Who is obliged to apply the German Packaging Act?

The law mainly applies to manufacturers, e-commerce retailers and exporters to Germany who place products delivered to the end customer in commercial packaging. The concept of packaging has a wide scope and includes both outer (cardboard) packaging, filling materials and labels.

The Act imposes obligations on entrepreneurs (including micro-) who produce, supply or receive packaging, pre-packaging products and packaged goods (plastic). This obligation applies not only to transactions between entrepreneurs and individual clients, but also to relations between professional entities.

What changes should Polish entrepreneurs pay special attention to?

The main changes introduced recently include m.in.

• an extended registration obligation for all operators who place packaging filled with goods on the market in and into Germany, including an obligation for final distributors to register service packaging (used in catering and retail to hand over goods to consumers), transport packaging (B2B), delivery packaging, returnable packaging and packaging that contains hazardous substances or poses a risk to the recycling process;
• obliging businesses to collect empty packaging from their customers and inform their customers about the possibility of returning packaging;
• mandatory information on the types of packaging during registration;
• obligation to be subject to a deposit for single-use beverage containers (bottles and cans);
• the possibility of appointing a representative in Germany by Polish entrepreneurs who sell to German end users, who takes over all obligations related to the German Packaging Act; as well as
• new obligations for online marketplace operators and fulfilment service providers, who are also required to register with the LUCID register and obtain a licence for shipping packaging.

What are the consequences for entrepreneurs?

Failure to register with LUCID, lack of license, or false quantitative declarations are considered an administrative offense. Depending on the violation, fines of up to €200,000 can be imposed per violation. In addition, failure to comply with the obligations under the law may also result in a distribution ban in Germany.

What actions should be taken by Polish entrepreneurs selling their goods in Germany and exporting goods from Polish to Germany?

Polish entrepreneurs selling their goods in Germany and sending goods from Polish to Germany should:

• identify your own business transactions and packaging subject to the provisions of the Act,
• carry out waste management in accordance with the relevant regulations
• comply with registration obligations and conclude appropriate agreements,
• comply with legally required reporting processes;
• put in place processes, IT systems and databases to meet the obligations imposed, and
• adapt risk management systems to detect irregularities that may cause breaches of the above obligations.

What is the significance of the second German Supply Chain Due Diligence Act for Polish entrepreneurs who have business contacts with partners from across the Oder?

With the entry into force of this law (German: Lieferkettensorgfaltspflichtengesetz, LkSG), a number of corporate due diligence obligations have been introduced at the national level, which is intended to encourage German companies and their foreign (including Polish) suppliers to ensure sustainable corporate governance in terms of observing and protecting human rights and environmental standards.

As of January 1, 2023, the provisions of the Act apply to German companies that employ at least 3,000 employees. From 1 January 2024, this threshold will be lowered to 1,000 employees. In practice, however, German companies may transfer some of the responsibilities to their Polish contractors. This will happen because, in order to ensure the transparency of their supply chains, German entrepreneurs will turn to their Polish contractors and verify whether they comply with human rights (including labour law) and environmental protection standards.

What are the obligations of companies and their suppliers?

The Act stipulates that companies within the scope of the regulation must comply with the due diligence obligations imposed on them in a "reasonable manner". To this end, the legislator has defined a catalogue of obligations that may also be indirectly applicable to Polish suppliers, and which includes:

• establishing an appropriate internal risk management system;
• conducting regular risk analyses;
• taking preventive measures in the event of identified risks,
• implementation of immediate and appropriate remedies in the event of imminent or already existing infringements of protected legal
• extensive documentation and reporting obligations, which will also be available to the public.

The key obligation imposed on German entrepreneurs and, indirectly, on their foreign (including Polish) suppliers is to carry out a risk analysis aimed at identifying significant threats. Such an analysis of the actual state of affairs should take place, in particular, in the area of suppliers' business activities. The Act does not provide for a specific way to implement these obligations, but guidance on the duty of care is helpful in this context. Importantly, German law does not explicitly oblige Polish suppliers to cooperate in the field of risk analysis. However, the economic relations themselves may give rise to appropriate obligations to cooperate with business partners. For example, German recipients of goods can request an inspection at the premises of Polish suppliers.

If, as part of the risk analysis, the trader identifies any risk to the protected legal interests, he must immediately take appropriate preventive measures. If the contract between the German customer and the Polish supplier contains appropriate contractual provisions regarding the observance and protection of human rights and environmental protection standards, then the Polish supplier is directly obliged to implement appropriate legal solutions. Otherwise, the fact that suppliers support the implementation of preventive measures required by German law is undoubtedly an expression of care for proper economic relations in the supply chain and thus for their own business interest.

If a violation of human rights or environmental obligations has already occurred or is imminent, companies are obliged to take immediate and appropriate corrective action. In the case of such violations by Polish suppliers, which cannot be prevented, terminated or minimized in the foreseeable future, the entrepreneur must develop a concept that will ensure the implementation of the legally desired state. The inclusion of a direct supplier in the implementation of that obligation also depends on whether such an obligation is provided for in the contract. If there is a serious breach of legally protected interests, German law permits (on the basis of a relevant contractual provision) the termination of the contractual relationship with the foreign supplier.