The German Federal Office for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle, BAFA) recently certified that the companies subject to the German Act on Corporate Due Diligence Obligations in Supply Chains (LkSG, for basic information see here: The_German_Act_on_Corporate_Due_Diligence_Obligations_in_Supply_Chains_ADVANT_Beiten.pdf) implemented the LkSG (very) well. In addition, it immediately announced effective facilitations. Apart from that, the current addressees of the Act remain obliged to comply with the LkSG for the time being. One reason for this: The general compliance obligation. Apart from that, the question arises as to whether the implementation of the LkSG has also brought benefits for companies, and if so, what benefits?
The BAFA has published its current Statement of Accounts 2024 on the LkSG (as of: October 2025) (BAFA - Overview - Statement of Accounts). In its report on the audits completed in 2024, it states "that most companies take their due diligence obligations under the LkSG extremely seriously and can demonstrate good to very good implementation." The "willingness to cooperate shown by the companies audited in each case" should be particularly emphasised. In 2024, the BAFA therefore initiated administrative fine proceedings only in "a few exceptional cases". However, the BAFA "did not evaluate or review in detail" the companies' reports on the fulfilment of their due diligence obligations pursuant to section 10 (2) LkSG in 2024, insofar as such reports were submitted at all. Background: In spring 2024, the BAFA had announced to review the availability of these annual reports for the first time as of 1 January 2026.
In addition, a reference to "simplifications for companies in the Supply Chain Act" can be found on the website of the BAFA concerning the LkSG (BAFA - Overview) since 1 October 2025. The corresponding draft bill to amend the LkSG (more on this below) has not yet been passed through parliament. Nevertheless, the BAFA already announced that the audit of LkSG reports (already postponed until the beginning of 2026) will be discontinued with immediate effect. Furthermore, due to the lapse of the public interest in prosecution, all administrative offence proceedings relating to fines, which are to be deleted under the current draft bill, are to be discontinued. In view of the small number of administrative fine proceedings initiated to date (see above), this will not affect many companies but will certainly provide relief.
Otherwise, the LkSG remains unchanged for the time being. This applies both to the group of addressees of the LkSG (cf. section 1 LkSG, in brief, companies based in Germany with more than 1,000 employees in Germany) and to the due diligence obligations of the relevant addressees provided for in the LkSG. Amendments in this regard are only expected in connection with the transposition of the European Corporate Sustainability Due Diligence Directive (CSDDD for short) into German law. This will presumably only take place once the revision of the CSDDD, among other things, which was initiated by the omnibus package on sustainability (see our blog post on this Omnibus Package on Sustainability: The Planned Amendments | ADVANT Beiten) has been completed. It is currently becoming apparent in the trialogue negotiations that the provisions of the CSDDD should in future only apply to companies with more than 5,000 employees and a worldwide turnover of more than EUR 1.5 billion. With the announced "seamless replacement" of the LkSG "by a law on international corporate responsibility that transposes the CSDDD into national law", the group of addressees of the Act in Germany is therefore likely to be considerably reduced in future. It is not yet clear exactly when this will happen. After setting a new deadline, the CSDDD is to be transposed into national law as of 26 July 2027 and has to be implemented as of 26 July 2028. Of course, even after such a transposition law came into force, many companies (especially European ones) would still be indirectly affected in their role as suppliers to companies subject to the CSDDD.
The LkSG thus remains applicable law for all previous addressees of the Act for the time being. It would therefore not be a good idea to disregard the LkSG now, even if the majority of the fines are deleted in the near future with the adoption of the LkSG Amendment Act as planned. On the one hand, inadequate fulfilment of the continuing LkSG due diligence obligations (such as refraining from a risk analysis) may trigger one of the remaining fines. On the other hand, and above all, the board of directors or management of the addressees of the LkSG are still (also) obliged to observe the provisions of the LkSG due to their general compliance obligation, irrespective of the deletion of the fines (see our blog post from December 2024 on the question: Why we (in particular the management) need to continue to take the German LkSG seriously and how it (also) relates to the pending implementation of the CSRD | ADVANT Beiten).
