EUDR: what’s the state of play?

        On 29 June 2023, the European Union’s Deforestation Regulation (EUDR) came into force. Companies have eleven months to evaluate the impact of EUDR on their supply chain due diligence before the new obligations apply from 30 December 2024 – small enterprises are allowed a longer adaptation period. The Commission is developing guidelines on issues such as the definition of ‘agricultural use’ certification and sanctioning procedures. In the meantime, existing guidelines on the EU Timber Regulation can be used as a proxy.

To deliver on the legal obligations and prepare a due diligence statement, businesses should: 

• Collect information about the products: the type, trade name, quantity, country of production, contact information of suppliers, and the geolocation of plots of land where the product or parts were produced[1].
• Conduct a risk assessment, taking into consideration the occurrence of forests and indigenous people in the country of production, the prevalence of deforestation or forest degradation, country-specific issues like human rights violations, the complexity of the supply chain, and any history of non-compliance.
• Implement risk-mitigation measures, including seeking additional information from suppliers and conducting independent surveys and/or audits. Large operators need to appoint a compliance officer at management level and establish an audit function to monitor and review internal policies.

        Although there is as yet no public decision on the country benchmarking system, the Commission is in the process of developing the methodology, consulting relevant stakeholders – including third countries – in the process. From the date of implementation, all countries have been designated as having a standard level of risk, which will change when the assessment results are available in the fourth quarter of 2024[2]. The Multi Stakeholder Platform remains the main channel of communication with third countries. The €70-million Team Europe initiative on Deforestation-free Value Chains is seeking inclusive partnerships with producing countries[3].

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[1] These requirements will apply for soy, beef, palm oil, wood, cocoa, coffee, rubber, and their derived products, such as leather, chocolate, furniture, charcoal, printed paper, and palm oil derivatives harvested from 29 June 2023 and traded after 30 December 2024. Timber will be covered by the EU Timber Regulation until 30 December 2024.

[2] The system will categorise countries and regions into high, standard, and low risk. Operators sourcing from high and standard risk regions will be subject to the same diligence obligations, but the former will be subject to enhanced scrutiny from competent authorities.

[3] https://international-partnerships.ec.europa.eu/system/files/2023-12/factsheet-tei-deforestation-free-value-chains-05122023_en.pdf