The information contained in this document is marketing material and for informational purposes only. The information contained in this document is presented without any warranty or representation as to its accuracy or completeness and all implied representations or warranties of any kind are hereby disclaimed. Recipients of this document, whether clients or otherwise, should not act or refrain from acting on the basis of any information included in this document without seeking appropriate professional advice. The provision of the information contained in this document does not establish any express or implied duty or obligation between Citco and any recipient and neither Citco nor any of its shareholders, members, directors, principals or personnel shall be responsible or liable for results arising from the use or reliance of the information contained in this document including, without limitation, any loss (whether direct, indirect, in contract, tort or otherwise) arising from any decision made or action taken by any party in reliance upon the information contained in this document. © The Citco Group Limited, December 2023.
Germany implements Due Diligence Act
On the 16th of July 2021 as part of EU environmental, social and governance (ESG) regulations, Germany implemented the Due Diligence Act, also known as the ‘Supply Chain Act’.
The Regulation comes into force on the 1st of January 2023 and is intended to prevent the violation of international human rights and environmental law breaches.
The law applies to companies and branch offices with over 3,000 employees from 2023 and with over 1,000 employees from the year 2024.
Among the requirements that the companies must meet include:
- the adoption of the policy of corporate human rights strategy;
- the performance of risk analyses;
- anchoring of preventive measures; and
- the establishment of complaints procedure, documentation, and reporting requirements.
Should the Federal Office of Economics and Export Control identify an absence of enforcement or non-fulfillment of the prerequisites, there is a risk of receiving a penalty of up to EUR 50,000 in administrative proceedings. For human rights violations or a failure to set up complaints procedures or preventative measures, there is a penalty of up to €8million with a possibility of exclusion from government procurement for up to 3 years.