Sustainability:
Immediate Relief for Companies under the Supply Chain Due Diligence Act

The Federal Ministry for Economic Affairs and Energy (BMWE) has instructed the Federal Office for Economic Affairs and Export Control (BAFA) to act with restraint and in a business-friendly manner when applying the Supply Chain Due Diligence Act (LkSG).

Plans to eliminate reporting Requirements and Administrative Offenses

The significant reduction in bureaucracy for the LkSG agreed upon in the coalition agreement is to be implemented with the Federal Cabinet's decision of 3 September 2025, to amend the law. The draft bill provides for the reporting requirement to be eliminated retroactively without replacement. In addition, nine of thirteen administrative offenses are to be abolished.

BAFA discontinues Review of Company Reports and Administrative Offense Proceedings

In order to relieve the burden on companies now, the BMWE, in agreement with the Federal Ministry of Labor and Social Affairs (BMAS), has instructed the BAFA, which is responsible for implementing the LkSG, to discontinue the review of company reports with immediate effect. Insofar as the draft law provides for the deletion of administrative offenses, the BAFA will also discontinue ongoing administrative offense proceedings based on these offenses and will not initiate any new proceedings.

The LkSG is to be replaced by a low-bureaucracy implementation of the European Corporate Sustainability Due Diligence Directive (CSDDD).