This briefing is the seventh and last in a series on the Corporate Sustainability Due Diligence Directive (CSDDD), where BLOMSTEIN addresses the key aspects that (in)directly affect businesses both within and outside the EU, explores its interplay with the existing legislation in Germany (LkSG) and examines interactions with other recently adopted EU legislation (e.g., EUDR and CSRD) which partially set overlapping obligations.

In today’s briefing, we examine the key considerations with respect to the EU’s corporate sustainability package for companies operating outside the EU but that have business ties in the EU. Specifically, we will address the direct and indirect impacts for non-EU companies of the Corporate Sustainability Due Diligence Directive (CSDDD) and other related regulations mentioned along the series, including the EU Deforestation Regulation (EUDR), the Corporate Sustainability Reporting Directive (CSRD), as well as the upcoming Forced Labour Regulation and Green Claims Directive .

In the world of high-stakes mergers and acquisitions, even the best-laid plans can falter. Just ask Illumina and GRAIL, who recently found themselves at the center of an unprecedented European Commission fine—EUR 432 million, no less—for allegedly “jumping the gun.” While the Commission decision was later annulled by the European Court of Justice (CJEU) on jurisdictional grounds, the case underscores a critical lesson for businesses: the risks of prematurely implementing a transaction before securing the necessary clearances are all too real. As companies venture into the German market, navigating both merger control and foreign direct investment (FDI) rules becomes even more complex. Knowing where to draw the line between preparation and premature action is essential. The stakes are high, and compliance with these frameworks is crucial to avoid costly penalties and safeguard the successful completion of M&A transactions.

Over the summer, not only the EU has tightened its sanctions against Russia and Belarus (see our previous briefings here and here). The US has also imposed additional restrictions with a particular focus on certain hardware, software, and services (see, e.g., here and here). However, many of these new US restrictions have been part of the EU sanctions in one form or another for some time now. Still, it is often overlooked that these restrictions have a significant impact on IT and software products and can affect business relationships with customers outside of Russia and Belarus.

Belarus has supported its close ally Russia in its invasion of Ukraine from the outset. In response, the European Union (EU) imposed a first set of sanctions against Belarus as early as February 2022 - under the long-standing sanctions regime established in 2006 - and has regularly expanded the scope of restrictive measures against the country over the past two years. While some restrictions were already aligned with the Russia sanctions regime, the sanctions against Belarus, which were last amended in August 2023, did not keep pace with the development of the Russia sanctions. Until recently.

Im Juli 2024 veröffentlichte die Bundesregierung ihre sogenannte „Wachstumsinitiative“ mit 49 wirtschaftspolitischen Maßnahmen zur Stärkung der deutschen Wirtschaft. Eine Maßnahme betrifft Vereinfachungen im Umgang mit Berichtspflichten nach dem Gesetz über die unternehmerischen Sorgfaltspflichten zur Vermeidung von Menschenrechtsverletzungen in Lieferketten (LkSG).

Das LkSG ist seit dem 1. Januar 2023 in Kraft. Mit Beginn dieses Jahres wurde der Anwendungsbereich nochmals erweitert – erfasst sind nun alle Unternehmen mit mehr als 1.000 Beschäftigten. Wie weit die einzelnen Anforderungen an die Sicherung von Menschen- und Umweltrechten in den Lieferketten reichen und wie diese effektiv und rechtssicher umgesetzt werden können, stellt betroffene Unternehmen in der Praxis regelmäßig vor Herausforderungen.  

In unserem letzten Briefing zum LkSG haben wir praktische Fragen rund um die für Unternehmen im Anwendungsbereich des LkSG verpflichtende Risikoanalyse dargestellt. In diesem Briefing geben wir ein Update zu den Berichtspflichten vor dem Hintergrund der von der Bundesregierung kürzlich angekündigten vorübergehenden Entschärfungen.  

Companies from Western countries increasingly find that their (sanctioned) contractual partners from Russia are trying to circumvent arbitration clauses by resorting to Russian courts. In an order of 1 June 2023 (12 SchH 5/22), the Kammergericht (i.e., the Higher Regional Court of Berlin) shed light on topics surrounding these issues, affirming the admissibility of arbitral proceedings even though the Russian company had already lodged a claim in Russia. In addition, the Kammergericht provided clarifications on the service of legal documents when Russian authorities refuse to serve documents under international conventions. Important conclusions can be drawn from this decision for future proceedings, both for procedural and substantive issues.

The German Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung – AWV) establishes rules, in particular, concerning the export of weapons, armaments and goods that can be used for both civilian and military purposes (so-called dual-use items). An amendment of these national export control regulations, the 21st Ordinance amending the AWV, was adopted by the German federal government on 17 July 2024 and will enter into force shortly. Its key content is the expansion of the national dual-use items list, subjecting certain emerging technologies to unilateral export controls. Below, we provide a brief overview of the planned changes and put them into context.

As in the previous Series A 2021 and Series B 2023 financing rounds, BLOMSTEIN also supported the DeepTech company Helsing in its EUR 450 million Series C financing round with regard to foreign direct investment control law.

The 14th package of EU sanctions against Russia, aimed at further increasing economic pressure and tackling sanctions circumvention in response to Russia's continued aggression towards Ukraine, entered into force on 24 June 2024. The new amendments to Regulation (EU) No 833/2014 can be found in Regulation (EU) 2024/1745. In this briefing, we outline the most significant changes.

This briefing is the fifth in a series on the Corporate Sustainability Due Diligence Directive (CSDDD), where BLOMSTEIN addresses the key aspects that (in)directly affect businesses both within and outside the EU, explores its interplay with the existing legislation in Germany (LkSG) and examines interactions with other recently adopted EU legislation (e.g., EUDR and CSRD) which partially set overlapping obligations.

In today’s briefing we explore the main points of convergence and differences between the CSDDD and the upcoming Forced Labour Regulation. We will particularly focus on how these acts complement each other in the pursuit of ensuring corporate responsibility to eradicate forced labour within their value chains.