As companies worldwide prepare for the European Union Deforestation Regulation (EUDR), many seek clarity on its implications. To assist businesses in navigating the regulation confidently, we've addressed key topics and questions we are frequently hearing from our customers, including:
- obligations for non-EU companies
- roles of various supply chain actors
- managing legacy stock
What are the obligations of non-EU companies under the EUDR?
Non-EU companies are not directly regulated under the EUDR. However, they play a crucial role in enabling compliance for EU-based operators and traders. If your products - such as wood products, soy, palm oil, coffee, cocoa, rubber, or cattle - enter the EU market, your EU customers will rely on you to provide information and evidence for their due diligence process. This includes supplying geolocation data of the origin of relevant commodities, evidence of legal harvesting or production, and assurances of deforestation-free sourcing.
Example below of the obligations of a non-EU entity selling to a customer:
It becomes even more important for non-EU companies who buy in-scope products from EU operators/traders, and sell the goods, whether further processed or not, back into the EU.
In this scenario the customer (or their customer) ‘re-exports’ the goods back and not only will that customer potentially have to conduct full due diligence, you, as the non-EU company, will have to pass on the suppliers’ TRACES reference number and verification number associated with upstream DDS (due diligence statements) for the products to clear customs back into the EU. Please refer to the example below:
In practice, this means non-EU producers and exporters must maintain robust traceability systems, ensure transparency throughout their supply chains, and be prepared to share this information with EU-based buyers who are legally accountable for compliance. Failure to provide the necessary documentation could hinder market access to the EU.
Please refer to the helpful tables on p. 6 & 7 of the latest scenarios from the EU found here.
What’s the difference in obligations when sourcing from low-risk vs. high-risk countries?
FAQ 5.1 confirms that for organisations sourcing from low risk countries, simplified due diligence can be applied. According to Art. 13 of the Regulation, they will still need to collect information in line with Art. 9 and assess the complexity of the supply chain, the risk of circumvention and the risk of mixing the product with products of unknown origin or origin of standard or high risk countries, but they will not be required to assess and mitigate risks (Art. 10 and 11 EUDR) unless the operator obtains or is made aware of any relevant information, including substantiated concerns submitted under Art. 31, that would point to a risk that the relevant products do not comply with the EUDR.
Whilst the country risk classifications are yet to be announced (expected June 2025), the EUDR will employ a risk-based classification system to distinguish between "low-risk," "standard-risk," and "high-risk" countries. This benchmarking is determined by the European Commission based on country-level deforestation rates, governance, and other indicators.
The Competent Authorities will conduct checks based on the risk classification of products - checking 9% of operators making available/placing on the market or exporting products from high risk countries, 3% of volumes from standard risk countries, and 1% from low risk countries.
It's important to note that no country is exempt from the EUDR, including those within the EU. All operators must collect geolocation data and submit due diligence statements, regardless of the risk classification. The difference lies in the intensity and scope of the required checks.
Refer to Article 16 (8-10), and 13 in the Regulatory text here and FAQs 5.1 here.
How should companies handle products produced before 2023?
Due to an extension of the EUDR’s implementation date, the EUTR will now stay in place until 30 December 2025. This change also extends the transition period for older wood-products falling in scope of EUTR: any timber harvested before 29 June 2023 and placed on the EU market after 30 December 2025 can continue to follow EUTR rules until 31 December 2028.
In practice, this means companies must still carry out due diligence under the EUTR for these products - such as confirming legality and traceability. The EU will accept customs declarations (if imported from outside of the EU) to demonstrate goods being placed on the market before June 2023, or if the goods are EU based, documents like felling permits, bills of lading, invoices, etc. will suffice. Geolocation data is not required, and there is no need to submit a Due Diligence Statement (DDS) - you can use an exemption code.
To stay compliant, companies should identify which of their products fall under the EUTR versus the EUDR, keep clear records of harvest dates, and make sure they can show how each item meets the relevant regulation. This will help ensure a smooth transition and avoid compliance issues during this overlapping period.
Refer to page.6 of the official guidance here and 9.1/9.2 of the FAQs here.
How should companies handle products produced during the transition period?
Between June 30 2023 and December 31 2025, we are in the ’transition period’. Any goods placed on the market during this time do not need to comply with EUDR (but do need to comply with EUTR).
If goods are purchased during the transition period, but not placed on the market until after December 30 2025, then they need to be EUDR compliant. This might imply that any purchases you are making now for stock which won’t be sold until 2025 will need to have full EUDR level traceability and risk assessment. It might also mean that any stock you have since June 30 2023 will need to become EUDR compliant if you place it on the market in 2026 - this would especially include any exports you make.
Refer to page.6 of the official guidance here and 9.1/9.2 of the FAQs here.
