<\/p>\n\n\n\n
In a press release of 26 September 2025<\/a><\/strong>, the Federal Ministry for Economic Affairs and Energy (BMWE) announced that, in coordination with the Federal Ministry of Labour and Social Affairs (BMAS), it has instructed the Federal Office for Economic Affairs and Export Control (BAFA) to act with restraint and in a business-friendly manner when applying the Act on Corporate Due Diligence Obligations in Supply Chains (LkSG).<\/p>\n\n\n\n As the basis for this approach, the Ministry refers to the Federal Government’s draft legislation of 3 September 2025<\/a><\/strong>, which adopted amendments to the LkSG in the form of relief for the companies affected by the Act. This draft provides for the reporting obligation currently enshrined in the Act to be abolished, without replacement, and with retroactive effect from 1 January 2023. In addition, nine of the thirteen administrative offence provisions are to be removed. Other obligations under the Act, including documentation requirements and the obligation to establish a risk management system, including risk analyses, will remain in place.<\/p>\n\n\n\n In its press release, the BMWE states that it has instructed BAFA to immediately suspend the review of corporate reports. To the extent the draft legislation provides for the removal of certain fining provisions, BAFA is likewise to discontinue ongoing administrative offence proceedings based on those provisions and to refrain from opening any new proceedings. Going forward, the imposition of fines under the remaining fining provisions will be subject to a high threshold. Fines are to be imposed only in cases of serious violations connected with particularly grave human rights abuses. BAFA is to pursue administrative offence proceedings restrictively, and the existence of the relevant conditions must be demonstrated with particular care.<\/p>\n\n\n\n BAFA has already responded to the instruction from its supervisory authority and, in its own notice dated 1 October 2025, published on its website<\/a><\/strong>, has drawn attention to the amended procedural practice.<\/p>\n\n\n\n As a next step, the LkSG is to be replaced by a low-bureaucracy transposition of the European Corporate Sustainability Due Diligence Directive (CSDDD). The deadline for transposing the CSDDD into national law was extended this year, by Directive (EU) 2025\/794, by one year, to 26 July 2027.<\/p>\n\n\n\n The speed with which the BMWE has proceeded, instructing BAFA to apply measures that have not yet acquired final legislative force, is striking. The Federal Government evidently intends, very quickly, to make good on the commitments set out in its coalition agreement to relieve companies affected by the LkSG of bureaucratic burden.<\/p>\n\n\n\n