38 2025 TSMA within the supply chain. The categories of potential and actual risks have to be prioritized and carefully evaluated; (3) Companies are also required to appoint a special human rights officer, respectively at least identify a person, who is in charge of ensuring that an affected company acts in compliance with all these requirements and obligations; (4) To further increase the administrative burden, if not to say the red tape, which is inevitably the consequence of the German Supply Chain Act, companies are obliged to come up with a senior management policy statement. (5) Moreover, companies must issue a policy statement by the company’s senior management which sets out the procedure for fulfilling the due diligence obligations under the GSCDDA and lists the risks identified after having carried out the risk analysis same as as the human rights-related and environment-related expectations the company has imposed on its employees and suppliers; (6) Once a company has identified a risk as a result of its risk analysis, it is obliged to initiate without hesitating adequate measures not only on its own corporate level, but also towards its direct suppliers; (7) A company which identified an imminent or an actual risk cannot just sit still, but has to become proactive with concrete measures also at the level of its direct suppliers, yet a termination of a contractual relationship with such suppliers remains the last resort if no less severe actions and remedies are available; (8) Moreover, a company is obliged to establish an efficient internal complaint procedure or participate in an external procedure to obtain reports on human rights-related and environment-related risks; (9) Vis-à-vis indirect suppliers a company has somewhat less strict monitoring and due diligence obligations, but nevertheless cannot simply close its eyes and do nothing at this Tier two, Tier three or even additional subcontractor layers; 1.1.7 The GSCDDA also stipulates that the companies concerned need to prepare an annual report, which they must electronically submit within a time period of four months after the end of the respective financial year to the German Federal Office for Economic Affairs and Export Control (“BAFA”) and that any such doc-
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