D – The German Federal Office of Economics and Export Control (BAFA) published an updated version of the “FAQ for the Supply Chain Act” on October 25, 2024. Among others, the update affects the reporting obligation on exercising due diligence and provides companies with a significant period of extra time.
According to the revised version, the BAFA will not monitor the submission and publication of the reports before January 1, 2026. Originally the affected companies, particularly those with more than 3,000 employees, had to present their reports after the fiscal year 2023 already. For companies with over 1,000 employees this obligation applied from the fiscal year 2024 onwards. The BAFA will however not sanction the reports that are submitted by December 31, 2025 and will initially not request any improvements.
In spite of the postponement, the companies are still obliged to observe the legal requirements of the Supply Chain Act. The BAFA points out that the core requirements of the risk management remain unchanged and that sanctions can also be imposed in the case of violations. The reporting obligation itself will however possibly expire if it is legally integrated into the sustainability reporting.
The future development of the Supply Chain Act will be significantly influenced by the European Supply Chain Guideline (CS3D), which is to be transposed into national law by the summer of 2026. This foresees stricter requirements, whereby it initially only affects larger companies and foresees civil liability in the event of violations.
Companies are recommended to make use of the extra time to optimise existing compliance structures, because comprehensive risk management will also be necessary after the European guideline has come into force.
