Dejan Jasnic · Co-founder & Compliance Lead, Trusty · 20+ years anti-fraud & compliance · ACFE Swiss Chapter Board
As of October 2026, the LkSG is still in force, but it is enforced more lightly than before. Germany’s Supply Chain Due Diligence Act applies to companies with at least 1,000 employees in Germany. Since October 2025, the Federal Office for Economic Affairs and Export Control (BAFA) no longer reviews company reports and, on government instruction, only fines serious violations. A bill to abolish the reporting duty by law has been before the Bundestag since January 2026 but has not been passed. Germany plans to replace the LkSG with a law that transposes the EU’s Corporate Sustainability Due Diligence Directive (CSDDD).
This article sets out what applies as of 25 October 2026, with a source for each status point.
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The LkSG in one paragraph
The Lieferkettensorgfaltspflichtengesetz (LkSG) entered into force on 1 January 2023 for companies that normally employ at least 3,000 employees in Germany, and from 1 January 2024 for companies with at least 1,000. It requires them to exercise due diligence on human rights and certain environmental risks in their own business and their supply chains. Section 3 lists nine duties: a risk management system, clear internal responsibility, regular risk analysis, a policy statement, preventive measures, remedial action, a complaints procedure, duties regarding indirect suppliers, and documentation and reporting. Our guide to LkSG corporate obligations explains each duty.
What changed recently
- 3 September 2025: the federal cabinet adopted a bill to amend the LkSG. It would abolish the reporting obligation, retroactively from 1 January 2023, and limit fines to serious breaches. The labour ministry said the LkSG continues to apply until it is replaced by a law transposing the CSDDD.
- 1 October 2025: BAFA announced that it would stop reviewing company reports with immediate effect and would impose fines only for serious violations linked to particularly grave human rights breaches. This followed an instruction from the economics ministry, coordinated with the labour ministry.
- November 2025: BAFA’s reporting page stated that report review had stopped completely and that reports could no longer be submitted through its portal.
- January 2026: the Bundestag held the first reading of the bill (Drucksache 21/2474) and referred it to the Committee on Labour and Social Affairs.
- July 2026: the coalition committee said Germany will transpose the CSDDD one to one, and announced a law for autumn 2026 limiting scope to companies with at least 5,000 employees and more than €1.5 billion worldwide net turnover.
- As of 25 October 2026: the amending bill is still in committee. It has not been passed or published in the Federal Law Gazette, and we found no government bill for the planned new law.
What still applies today
Until the law changes, the LkSG applies as written. The core duties remain: risk management and risk analysis, the policy statement, preventive and remedial measures, and the complaints procedure. In practice, BAFA has stopped checking reports, but the other duties have not been suspended.
The government bill shows where enforcement will focus. It would keep fines for only four breaches: failing to take preventive measures against human rights risks, failing to take remedial action, failing to draw up or implement a remediation plan, and failing to set up a complaints procedure. The existing fine framework stays: up to €800,000, and up to 2% of average annual turnover for certain breaches by companies with turnover above €400 million. A fine of at least €175,000 can lead to exclusion from public procurement for up to three years.
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The LkSG and the CSDDD
The CSDDD, Directive (EU) 2024/1760, sets EU-wide due diligence rules. It was changed twice before applying. The “stop-the-clock” Directive (EU) 2025/794 of April 2025 postponed its first dates. The Omnibus I Directive (EU) 2026/470 of 24 February 2026 then narrowed the scope, removed the obligation to adopt a climate transition plan and the EU-wide civil liability regime, and set maximum penalties at 3% of net worldwide turnover. Member States must transpose the amended directive by 26 July 2028, and companies must comply from July 2029.
LkSG (today) | CSDDD (after Omnibus I) | |
|---|---|---|
Scope | At least 1,000 employees in Germany | More than 5,000 employees and more than €1.5 billion net worldwide turnover |
Status | In force since 1 January 2023 | Transposition by 26 July 2028, application from July 2029 |
Maximum fine | Up to 2% of average annual turnover for certain breaches (turnover above €400 million) | 3% of net worldwide turnover |
Germany intends to replace the LkSG with a law transposing the CSDDD. Until that law exists, the LkSG remains the legal basis. For a wider comparison, see CSDDD vs EUDR vs national due diligence laws.
What suppliers of German companies should expect
The LkSG applies directly only to large companies, but its duties reach their direct suppliers, including SMEs well below the threshold. Covered companies must take preventive measures towards direct suppliers, which in practice often means:
- Questionnaires on human rights and environmental risks, repeated at regular intervals.
- Codes of conduct to sign, often with contractual assurances.
- Screening against sanctions lists and adverse media, before onboarding and during the relationship.
- Training requests and questions about your own complaints channel.
The planned 5,000-employee threshold and risk-based approach would reduce the number of German companies covered and limit duties towards smaller and indirect suppliers, but nothing has changed in law yet. Our guides on vendor due diligence and supply chain compliance show how to prepare.
How Trusty helps
- Supplier screening. QuickScreen360 checks suppliers and partners against global sanctions, debarment and PEP lists, updated daily, and against human rights, environmental and anti-corruption indicators. AI-filtered adverse media summaries, daily monitoring and alerts follow each supplier, and every check includes source links and exportable evidence.
- Policies and training. The Compliance App shares policies, including a Code of Ethics and Business Conduct, by secure link or QR code, with AI summaries and translations. It delivers online training to employees and business partners, with tracking and certificates.
- Complaints channel. Trusty Whistleblowing provides an anonymous, two-way reporting channel, with supply-chain reporting on the Advanced plan.
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This article is general information, not legal advice. Sources: LkSG (gesetze-im-internet.de); BMAS press release, 3 September 2025; Bundestag Drucksache 21/2474; DIP procedure record; BAFA notice, 1 October 2025; BAFA reporting page; Coalition committee paper, July 2026; Directive (EU) 2025/794; Directive (EU) 2026/470; Council press release, 24 February 2026.
Frequently asked questions
Yes. As of 25 October 2026 the LkSG remains in force. BAFA has stopped reviewing reports and only fines serious violations, but the law itself has not been amended.
Companies that normally employ at least 1,000 employees in Germany. The threshold was 3,000 when the law took effect in 2023 and fell to 1,000 on 1 January 2024.
Yes. Section 8 requires covered companies to set up a complaints procedure. Failing to do so remains a fineable breach under the government's amending bill.
The LkSG is German law in force today for companies with at least 1,000 employees in Germany. The CSDDD is an EU directive that, after Omnibus I, covers companies with more than 5,000 employees and €1.5 billion turnover, must be transposed by 26 July 2028 and applies from July 2029.
Not directly. SMEs below the threshold have no legal duties under the LkSG, but as direct suppliers of covered companies they are often asked to complete questionnaires, sign codes of conduct and show their own processes.
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