Initially applicable to German companies with at least 3,000 employees, the law expanded its reach in January 2024 to include companies with 1,000 or more employees. While the law doesn’t directly impose obligations on Serbian companies or enable enforcement of sanctions in Serbia, it significantly impacts Serbian businesses that serve as suppliers to German companies. The law requires German companies to implement comprehensive due diligence obligations, including establishing risk management systems, appointing human rights officers, conducting regular risk analyses, and maintaining documentation and reporting procedures.
To maintain business relationships, Serbian companies working with German partners must align their operations with these requirements. The law covers the entire supply chain, from raw material extraction to end-customer delivery, encompassing direct and indirect suppliers. Though Serbia has ratified the international conventions underlying this law, it hasn’t yet implemented similar due diligence obligations for domestic companies. The legislation marks a shift from voluntary corporate social responsibility to mandatory compliance, reflecting growing awareness of corporate responsibility in preventing human rights violations and environmental damage.
This article is provided by Jelena Stanković Lukić, Partner, and Mirjana Milošević, Senior Associate from JPM & Partners Belgrade office.
