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supply chain compliance

The Corporate Sustainability Due Diligence Directive ("CSDDD") is a game changer for sustainable business in the EU. It requires in-scope companies to conduct far-reaching due diligence with respect to adverse human rights and environmental impacts covering their own operations as well as those of their subsidiaries and their upstream and downstream "chain of activities". Although the directive still needs to be implemented into national law of EU member states (pending), in-scope companies are however well advised to prepare for the new compliance obligations right away. This particularly includes measures to ensure "CSDDD-proof" compliance management system:

  • Scoping business activities: In-scope companies should already start "scoping" their chain of activities. This includes identifying areas where adverse impacts on human rights and/or the environment are likely to occur and are most severe as well as carrying out detailed assessments of individual suppliers.
  • Updating and enhancing compliance management systems: Companies should adopt and regularly update risk-based due diligence policies and integrate due diligence processes within risk management systems and internal controls. In addition, companies should assign clear roles and responsibilities in line with best practice compliance management systems. This also includes monitoring the effectiveness of policies and measures.
  • Implementing tailored compliance documentation: It is of utmost importance to adopt compliance-proof documentation outlining the rules and principles that in-scope companies and subsidiaries must adhere to, such as codes of conduct for subsidiaries and/or business partners. Already existing documents need to be reassessed and potentially adjusted.
  • Preparing business partners for the new obligations of in-scope companies: Preparing business partners of in-scope companies to play an important role in the upcoming due diligence processes is arguably one of the most delicate aspects. For instance, business partners will need to provide information to in-scope companies. This not only presents commercial challenges but also involves navigating through various legal obstacles, necessitating cautious approaches to avoid collision with other laws (e.g. competition law, data protection, etc.). Both in-scope companies and their business partners should therefore know their duties and obligations under the CSDDD as well as the boundaries of other laws.
  • Providing guidance and training: Every successful compliance management system provides for guidance and training of employees. In-scope companies should waste no time in setting up a training programme to create awareness among employees who are in regular contact with suppliers and customers. This includes a "tone from the top" approach that underpins the company's values and ethics.

In addition to advertising clients on the CSDDD, Schoenherr's experts also provide interdisciplinary and full-service capabilities and advise on other supply chain aspects as well. Notably, this includes obligations stemming for national supply chain laws and impacts on companies, for instance the German Supply Chain Act and its impacts on non-German companies and suppliers.

In this tab you can find legal updates regarding the topic of supply chain compliance. Here you can subscribe to our newsletter in order to receive regular legal insights directly into your mailbox.

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newsletter

European Parliament adopts landmark supply chain directive

The European Parliament adopted the Corporate Sustainability Due Diligence Directive (the "CSDDD") on 24 April 2024. This is a landmark piece of legislation that aims to ensure companies contribute to sustainable development by identifying, preventing and mitigating potential or actual adverse human rights and environmental impacts in their operations and value chains (see our newsletter of 20 March 2024 for more information). The directive now also needs to be formally endorsed by the Council, signed and published in the EU Official Journal, entering into force twenty days later. Member States must transpose the CSDDD into national law within two years of its entry into force. But companies are well advised to prepare for the new compliance obligations right away.

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newsletter

What does the CSDDD mean for Hungary? Do Hungarian companies need to worry?

Introduction

CSR, CSRD and now CSDDD: so many abbreviations have appeared over the last years in the context of sustainability. Sometimes referred to as the "European Supply Chain Act", CSDDD stands for the "Corporate Sustainability Due Diligence Directive". It is commonly abbreviated as the "CSDDD", "CSDD directive" or "CS3D".

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event

13 June 2024 - 15 June 2024

poland

D.Rutecka

AIJA – Setting sails in turbulent times

13 - 15 June | Malta

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newsletter

19 March 2024

serbia

Z.Šoljaga

North Macedonia's legislative response to unfair trade practices

To address rising prices within its own economy, exacerbated by worldwide economic trends and inflationary pressures, North Macedonia has taken a significant legislative step. On 13 March 2024, the Assembly of North Macedonia adopted the Prohibition of Unfair Trade Practices in the Supply Chain of Agricultural and Food Products Act (the "Unfair Trading Act"). This legislation not only aims to mitigate the impact of these economic challenges but also aligns closely with European Union standards on unfair trading practices.

