Which products and countries?
Annex I of the deforestation regulation contains a list of relevant products and relevant commodities to which the regulation currently applies.
The annex shows that the regulation covers the following relevant commodities: palm oil, soya, cocoa, cattle, coffee, rubber and wood. A number of derived products are also mentioned, such as beef, dehaired hides, rubber (inner) tyres, chocolate, furniture and, for example, leather products.
The regulation applies to all relevant products – listed in the annex – that contain, have been fed with or have been made by using relevant commodities. It is not relevant which origin the product has. The regulation even covers products produced within the European Union.
Who should meet the obligations?
The EUDR applies to all operators who place relevant products on the market or export within the European Union, which are listed in annex I of the Regulation and that contain, have been fed with or have been made using relevant commodities.
The EUDR also applies to all traders who make relevant products available on the market within the European Union, which are listed in annex I of the Regulation and that contain, have been fed or have been made using relevant commodities.
It may
come as a surprise, but operators established outside the European Union do not
have to comply with the obligations set in the deforestation regulation. In
such cases, the first established person in the European Union to make EUDR
products available on the market is considered an operator within the meaning
of the deforestation regulation and has to comply with the regulation.
*This article does not elaborate on the obligations of traders within the European Union.
Which obligations?
Operators must prove through a due diligence statement that EUDR products are deforestation-free. Without such a due diligence statement, operators are not allowed to place the product on the market or export them.
Preparing
a due diligence statement, however, is not just a formality. With the
regulation, operators are forced to carry out due-diligence investigations into
for example the origin of the goods, the geographical location of the land
where the relevant commodity comes and which local legislation must be complied
with.
Based on
this due diligence investigation, market participants must subsequently carry
out a risk assessment, taking into account the risks assigned by the European
Commission to the country or region in question.
As a
follow-up to the investigation – and the risk analysis – the operator is
obliged to prepare a due diligence statement. If this statement shows that the
risk of deforestation is negligible, the products may be placed on the market and/or
exported.
If the due
diligence statement indicates that risks exists, an operator is obliged to take
measures. However, if it is not possible to take additional measures, the
operator cannot place the products on the market or export them.
Micro,
small and medium-sized enterprises – also referred to as SME operators – are
incidentally subject to a number of exceptions to the obligations under the
regulation. We will publish a separate article on these exceptions in the near
future.
Applicable from when?
From the date of entry into force of the regulation on 29 June 2023, companies have been given 18 months to implement the obligations in their operations. Specifically, large companies must comply with the obligations under the regulation from 30 December 2024.
Micro, small and medium-sized businesses have been given a longer implementation period. For these group of companies, the obligations will not apply until 30 June 2025.
If you have any questions as a result of this post, or want to know more about the deforestation regulation? Please do not hesitate to get in touch with one of our Specialists.