German Supply Chain Due Diligence Act to Be Amended however Legislative Framework Stays

Client Alert  |  September 4, 2025

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The German Federal Cabinet (the Cabinet) has determined to suggest amendments to the German Supply Chain Due Diligence Act (SCDDA) till the EU Corporate Sustainability Due Diligence Directive (CSDDD) might be transposed into nationwide regulation. The proposal would eradicate reporting duties and exempt a number of due diligence obligations from the scope of administrative fines. Notably, underneath the proposal, the substantive due diligence obligations in addition to the act’s documentation obligations would stay in place.

Following the announcement by the then-newly shaped German authorities in April 2025 to utterly abolish the SCDDA and eradicate reporting obligations in addition to restrict fines to severe human rights violations,[1] the Cabinet agreed on September 3, 2025, to suggest amendments to the SCDDA[2]. The proposed amendments are meant to stay in impact till the CSDDD is transposed into nationwide regulation, which is at the moment required by July 26, 2027.

I.    Proposed Amendments

The proposal strikes the SCDDA’s annual reporting obligations retroactively, which to date required each on-line publication and submission to the competent authority. Until now, solely the overview of experiences by the competent authority (BAFA) had been suspended till the top of 2025.[3] Importantly, underneath the proposed amendments, the regulation’s documentation obligations would stay in place.

In addition, the substantive due diligence obligations would proceed to use. However, a number of obligations are actually proposed to be exempted from the scope of the executive fines, together with the next:

• Procedural obligations, akin to conducting a danger evaluation and figuring out a accountable particular person (Human Rights Officer) for monitoring the danger administration inside corporations
• Reviewing and updating the effectiveness of preventive measures, remedial actions, and the complaints process
• Storage and retention of documentation.

Further, fines for non-compliance with preventive measures and remedial actions would solely apply to human rights dangers, now not to environment-related dangers.

The Cabinet reasoned that solely the extra severe violations ought to stay topic to penalties with the intention to keep away from extreme burdens for in-scope corporations. These would come with the obligation to take preventive measures and remedial actions in opposition to human rights dangers in addition to the duty to ascertain a complaints process.

II.   Next Steps

The Cabinet proposal should nonetheless move by way of the German Parliament (Bundestag) in addition to the Federal Council (Bundesrat).

While the aid from the regulation’s reporting obligations and the elimination of some penalty provisions will surely be welcome for in-scope corporations, it stays to be seen whether or not the Cabinet proposal would really scale back their compliance burden. It needs to be famous that the CSDDD, not less than as issues at the moment stand, is predicted to introduce comparable necessities within the close to future. In addition, there are different regulatory frameworks requiring insights into corporations’ provide chains, such because the EU Deforestation Regulation (EUDR), the U.S. Uyghur Forced Labor Prevention Act (UFLPA), and, as of December 2027, the EU Forced Labor Regulation.

Gibson Dunn will proceed to watch and report on any new developments.

[1] https://www.koalitionsvertrag2025.de/sites/www.koalitionsvertrag2025.de/files/koav_2025.pdf.

[2] https://www.bmas.de/SharedDocs/Downloads/DE/Gesetze/Regierungsentwuerfe/reg-gesetz-zur-aenderung-des-lieferkettensorgfaltspflichtengesetzes.pdf?__blob=publicationFile&v=1.

[3] https://www.bafa.de/DE/Lieferketten/Berichtspflicht/berichtspflicht_node.html.

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The following Gibson Dunn legal professionals ready this replace: Markus Rieder, Carla Baum, Katharina Heinrich, and Marc Kanzler.

Gibson Dunn’s legal professionals can be found to help in addressing any questions you might have concerning these points. Please contact the Gibson Dunn lawyer with whom you often work, any chief or member of the agency’s ESG: Risk, Litigation, & Reporting follow group, or the authors in Munich:

Markus S. Rieder – Co-Chair, Transnational Litigation Group,
(+49 89 189 33 260, mrieder@gibsondunn.com)

Carla Baum (+49 89 189 33 263, cbaum@gibsondunn.com)

Katharina Heinrich (+49 89 189 33 275, kheinrich@gibsondunn.com)

Marc Kanzler (+49 89 189 33 269, mkanzler@gibsondunn.com)

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