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newsletter

03 August 2023

hungary

D.Gera Á.Kovács

Major legislative changes in Hungary's pharma and food industry

Significant legal changes occurred in the Hungarian pharmaceutical and food industry in the summer of 2023. According to Government Decree No. 333/2023. (VII. 20.), as of 1 August 2023, the National Public Health Centre (NNK) and the National Institute of Pharmacy and Nutrition (OGYÉI) merged, establishing a new authority, the National Centre for Public Health and Pharmacy (Nemzeti Népegészségügyi és Gyógyszerészeti Központ, NNGYK).

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newsletter

Is the German Supply Chain Due Diligence Act relevant for Czech businesses?

The German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz; "LkSG") is effective from 1 January 2023 for companies and branches based in Germany with more than 3,000 employees, with further extension to companies with more than 1,000 employees from 1 January 2024. Although a German law, the LkSG also affects the business partners of German companies under the scope of the LkSG located beyond the country's borders. As Czech companies are often primarily export-oriented – with Germany being the most important market – many Czech companies are already affected. This number will further increase in 2024.

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publication

Regulation of Significant Market Power in Czech Food Supply Chain in 2023 and Beyond

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publication

The Czech government amends the Significant Market Power Act to extend its application from retail to all levels of the agricultural supply chain

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newsletter

26 February 2023

hungary

A.Turi M.Kovács

HCA uses its powers to uncover roots of record-high food inflation

After the covid-19 pandemic, the EU economy is now being disrupted by the Russia-Ukraine conflict. The rising energy prices and disrupted supply chains have resulted in a further increase in inflation. According to the Hungarian Central Statistics Office, average inflation in Hungary was 24.5% in December 2022, the highest in the European Union. However, inflation of food products was even higher, reaching a staggering 44.8% year-on-year price increase by December 2022. This number is almost three times higher than the EU average.

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newsletter

22 February 2023

czech republic

J.Kupčík

Czech Competition Authority opens food sector inquiry. How to prepare?

The Czech Competition Authority just announced that it will open a fast-track sector inquiry focused on the prices of four basic food items. While the items remain undisclosed, it is generally presumed that the inquiry follows political pressure regarding price increases of items like sugar, flour, butter, bread or milk. The focus of the inquiry will be on margins in all stages of the food supply chain. The Authority aims to identify why price increases in the four food items have even exceeded the latest inflation rates and whether there are unjustified margin increases on any level of the supply chain.

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roadmap

The EC's proposal for an ecodesign regulation

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newsletter

10 January 2023

austria

C.Haid J.Frank

The German Supply Chain Act: additional compliance measures required?

The German Supply Chain Act (Lieferkettensorgfaltspflichtengesetz; "LkSG"), which applies to companies seated in Germany or operating a German branch with 3,000 or more employees, entered into force on 1 January 2023.

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newsletter

02 December 2022

czech republic

J.Kupčík

A significant amendment to the Czech Significant Market Power Act

An amendment to the Czech Significant Market Power Act (the "SMP Act"), which should harmonise Czech law with the EU directive on unfair business practices (the "Directive"), was recently signed by the President and will become effective as of 1 January 2023.

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newsletter

23 November 2022

romania

A.Damaschin

Factoring and liquidity facilities: making the best of both worlds

Factoring volumes in Romania have seen a marked increase over the last year, up to EUR 3.68bln in the first half of 2022, according to public sources. While part of this 31.6 % year-on-year surge was driven by inflation rates, local businesses do appear to show a growing appetite for this type of financing product.

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newsletter

UTP Directive implemented in Romania: new rules to be applied by retailers and suppliers

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newsletter

23 February 2022

croatia

A.Mihaljević*

Revised UTPs Act in Croatia becomes fully applicable in March. Have you aligned your agreements with suppliers?

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newsletter

09 February 2022

hungary

A.Turi M.Kovács

Hungary: Competition authority publishes results of accelerated sectoral inquiry into COVID rapid tests market in Hungary – resulting in instant changes to the market

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roadmap

Liability management: Intellectual property rights-related recourse claims

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press release

Austria: Schoenherr advises on the sale of Czipin Produktivitätssteigerungs-GmbH to ROI-EFESO

Schoenherr advised Czipin Privatstiftung and Alois Czipin on the sale of all shares (100 %) in Czipin Produktivitätssteigerungs-GmbH (CZIPIN) to EFESO Consulting France SAS. CZIPIN will thus become a part of the global consulting specialist ROI-EFESO. The signing took place on 24 June. The closing of the transaction is subject to merger control clearance. 

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newsletter

21 April 2021

F.Terharen

Facial recognition – Austrian regulations v European approach?