Speaking of CSRD: According to the current status of the trialogue negotiations, companies with 1,000 employees and an annual turnover of EUR 450 million are likely to be obliged to submit sustainability reports in the future. In these reports, the respect for human rights in the supply chain, among other things, must also be reported. Although the planned simplification of the CSRD (Corporate Sustainability Reporting Directive) and of the ESRS (European Sustainability Reporting Standards) also promises simplifications in this respect, the basic reporting obligation remains unchanged in this respect. The topic of human rights in the supply chain will therefore not disappear completely from the "mandatory agenda" of most LkSG addressees in the future.
Apart from this, the question arises as to whether the implementation of the LkSG - and thus in particular the establishment of a human rights risk management system - has brought any benefits for the addressees in terms of content, apart from the high administrative costs, which are also due to the many uncertainties of the Act, and if so, what benefits? It would then be an obvious question for the companies that are likely to fall outside the scope of application in the future with the implementation of the CSDDD as to which of these benefits the company can and wants to maintain with reasonable effort - also with a view to the possibly continuing obligation to sustainability reporting in accordance with the CSRD.
In 2024, the BAFA carried out a total of 851 ex officio audits, thereof 638 risk-based controls and 39 occasion-related audits. In addition, there were 314 processes from complaints and suggestions, of which 48 had an LkSG reference.
The focus was in particular on:
This revealed that many companies - particularly in the new size category of 1,000 employees or more - still faced challenges in the organisational separation of implementation and monitoring of human rights risk management and in the barrier-free design of complaints channels.
The occasion-related controls of the BAFA concerned, among other things:
The BAFA names the following other countries affected: China, Germany, Morocco, Serbia, South Africa, Turkey and the USA.
Despite the increased audit activity of the BAFA, the number of sanctions in 2024 remained low:
It was already clear from the coalition agreement between the CDU, CSU and SPD that the "abolition" of the national LkSG announced there under the heading "Bureaucracy reduction" was to take place in two steps: (1) Immediate abolition of the reporting obligation under the LkSG and no sanctioning of the applicable due diligence obligations (with the exception of massive human rights violations), (2) Replacement of the LkSG in the course of implementing the European Corporate Sustainability Due Diligence Directive (CSDDD) with a "law on international corporate responsibility" (cf. Coalition Agreement-2025-1.pdf, there lines 1909 et seq.).
To implement the first step, on 3 September 2025, the German Federal Government presented the "Draft Act to Amend the German Supply Chain Due Diligence Obligations Act - Relieving the burden on companies through application and enforcement-friendly implementation" (see Act Amending the German Supply Chain Due Diligence Obligations Act - BMAS). According to this, the annual reporting obligation pursuant to section 10 (2) LkSG - which had previously been effectively postponed until the end of 2025 by the BAFA's announcement - will no longer apply with retroactive effect from 1 January 2023. In future, only those breaches of duty that the legislator has deemed to be particularly serious under the LkSG will be subject to a fine, i.e.:
Even in these cases, the imposition of fines should be the last resort (cf. RefE, justification for Art. 1 number 6). The provision on increased fines for legal entities in section 24 (3) LkSG is apparently to remain in place - apart from consequential changes to the offences for which fines are imposed.
According to a press release of 26 September 2025, the Federal Ministry for Economic Affairs and Energy (Bundesministerium für Wirtschaft und Energie, BMWE) in coordination with the Federal Ministry of Labour and Social Affairs (Bundesministerium für Arbeit und Soziales, BMAS) has instructed the Federal Office of Economics and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle, BAFA) to "exercise restraint with regard to the Supply Chain Act" (BMWE - Immediate relief for companies - BMWE instructs BAFA to exercise restraint with regard to the Supply Chain Act). This instruction might be the reason for the current information on the website of the BAFA. sein.
Dr. Daniel Walden
Jole Inserra
Dr. André Depping
