In line with the ongoing trend in Europe, a new legislation that will require companies to conduct supply chain due diligence activities is making news in Germany. It's time to anticipate and get prepared.
Voted on June 9, 2021 by the German Parliament, the 'Supply Chain Due Diligence Act' will apply to German companies and German branches of foreign groups.
The law requires companies to set up processes to monitor their own operations and their supply chain’s compliance with labour, health and safety and environmental legislation, and to conduct risk assessment.
In contrast to current legislations, this law will be accompanied by a legal arsenal that can lead, in addition to fines, to a 3-year ban on any public offer of purchase in Germany.
Although many of the impacted companies are still hoping for a reduction in the constraints introduced by this law, its application is planned for January 2023 and will initially concern all German companies with at least 3,000 employees (then 1,000 employees from January 2024).
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