From now on: Less bureaucracy in the supply chain law

The Federal Ministry for Economic Affairs and the Federal Ministry of Labor have determined that the Federal Office for Economic Affairs and Export Control (BAFA) the Supply Chain Due Diligence Act (LkSG) – or in short: Supply Chain Act – should be applied more loosely and more in the interests of the companies. It had already been agreed in the coalition agreement that Bureaucracy at the LkSG significantly to reduceWith the cabinet decision of September 3, 2025, to revise the law, the Federal Government has paved the legal way for this.

For companies this means: The previous Duty, detailed Reports to create, should be completely painted become – namely retroactively! At the same time, nine out of thirteen possible Fine reasons without replacement removed from the law. This eliminates time-consuming documentation for many companies and the risk of fines for minor formal errors. 

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No more reports, ongoing proceedings are discontinued

To relieve the immediately noticeable The BMWi has instructed the BAFA to immediately Company reports no longer to be checked. Already running Fine proceedings to these points set, New ones are no longer opened at all. Penalties remain possible only in very serious cases, for example, when gross human rights violations are involved. Even then, BAFA must provide strict justification for initiating proceedings.

In addition, BAFA will strengthen communication with companies. practical assistance provide support, for example, in implementing measures or in cooperating with different companies. The next step is to replace the existing LkSG with the new EU Due Diligence Directive (CSDDD) to replace – but in such a way that the rules are implemented with as little paperwork as possible. The federal government emphasizes that the burden on craft businesses and other smaller companies should be as minimal as possible.

Background

The German Supply Chain Act has been in force since 2023. Since 2024, companies with at least 1.000 employees the Due diligence obligations in the Supply Chain Act. The Cabinet now wants to abolish the reporting requirements on compliance with due diligence obligations. At the same time, on September 3, 2025, the draft law for the implementation law for the EU Corporate Sustainability Reporting Directive (CSRD) was passed by the Cabinet, which Reporting obligations for the EU Due Diligence Directive (CSDDD). The legislative process at EU level is not yet complete. 

Full Information about the LkSG for SMEs is available from  > Questions and answers catalogue for SMEs of the BAFA.

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