# Supply Chain Liability

Source: https://contracko.com/clause-library/supply-chain-liability

# Supply Chain Liability

Addresses a contractor's statutory liability for unpaid wages and taxes elsewhere in the chain.

## What it is

Supply chain liability (ketenaansprakelijkheid) is a Dutch statutory regime, mainly in construction and temporary labour, under which a principal or contractor can be held liable for wages, payroll taxes and social premiums that a subcontractor or staffing agency lower in the chain fails to pay.

## Why it matters

A contractor can be left paying for another firm's defaults, sometimes years later. Contract clauses cannot remove the statutory liability, but they can manage it through warranties, withholding (g-rekening), certification and indemnities.

## How to apply it

- Require subcontractors to be certified (e.g. SNA/NEN 4400) and properly registered.
- Use a blocked account (g-rekening) to reserve the wage-tax and premium portion.
- Take warranties and indemnities for unpaid wages and taxes down the chain.
- Keep a clear administration of hours, identities and payments to limit exposure.

## Negotiation tips

- • Principals should make certification and g-rekening use a condition of engaging a subcontractor.
- • Remember a contractual indemnity does not affect the statutory claim by the authorities or workers.

## Common pitfalls

- • Assuming a contract can exclude statutory chain liability. It cannot.
- • Engaging uncertified subcontractors and keeping poor records of who did the work.

### How Contracko helps

Contracko stores subcontracts alongside their certification status and g-rekening details, giving you a single view of which subcontractors are compliant at any point during a project. Its AI analysis extracts the indemnification and withholding provisions from each tier of the chain, and reminders alert you when a certification is due for renewal before it lapses mid-project.

## Legal references

- [BW 7:616a Wage chain liability (Act tackling sham arrangements) Dutch law](https://wetten.overheid.nl/BWBR0005290)
- [Invorderingswet 1990, art. 34-35 Tax and social-premium chain liability Dutch law](https://wetten.overheid.nl/BWBR0004770)

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.

## Relevant for

[Construction](https://contracko.com/industries/construction-industry)[Staffing & Recruitment](https://contracko.com/industries/staffing-recruitment)[Logistics & Distribution](https://contracko.com/industries/logistics)[Manufacturing](https://contracko.com/industries/manufacturing)[Engineering & Architecture](https://contracko.com/industries/engineering)

## Related clauses

- [Flow-Down Clause](https://contracko.com/clause-library/flow-down)
- [Subcontracting Clause](https://contracko.com/clause-library/subcontracting)
- [Indemnification Clause](https://contracko.com/clause-library/indemnification)
- [Insurance Obligation Clause](https://contracko.com/clause-library/insurance-obligation)

## Related terms

- [Liability](https://contracko.com/glossary/liability)
- [Indemnity](https://contracko.com/glossary/indemnity)
- [Breach of contract](https://contracko.com/glossary/breach-of-contract)

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## Frequently asked questions

Common questions about this clause.

- **Q:** Can a contract clause remove chain liability?
  **A:** No. It is a statutory liability owed to the authorities and workers; clauses can only manage and reallocate the risk between the parties.

- **Q:** How does a g-rekening reduce exposure?
  **A:** Paying the wage-tax and premium portion into a blocked account gives the principal protection (vrijwaring) for that amount against the tax authority.

- **Q:** Which sectors are most exposed to supply chain liability in the Netherlands?
  **A:** Construction, temporary labour staffing, and logistics are the classic sectors. The rules under BW 7:616a and the Invorderingswet were designed primarily with these industries in mind.

- **Q:** What certifications reduce ketenaansprakelijkheid risk?
  **A:** SNA certification (NEN 4400-1 for domestic, NEN 4400-2 for foreign firms) is the recognised standard in the temporary-labour and construction sectors. It demonstrates proper payroll administration and tax payment, which reduces the principal's exposure.

- **Q:** How far down the chain does statutory liability reach?
  **A:** In principle across all tiers. A main contractor can be held liable for defaults of sub-subcontractors, which is why certification and g-rekening requirements must be passed down at every level.

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