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Vote on EU supply chain law postponed at short notice

Just before the finish line, the EU Corporate Sustainability Due Diligence Directive (CSDDD) is being called back to the pits. The anticipated final vote for formal adoption of the regulation by member countries, scheduled for 9 February, has been postponed due to obstruction by Germany and, according to diplomatic sources, Italy. The voting behavior of other countries (e.g., Austria, Sweden, Finland, the Czech Republic, and Estonia) is unclear.

Germany's concerns are directed at the proposed liability rules for companies in the event of infringements in the supply chain, the introduction of extensive responsibilities for environmental damage, which are considered incompatible with the German legal system, and the feared overburdening of small and medium-sized companies (SMEs) by the new directive. In addition, there are concerns about increased bureaucratic burdens that could result from the directive and potentially restrict the international competitiveness of European companies.

For the text to be adopted in the Council (in which the EU member states are represented), a qualified majority (55 per cent - i.e., 15 out of 27 member states, representing at least 65 per cent of the population) would be required in the Committee of EU Ambassadors. It is also possible that the Belgian Council Presidency will not want to push through such a project against the will of a large country such as Germany despite a theoretical majority.

Following the agreement in December, the final draft text of the CSDDD was published on 30 January. The Council vote was scheduled for 9 February but was taken off the agenda at the last-minute following concerns that Germany and Italy would abstain. A new vote is yet to be scheduled in Council, but it will need to be held soon if the CSDDD will be passed under this Parliament. Time is pressing as work on legislation is expected to end soon, with the European Parliament holding its last session in April, ahead of elections in June.

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