Regulation (EU) 2023/1115 of the European Parliament and of the Council of 31 May 2023 on the making available on the Union market and the export from the Union of certain commodities and products (“EUDR”) has been in force as of 29 June 2023. The Regulation is intended to limit EU’s contribution to global deforestation, forest degradation, greenhouse gas emissions, and biodiversity loss.

With effect already from 30 December 2024, EUDR is set to impose numerous duties on operators who:

  • place on the EU market (including by importation),
  • make available on the EU market, or
  • export from the EU

certain products made using commodities whose consumption in the Union contributes to the above-mentioned processes to the greatest extent.

What commodities are caught?

EUDR pertains to what it calls relevant commodities, such as:

  • cattle,
  • cocoa,
  • coffee,
  • oil palm,
  • rubber,
  • soya,
  • wood.

EDUR duties apply also to “relevant products”, as set out in Annex I to the regulation, that contain, have been fed with or have been made using relevant commodities. There are quite many relevant products, including products with wood, such as boards, plywood, cardboard, paper, and products made of rubber, including natural rubber, compounded rubber, tires, clothes, hard rubber.

What duties are imposed by EUDR?

The following requirements must be met in order to place, make available or export relevant products on or from the EU market:

  1. they are deforestation-free,
  2. they have been produced in accordance with the relevant legislation of the country of production, and
  3. they are covered by a due diligence statement.

Before any relevant products are placed on the market businesses must also exercise due diligence, which includes:

  • collecting information, data and documents needed to fulfil the EUDR requirements (e.g. the geolocation of all the plots of land where the production was carried out, adequately conclusive and verifiable information that the relevant products are deforestation-free);
  • making a risk assessment based on the collected information, taking into account in particular assignment of risk to the relevant country of production, the prevalence of deforestation or forest degradation in the country of production or parts thereof, concerns such as level of corruption, prevalence of document and data falsification, lack of law enforcement; and
  • implementing risk mitigation measures, such as independent surveys or audits.

Operators falling within the ambit of EUDR will also have to implement and systematically upgrade a set of measures and procedures to ensure the compliance of relevant products they place on the market or export with EUDR requirements.

What penalties for infringement are provided in EUDR?

In accordance with EUDR, member states have the power to determine the kinds and measure of penalties, which should be effective, proportionate and dissuasive. Penalties are listed in Article 25 EUDR and include:

  • a fine of at least 4 % of total annual Union-wide turnover  in prior financial year,
  • confiscation of the relevant products,
  • temporary prohibition from placing or making available on the market or exporting relevant commodities and relevant products;
  • temporary exclusion for a maximum period of 12 months from public procurement processes and from access to public funding, including tendering procedures, grants and concessions.

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