will be reduced by around EUR 4.1 million primarily due to the removal of reporting obligations.
- The bill is currently only available in German, our analysis is based on an unofficial translation.
Key proposed changes to the German Supply Chain Due Diligence Act:
- Reporting to BAFA and public disclosures would no longer be required; but companies must still document due diligence internally.
- Fines would be limited to serious breaches related to prevention, remediation, or complaints procedures. Violations related to risk analysis and environmental risks would no longer be fined.
- The law will need to be adopted by Parliament before entering into force. The government has signalled that it is pursuing a fast process on this bill. If approved, the changes will go into effect immediately.
About the German Supply Chain Act
- The German Supply Chain Due Diligence Act was adopted in June 2021 and came into force for companies in January 2023. It imposes a corporate duty on Germany-based companies to establish and implement due diligence processes for human rights and certain environmental violations.
- The Act applies to companies with a registered office or principal place of business in Germany, and to foreign companies with a branch office in Germany. The German Supply Chain Act applies to companies with 3000 employees in Germany, changing to 1000 employees from 2024.