EU: Council Vote On Supply Chain Law Postponed Amid German Abstention

Niels Timmermans, spox for the Coreper group of permanent representatives to the EU posts on X 'Practical information from the Coreper I. The item of the Corporate Sustainability Due Diligence Directive (CSDDD) has been taken off today's agenda & will be rescheduled to a date yet to be announced.' As we noted earlier (see 0941GMT bullet), the vote on the CSDDD - which would look to ensure EU environmental, social, and labour standards are met in supply chains feeding into the Union - was not assured of progress. Germany had already indicated its abstention amid disagreements within the country's governing coaltion, while other member states including Finland, Sweden, Estonia, Lithuania, and Croatia were also believed to be wavering.

• Italy had been viewed as the crucial deciding member state, and the decision to postpone the vote could be an indication that Rome's ambassador to the EU was set to vote against/abstain with the EU more inclined to push back the decision to allow for further talks rather than vote it down.
• The passage of the CSDDD could have notable impacts on EU supply and value chains, with "companies found to have failed to implement their due diligence procedures could face fines of up to five percent of their global turnover." Carve-outs had already been achieved, as a "compromise deal excludes the core business of financial actors, including their investment and lending activities, from the scope of the law." The focus of the legislation is on 'high-risk' industries such as textiles, agriculture, and minerals.