EU CSDDD (Directive (EU) 2024/1760) Penalties and fines

Member States must lay down rules on penalties, including pecuniary penalties, for infringements of national law adopted under the Directive. Those penalties must be effective, proportionate, and dissuasive.

This means the exact procedural details will differ by Member State after transposition, but the high level structure cannot be purely symbolic.

When pecuniary penalties are imposed, the maximum limit must be not less than 5 percent of the company net worldwide turnover in the financial year preceding the decision to impose the fine. That is a floor for the national maximum cap, not the automatic fine in every case.

For companies in certain parent company categories, the turnover basis must take into account consolidated turnover reported by the ultimate parent company.

Article 27 requires Member States to take account of relevant circumstances when deciding whether to impose penalties and at what level. In practice, that means effort, cooperation, remediation, and prior conduct can matter once national laws are in place.

The operational implication is simple: retain evidence of what the company did, when it did it, and how it responded once concerns were identified.

Member States must ensure that supervisory authority decisions concerning penalties are published, remain publicly available for at least five years, and are sent to the European Network of Supervisory Authorities. That makes penalty exposure a reputational issue as well as a financial one.

Companies should therefore prepare an external communications plan that aligns with the legal response plan.