Welcome to our first Track Record Global newsletter; this focuses on the upcoming EUDR legislation, addressing some commonly asked questions. We look forward to sharing future news both about legislation and events at Track Record Global over the coming months.

1. What is EUDR?

The Regulation (EU) 2023/1115 on deforestation-free products, known as EUDR, will prevent companies from placing commodities linked with deforestation and forest degradation onto the EU market, or exporting them from the EU.

To comply with the regulation, products must demonstrate they:
a) are deforestation-free
b) have been produced in accordance with the relevant legislation of the country of production
c) are covered by a due diligence statement.

Commodities must not have been produced on land that has been subject to deforestation or forest degradation after 31 December 2020.

2. How do I know if my business is affected by EUDR?

Your business will have obligations under EUDR if you place in scope commodities or derived products on the EU market or you have sales outlets in the EU. This will also be the case if you place/sell in scope goods on the NI market (see question 12 below).

3. Are additional commodities or products included in EUDR compared to EUTR?

Yes, the regulation covers additional commodities including soy, coffee, cocoa, palm oil, rubber and cattle products. It also extends to some derived products such as leather, chocolate, tyres, or furniture.

Additional timber products are also in scope including indoor seating and printed paper.
Of the commodities included, initially TRG will be providing Due Diligence services for palm oil, leather and timber products. The full list of commodities and products in scope can be found in Annex I of the regulation.

4. What are the key differences between operator and trader and how has this changed?

Under EUTR, operators are entities placing goods on the EU market for the first time, with those purchasing products already on the market considered traders. 

Under EUDR, operators are entities that place goods on the EU market, or export from the EU. Companies that transform one product of Annex I into another product of Annex I within the EU are also defined as operators. Additionally large traders, i.e. not Small and Medium-sized Enterprises (SMEs), will have the same obligations as operators.

5. What additional information is required for our products to be compliant?

Operators (and non-SME traders) are obliged to implement a Due Diligence System, consisting of three steps: Information Collection, Risk Assessment, and Risk Mitigation.

Information Collection will now need to include geolocation coordinates of the area of production, and the date or time range of production. Risk Assessment and Mitigation will have a broadened scope including indigenous peoples and local communities in areas of production; and social and human rights through the supply chain. There will be a requirement to gather data to populate due diligence statements at individual shipment/consignment level.

6. As each consignment needs to be compliant, what paperwork is needed with each shipment?

Every shipment must have a due diligence statement submitted, which will be checked by customs authorities before releasing the relevant products for circulation.

7. We hear there is a digital portal being managed by the EU to capture the Due Diligence statements; how do we get access to this?

The EU’s Information System, which will contain the statements submitted by operators or traders to comply with EUDR, is currently being pilot tested. The Commission will provide a training environment and “train the trainers” sessions in Summer 2024, with other member state authorities. We are also expecting manuals and other learning materials as the year progresses.

8. Who completes the due diligence statement?

The due diligence statement will be completed by the operator or trader; however, they may mandate an ‘authorised representative’ to submit the due diligence statement on their behalf. Where an authorised representative has been mandated, responsibility for compliance remains with the operator or trader.

9. How are countries risk rated/benchmarked?

As yet, country benchmarking has not been published by the EU. Countries will be classified as low, standard or high risk; however, until classified as low or high all countries should be considered standard by default.

The methodology the EU will use for country benchmarking will be published in Spring this year – this will help us to make some predictions regarding low/standard/high classification for your supply chains.

Due diligence obligations for supply chains from countries classified as standard and high will be identical – the high rating will mean enhanced scrutiny from competent authorities, resulting in a higher percentage selected for audits. For countries classified as low risk, due diligence obligations will be limited to information collection and submission of due diligence statements, without the requirement for risk assessment and mitigation.

10. When must we comply?

Products placed on the EU market after 30th December 2024 must comply with EUDR – this means shipments from e.g. China that ship from ~mid-November onwards should have EUDR assessments and Due Diligence statements if they will arrive in EU after 30th December.

11. Are there any exceptions to these timings?

Products sold after 30th December 2024 that are produced using materials already placed on the EU market prior to this date do not need to comply with EUDR but will have an obligation to prove that they were already on the market, e.g. invoices and delivery notes demonstrating the material was purchased and received from an EU entity prior to 30th December.

Products sold after 30th December 2024 containing timber that was harvested prior to June 2023 just needs to comply with EUTR and not EUDR (the current assumption is that full traceability would be required to demonstrate this). 

12. Does EUDR apply to products being imported and sold into Northern Ireland?

At the moment, we have to assume EUDR applies to all products going to Northern Ireland; however, with the Safeguarding the Union command paper and the transfer of green lanes to the Internal Market system it does suggest there could be movement. Negotiations between the UK government and EU are ongoing.

13. Could I be in a scenario where my products need to comply with both UKTR and EUDR?

Yes, if you import in scope timber-based products to the UK, which are then subsequently sold in Northern Ireland or other EU outlets.

14. When will a deforestation regulation come to the UK?

The Environment Act 2021 laid the groundwork for the ‘Forest Risk Commodities (FRC) Regulation’; however, there is still no timeline on when the regulation is expected to enter into force.

15. Will TRG provide assessments for other commodity derived products affected by EUDR?

TRG is constantly evolving our Due Diligence services to meet EUDR requirements. We already provide assessments for other commodities aside from timber covered by the new EUDR legislation; please contact us directly for any specific queries.

16. Will TRG be working to some specific timelines in the run up to EUDR entering into application?

We have a detailed timeline relating to the consignment proposal, supplier training and engagement, along with recommended start dates. Your account manager will engage with you shortly outlining this detail if EUDR applies to your organisation.