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New German Supply Chain Law Expands Forced Labor Crackdown

05/05/23 4 minute read

Ever since the UFLPA went into effect in the United States in 2022, several other countries have followed suit with new forced labor and supply chain regulations. 

Starting this year, Germany’s new Supply Chain Due Diligence Act lays out a host of new requirements for social and environmental standards to be observed by German importers. This new law came as a result of a report that found that 80 percent of midsize-to-large companies in Germany are not doing enough due diligence on their supply chains.

Here’s what you need to know about the Supply Chain Due Diligence Act.

Expanding supply chain transparency

Germany’s Supply Chain Due Diligence Act aims to increase transparency, support human rights, and foster legal certainty and fair competition. It does this by requiring companies to vet their suppliers for any signs of these violations:

  • Child labor, forced labor, other forms of slavery
  • Disregard of workplace safety standards
  • Denial of a decent wage
  • Contamination of soil, water, and air, as well as noise pollution and excessive water consumption
  • Manufacturing of mercury-added products, use of mercury and mercury compounds, and treatment of mercury waste
  • Production and use of persistent organic pollutants 

Starting in 2023, these new supply chain regulations will apply to all companies based in Germany or German-registered foreign companies with more than 3,000 employees. In 2024, that threshold lowers to include companies with more than 1,000 employees for all German companies or German-registered foreign companies. 

Completing effective supply chain assessments

To comply with the new Supply Chain Due Diligence law, importers can leverage a commercial risk intelligence platform, such as Sayari Graph to help them meet these requirements. The platform leverages global public records and graph technology to pre-compute complex, cross-border corporate networks, thus providing a clearer picture of supply chains. This comprehensive view provides importers with broader context surrounding their partners and counterparties. Regulators, such as CBP, rely on Sayari Graph data for their forced labor investigations in the United States. With global data from companies from over 250 jurisdictions, German companies can have access to the same database.

>> Learn how to enhance your supply chain audit with Chinese public records <<

Additionally, Sayari includes features that specifically support supply chain and forced labor investigative effectiveness like:

  • Precomputed forced labor risk indicators and a suite of graph analytics tools to empower import control teams to quickly and confidently identify forced labor within their sub-tier supplier networks. 
  • DHS CBP UFLPA entity lists enriched with 5,000 previously unidentified subsidiaries, joint ventures, branches, and affiliates.
  • Profiles on 1.6 million corporate entities geolocated in the Xinjiang province as well as 91 million Chinese companies, continuously updated to ensure you’re working with current information.
  • Embedded translation and transliteration tools

To see exactly how Sayari Graph can support your supply chain due diligence efforts, watch our in-house analysts perform an example investigation to mitigate the risk of Xinjiang forced labor in global supply chains.

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