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On 1 January 2023 the German Supply Chain Act went into force for large companies with over 3,000 employees in Germany. Companies covered by the law will need to have measures in place in 2023. This includes conducting a human rights and environmental risk assessment, publishing a policy on the company’s human rights strategy, and establishing a complaints procedure for human rights and environmental risks in the company’s supply chain, including for impacts beyond tier-1 suppliers.

The Act incudes fines for non-compliance of up to eight million euros or up to 2% of annual global turnover for companies with an annual turnover of more than 400 million euros. It also includes a special provision that allows trade unions and NGOs to bring civil cases on behalf of parties that have suffered human rights violations within the scope of the law. We expect to see litigation against companies for human rights impacts.

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