The German Supply Chain Act is coming. What do foreign companies have to prepare for?

After heated debates, the German Bundestag passed the "Act on Corporate Due Diligence in Supply Chains" (also known as the "Supply Chain Act" or, more unwieldly, the "Supply Chain Due Diligence Act" (Lieferkettensorgfaltspflichtengesetz, LkSG)) on 11 June 2021. It intends to ensure that companies adequately address human rights and environmental risks within their supply chains and take appropriate countermeasures as well as preventive measures. When the LkSG comes into force on 01.01.2023, companies will have to comply with a number of additional obligations.