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Who is directly covered by the Lieferkettengesetz (German Supply Chain Act)?
By which year – which companies are directly in scope?
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2023: Companies with more than 3,000 employees
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2024: Companies with more than 1,000 employees
It is expected that, within the framework of the EU supply chain law (EU-Lieferkettengesetz / CSDDD), this threshold will gradually be reduced to 250 employees.
But… what does a “small trader” have to do with this law?
Even if your business is not directly covered by the law, you may still be indirectly affected, because you:
1. May become part of a large company’s supply chain
If you act as a supplier for a major company (for example providing coffee, clothing, food ingredients, packaging, etc.), you may be asked to:
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sign an „Erklärung zur Einhaltung von Menschenrechten“ (declaration of compliance with human rights)
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submit evidence on working conditions and environmental protection
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fill in supplier self-assessment questionnaires (Selbstauskunftsbögen)
2. May be subject to indirect external scrutiny
Your B2B partners may include in their contracts:
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obligations and standards that you must comply with
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documentation duties in order to enable their own compliance with the Lieferkettengesetz
What might be required from a small trader?
Item – explanation
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Documentation
Written evidence that your products are not linked to child labour and that they are produced under safe and humane working conditions. -
Commitment
A Verpflichtungserklärung (written declaration of commitment) that you respect human rights and environmental standards. -
Monitoring mechanisms
Providing periodic reports on your own suppliers, or maintaining an internal system to monitor your supply chain. -
Prohibition clauses
Refraining from doing business with suppliers who are suspected of serious violations, such as forced labour or child labour.
Practical examples
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A clothing shop importing goods from Turkey or Bangladesh → large business customers may demand proof that the factories involved respect basic labour standards.
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A specialty chocolate store → may be asked to prove that the cocoa used comes from Fair Trade or comparable responsible sources.
Is a small trader exposed to fines?
As long as your company has fewer than 1,000 employees in Germany, you are not directly obliged by the Lieferkettengesetz and therefore not directly exposed to its fines.
However, in practice:
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major companies may refuse to cooperate with you if you cannot provide sufficient transparency.
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you may lose profitable supply contracts if you cannot demonstrate that your supply chain is free from severe human rights and environmental risks.
How can a small trader prepare?
Measure – why it matters
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Structuring contracts with your suppliers
To allocate responsibilities clearly and pass human-rights and environmental requirements on to your upstream suppliers. -
Obtaining certifications (e.g. Fairtrade, FSC)
To make cooperation with B2B partners easier and to build trust in your products more quickly. -
Understanding the origin of your goods (transparency)
So that you can respond confidently and quickly to any inquiry from a major company or auditor. -
Keeping supplier files and purchase invoices
To have documentation available if needed or requested by a business partner.
Conclusion
The Lieferkettengesetz does not directly oblige small traders, but it does push them towards greater transparency and compliance as soon as they become part of a larger company’s supply chain.
Being prepared early is a competitive advantage, especially if you export or plan to work with major brands.
The editorial team of the website strives to provide accurate information based on thorough research and consultation of multiple sources. Nevertheless, errors may occur or certain details may remain uncertain. Please treat the information in this article as an initial guide and always contact the relevant authorities or professional advisers for binding and up-to-date information.
