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European Member States and UK

German Supply Chain Act

LkSG · Germany

In force Last updated 1 June 2026

Plain-language summary

The German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz, or LkSG) was the first major national supply chain due diligence law in Europe, entering into force in January 2023 for companies with 3,000 or more employees and expanding to companies with 1,000 or more employees in January 2024. It requires covered companies to conduct risk analyses, implement preventive and remediation measures, and establish grievance mechanisms across their direct and, to a more limited extent, indirect supply chains.

Unlike the EU CSDDD, which will introduce civil liability, the LkSG operates through administrative enforcement only. The Federal Office for Economic Affairs and Export Control (BAFA) conducts audits, reviews company reports, and can issue fines and public procurement exclusions for non-compliance. As of June 2026, BAFA has issued seven formal enforcement actions, establishing important precedents for how the law will be applied in practice.

For suppliers in the Global South, the practical consequence is a significant increase in documentation requests from German buyers. Suppliers who cannot demonstrate that their operations meet the LkSG risk standards are increasingly at risk of being cut from supply chains. The law does not require perfection, but it does require demonstrated effort, documented processes, and meaningful grievance mechanisms that workers can actually use.

Key obligations

  1. 1

    Annual risk analysis

    Companies must conduct a comprehensive risk analysis of their own operations, direct suppliers, and where there is substantiated knowledge of violations, their indirect supply chains.

  2. 2

    Preventive measures

    Based on the risk analysis, companies must establish preventive measures including supplier codes of conduct, training, and contractual audit rights.

  3. 3

    Grievance mechanism

    Companies must establish an accessible grievance mechanism that can receive complaints about human rights or environmental violations anywhere in their supply chain.

  4. 4

    Remediation when violations occur

    When violations are identified, companies must develop and implement a remediation plan with a clear timeline and measurable outcomes.

  5. 5

    Annual documentation and reporting

    Companies must document their due diligence efforts and publish an annual report on the BAFA platform.

Implementation timeline

June 2021

LkSG enacted

The German Bundestag passed the Lieferkettensorgfaltspflichtengesetz with a two-year implementation period.

January 2023

In force for 3,000+ employee companies

Companies with 3,000 or more employees globally began legal obligations.

January 2024

Extended to 1,000+ employee companies

Scope expanded to companies with 1,000 or more employees globally.

June 2026

Seventh BAFA enforcement action issued

BAFA issued its seventh formal enforcement action under the law, marking a significant escalation in enforcement activity.

Change log

Official sources