The European Union Deforestation Regulation (EUDR)
New requirements for companies that market, supply or export relevant commodities and products from the EU.
What is the EU Deforestation Regulation (EUDR)?
Regulation (EU) 2023/1115 of the European Parliament and of the Council on the making available on the Union market and the export from the Union of certain commodities and products associated with deforestation and forest degradation (the Deforestation Regulation), adopted on 31 May 2023, imposes new requirements on companies placing and/or supplying on the EU market or exporting outside the EU relevant commodities such as wood, rubber, cattle, cocoa, coffee, soya and palm oil, or relevant products that have been produced using them, such as tyres, furniture, chocolate, leather, clothing products and accessories made of natural rubber, paper packaging, and pallets (in case it is a separate product, not packaging material used exclusively to support, protect or transport another marketed product) etc. The complete list of relevant products is contained in Annex I of the Regulation.
Which companies will be affected by EUDR and from when?
The EUDR will affect any natural or legal person who, in the course of business, places (imports) the relevant commodities or products listed above on the EU market or supplies the relevant commodities or products to or from the EU market (for distribution, consumption or use). It will therefore concern a large number of entities.
Medium and large enterprises in the Czech Republic will be subject to the new obligations under EUDR from 30 December 2024.
What obligations does the EUDR impose?
According to the EUDR, before placing (importing), supplying or exporting selected products and commodities on the EU market, companies must ensure and demonstrate that their products do not cause deforestation, they are produced in accordance with the legislation of the country of origin and that they have a due diligence statement. The obligations that companies will have to comply with vary depending on whether they place the relevant commodities and products on the EU market (import), export them from the EU or supply them to the EU market. The size of the company will also be a decisive factor in determining the scope of the obligations.
- Operators (large companies and companies importing, placing on the EU market or exporting selected products) must implement a due diligence system and submit a due diligence statement before placing the product on the market (importing) or exporting it.
- Traders (companies in the supply chain that supply these products for distribution, consumption or use on the EU market but are not operators) must obtain and keep information from operators for at least 5 years.
What are the potential sanctions for non-compliance with the EUDR?
In the event of a breach of the Regulation, companies face various sanctions, such as financial penalties (up to 4% of the company's total annual turnover), confiscation of the products concerned, exclusion from public procurement and access to public funding, temporary bans on the marketing of relevant products and commodities, etc.
What we can help you with:
- Analysing your company's product portfolio to determine whether it is covered by the EUDR.
- Training and workshops for employees and management, including an explanation and overview of responsibilities, steps to prepare for EUDR and a Q&A session with our experts.
- Mapping of the company's supply chain entities and its business partners, together with ongoing business transactions, to identify parties subject to EUDR obligations and subsequent analysis and determination of the entities' EUDR obligation regimes.
- Reviewing contracts with trading partners based on supply chain mapping together with proposing appropriate measures to ensure compliance with EUDR requirements.
For more information , please contact our specialists. Our team is ready to guide you through the complexities of the Deforestation Regulation and ensure your company is fully compliant with the new EU requirements.
