EU introduces strict supply chain law

Since the European Parliament agreed on an EU supply chain law last week, a. hartrodt's customers have been concerned. In order to protect human rights and the environment, the EU is planning to introduce far-reaching reporting obligations for companies with more than 500 employees and a global net turnover of 150 million euros. Small and medium-sized enterprises (SMEs) fear that this could be passed on to them. Jan-Eike Boonstoppel, Air Cargo Security and Customs Officer at a. hartrodt Germany, advises: "Even companies that are not directly affected should be aware of the new obligations and responsibilities." The EU directive is to be adopted by the end of the year.

Germany: Supply Chain Act takes effect in 2024 for over 1,000 employees

The German Act on Corporate Due Diligence Obligations in Supply Chains (Lieferkettensorgfaltspflichtengesetz, LkSG), which previously covered companies with more than 3,000 employees, will apply to companies with more than 1,000 employees from January 1, 2024 and will have to be adapted to EU requirements in the future. Although a. hartrodt is not directly affected, "we provide information in connection with transportation should this be required by the risk analysis of the obligated parties", says Jan-Eike Boonstoppel. For a. hartrodt, he states: "We carry out interface controls – from 2024 with our new Advanced Tracking System". For details on the LkSG, he refers to the Federal Office of Economics and Export Control or the Chambers of Industry and Commerce.

Products may disappear from the European market

According to Jan-Eike Boonstoppel, the fact that Germany has forged ahead with the LkSG makes the purchase of certain goods unattractive. Customers complain to him about the high administrative burden, which will also apply throughout the EU in future. According to him, many countries and trading partners can only comply with the countless regulations with too much effort. The consequence: "Certain products will disappear from the European market because the conditions of origin are difficult to prove." As an example, he mentions coffee from small farmers' cooperatives in South America, where not every bean can be traced back to the producer: "This may force importers to only source coffee from large plantations in future."

The expert expects that companies will "probably be affected by the stricter EU regulation between 2025 and 2027".