Jump to a specific section:
- Understanding the prohibition
- Due diligence requirements
- Different requirements for different EU actors
- Tracing your products and supply chains
Understanding the prohibition
The Regulation sets clear boundaries for relevant products entering or leaving the EU market. In short, they must be deforestation-free and produced in compliance with the legislation of the country of production.
"Deforestation-free" means no room for products containing, being fed with, or made using commodities from land deforested after 31 December 2020. ‘Deforestation’ is described as the conversion of forest to agricultural use, whether human-induced or not.
For products derived from or containing wood, there is an additional requirement: the wood must have been harvested from the forest without causing forest-degradation after 31 December 2020.
Relying on FAO definitions, the EUDR’s definition of ‘forest degradation’ refers to structural changes to forest cover, taking the form of the conversion of primary forests or naturally regenerating forests into plantation forests or into other wooded land, or the conversion of primary forests into planted forests.
The requirement for compliance of production with relevant legislation of the country of production is defined in terms of 8 categories of legislation, listed below:
- land use rights
- environmental protection
- forest-related regulations including forest management and biodiversity conservation, where directly related to wood harvesting,
- third parties’ rights,
- labour rights,
- human rights protected under international law,
- the principle of free, prior and informed consent, including as set out in the United Nations Declaration on the Rights of Indigenous Peoples,
- tax, anti-corruption, trade and customs regulations
Due diligence requirements
If you are placing relevant commodities or products onto the EU market – or exporting these from the EU, you are considered an Operator. You must implement a due diligence system, the details of which are prescribed in the regulation. This means implementing procedures and measures to avoid that your products come from sources that are not deforestation-free or do not meet the country's laws.
Operators need to gather supply chain information, assess risks of non-compliant supply-chains and take necessary actions to mitigate any identified risks of sourcing non-compliant commodities or products.
Risks must be mitigated and products deemed to be negligible risk in relation to their not being deforestation-free or legally non-compliant, before placing these on the EU market or exporting these from the EU. Operators must also publicly report their due diligence efforts each year.
Country Benchmarks and Simplified due diligence requirements
The European Commission will establish a centralised database of country risk assessments ('country benchmarks' as per the regulation) to streamline due diligence and enforcement. Countries will be categorised as low, standard, or high risk based on their association with deforestation.
Operators sourcing from 'low-risk' countries will be able to enjoy a more simplified 'due diligence' process, but they still need to carefully assess their supply chains for potential risks of mixing with products which are not in conformance with the regulation.
Enforcement efforts will be tailored to match the risk levels also, with increased monitoring by Competent Authorities for high-risk countries and a lighter approach for low-risk ones.
Using certification schemes to meet due diligence requirements
The EUDR recognises that certification or other third party verified schemes represent best practice in the forestry and agricultural sectors. It considers that they have a place - and can be used - in risk assessment or mitigation processes.
However, the regulation is also clear that they should not substitute the operator’s responsibility regarding due diligence. Certification schemes need to be evaluated to assess their coverage, credibility and ability to provide assurance of mitigated risks.
Different requirements for different EU actors
Depending on the size of your business and the nature of your operations, your responsibilities may differ from Operators which are importers or exporters as described above:
Domestic Operators
Domestic Operators are those placing relevant products onto the EU market that have already been produced (e.g., cattle or soy) or harvested (wood) within the EU.
In the case of wood products, the Operator is the entity harvest standing timber growing within the EU (independently of whether it is conducting this work itself or outsourcing the harvesting activity to others) and making the wood available on the EU market. For cattle and soy, the Operator is the entity selling the products onto the EU market for the first time.
While Domestic Operators do not have supply-chains as such, they must still conduct due diligence on their own operations to ensure their products are deforestation-free and meet the country’s laws.
Downstream Operators
Downstream Operators are manufacturers already based within the EU itself, but placing new products on the EU market for the first time:
- Micro, small and medium-sized enterprise (SME) Downstream Operators do not have to exercise due diligence for relevant products that have already been subject to due diligence and where due diligence statements have already been submitted. They must receive previous due diligence statement reference numbers and must make these available on demand.
- Non-SME Downstream Operators must first ‘ascertain’ that the due diligence relating to the relevant products previously subject to due diligence, was properly exercised. If so, they may then refer to due diligence statements that have already been submitted. They shall include the reference numbers of such due diligence statements that have already been submitted in the due diligence statements that they submit.
Traders
Traders are defined as those entities which supply (buy and sell) products already placed on the EU market, for distribution, further processing or consumption. SME Traders must store and share supply chain data with downstream entities and national authorities on request.
However, Non-SME (Large) Traders also meet the same obligations as Non-SME Downstream Operators. This is due to their big influence in supply chains.
Categories of undertakings*: must not exceed the limits of at least two of the three following criteria (large undertakings must exceed the limits of at least two):
Micro-undertakings:
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Small undertakings:
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Medium-sized undertakings:
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Large undertakings:
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* Article 3 of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings.
Learn more about your obligations under the EUDR:
- Access our scoping tool
- Overview of obligations (Coming soon)
Tracing your products and supply chains
Operators and Non-SME Traders need to gather detailed information and data to be able to demonstrate that their products are deforestation-free and produced in accordance with the legislation of the country of production.
That means knowing exactly where your commodities or products come from – including the geolocation coordinates of all plots of land where they were produced, or harvested in the case of wood and raised in the case of cattle.
For smaller plots, a single latitudinal and longitudinal point will be sufficient. But for plots over 4ha in size, you will need sufficient latitudinal and longitudinal points to describe each plot's perimeter.
A comprehensive central Information System is being developed by the European Commission to efficiently manage Operators' due diligence statements and customs clearance applications, ensuring transparency and ease of compliance.