Over the last couple of years, more and more countries have deployed technologies that allow them to match digital images of a person (e.g. from a surveillance camera) against a database of pictures.

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newsletter

Croatian Competition Agency penalises tangerine reseller for unfair trade practices

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newsletter

27 December 2020

hungary

A.Turi

Hungary: Spar Will Create Opportunities for Local Small Producers as a Redress for Abuse of Significant Market Power – a Unique Way to Avoid Fine

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newsletter

13 December 2020

slovenia

M.Frantar M.Osojnik

Know Your Supply Chain: Proposal for EU-wide Mandatory Due Diligence Legislation

Supply chains have been in focus throughout 2020, and not only thanks to COVID-19. Earlier this year, the European Commissioner for Justice, Didier Reynders, announced that in 2021 the Commission would propose legislation on mandatory corporate due diligence covering human rights and environmental risks across a business's supply chain.

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newsletter

The Unfair Competition Law is changing: new focus on companies with superior bargaining position l Romania

A draft Emergency Government Ordinance recently published on the Romanian Competition Council's (RCC) website sets the stage for several significant changes to Law 11/1991 (the Unfair Competition Law).

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roadmap

cee overview - eu & competition

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newsletter

05 April 2018

poland

P.Kułak

Poland: Competition authority's first decision on unfair use of contractual advantage in food sector

In July 2017 the Act on Counteracting the Unfair Use of Contractual Advantage in Trade of Agricultural and Food Products entered into force. The act aims to protect small farmers and grocery suppliers against the abuse of power by large supermarkets and chain stores.

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newsletter

07 March 2018

croatia

C.Haid

Croatia: New unfair trading act

Over the past few years, European and national institutions have warned about the negative effects of unfair trading practices in the supply chain. 

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roadmap

Romania: Is Romania's Attempt to Protect and Support Local Products Legal?

The adoption of two Romanian laws that envisage the promotion of national products sparked intense debates over their practical consequences.

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With the formal adoption of the Corporate Sustainability Due Diligence Directive (the "CSDDD") by the European Parliament, Schoenherr is proud to announce the official promotion of a dedicated team of experts. This team is committed to assisting clients in preparing, implementing and complying with the new supply chain obligations, thereby minimising the risks of pecuniary penalties. It possesses extensive legal expertise and serves as the primary point of contact for clients regarding all inquiries concerning the CSDDD, its implications on international companies, and their obligations under the directive. Our goal is to deliver straight-to-the-point, tailored and efficient advice for these cross-border activities, alleviating the regulatory burden imposed by the new law on companies. In addition to advising clients on the CSDDD, Schoenherr´s experts also provide interdisciplinary and full-service capabilities and advise on other supply chain aspects as well. Notably, this includes obligations stemming for national supply chain laws and impacts on companies, for instance the German Supply Chain Act and its impacts on non-German companies and suppliers. For further information or specific inquiries, please do not hesitate to contact the supply chain experts.

  • Due diligence policy development
  • Creating new or updating existing compliance management systems
  • Identification and assessment of adverse impacts
  • Prevention and mitigation plans
  • Remediation plans
  • Stakeholder engagement
  • Complaints procedure and notification mechanism
  • Monitoring and reporting
  • Investigation
  • Training
  • Reaction and litigation

Austria

Johannes
Frank

Counsel

austria vienna

Carina
Fürnkranz

Associate

austria vienna

Stefan
Holub

Associate

austria vienna

Balkan

Ana
Mihaljević*

Attorney at Law in cooperation with Schoenherr

croatia

Petar
Vučinić

Attorney at Law

montenegro

Ksenija
Šourek*

Attorney at Law | Vlahov Buhin i Šourek d.o.o. in coop. with Schoenherr

croatia

Bulgaria

Alexandra
Minioti

Junior Associate

bulgaria

Czech

Jan
Kupčík

Attorney at Law

czech republic

Hungary

Gergely
Horváth

Attorney at Law

hungary

Réka
Dobó

Attorney at Law

hungary

Márk
Kovács

Attorney at Law

hungary

Gábor
Pázsitka

Partner

hungary

Bálint
Bodó

Associate

hungary

Poland

Katarzyna
Sulimierska

Partner

poland

Romania

Georgiana
Bădescu

Partner

romania

Cristiana
Manea

Managing Attorney at Law

romania

Sabina
Aionesei

Attorney at Law

romania

Slovakia

Michal
Lučivjanský

Partner

slovakia

Slovenia

Matej
Črnilec

Partner in cooperation with Schoenherr

slovenia