Policy Deep Dive: When are EUDR Due Diligence Statements mandatory?

The EU Deforestation Regulation goes into effect on December 31st, 2024, after which Due Diligence Statements will be required for all in scope commodities and derived products placed on the EU market. The EUDR applies to rubber, soy, palm oil, wood / timber, cocoa, coffee and cattle, as well as products derived from these commodities. A full list of derived products by HS code that are in scope of the regulation can be found in Annex I of the adopted text.

The EU has yet to release its official list of high, standard and low risk countries, and companies are clamoring to prepare their respective supply chains for the due diligence and reporting obligations to come. Here are some facts you need to know about the EUDR’s required Due Diligence Statements:

When will Due Diligence Statements be required?

Under the EUDR, Due Diligence Statements must be made available to competent authorities before a product is placed on the Union market. This means that the requisite due diligence must be conducted for the commodities and derived products that are in scope prior to their placement on the EU market, not retroactively.

Due Diligence Statements will be required after EUDR goes into effect on December 31st, 2024. Any commodities or derived products using in-scope commodities harvested after December 2020 and placed on the market after December 2024 would require a Due Diligence Statement.

Will Due Diligence Statements be required for every shipment?

Every shipment of in scope commodities and/or derived products must have an accompanying Due Diligence Statement. Due Diligence Statements correspond to each associated HS code within a shipment.

The EU plans to launch an information system through which operators will manually input all of the information required for the Due Diligence Statements. This information includes data such as the operator/trader name and address, country of activity, net mass in kg being placed on the EU market, scientific name and common name for the commodity in question, and geolocation for the associated plots of land.

What about commodities / products sourced from low-risk countries?

Let’s review the EUDR adopted text.

Per Article 8 of the EUDR, “operators shall not place relevant products on the [EU] market or export them without prior submission of a due diligence statement. Operators who, on the basis of the due diligence exercised in accordance with Article 8, conclude that the relevant products comply with Article 3 shall, before placing the relevant products on the market or exporting them, make available a due diligence statement to the competent authorities through the information system referred to in Article 33. Such electronically available and transmittable due diligence statments shall contain the information set out in Annex II for the relevant products and a declaration by the operator that the operator exercised due diligence and that no or only a negligible risk was found.”

Article 13 of the EUDR introduces the simplified due diligence that would be required in cases where the relevant commodity or product is sourced from a country considered low risk for deforestation: “When placing relevant products on the market or exporting them, operators shall not be required to fulfill the obligations under Articles 10 and 11 [i.e. risk assessment and risk mitigation] where, after having assessed the complexity of the relevant supply chain and the risk of circumvention of this Regulation or the risk of mixing with products of unknown origin or origin in high-risk or standard-risk countries or parts thereof, they have ascertained that all relevant commodities and relevant products have been produced in countries…that were classified as low risk in accordance with Article 29. In such cases, the operator shall make available to the competent authority upon request relevant documentation demonstrating that there is negligible risk of circumvention of this Regulation or of mixing with products of unknown origin or origin in high-risk or standard-risk countries or parts thereof.”

In layman’s terms: The EU requires a Due Diligence Statement to be submitted every time a relevant commodity or product is placed on the EU market, regardless of whether that product is sourced from low, standard or high risk countries. However, if companies have determined (and can prove) that they are only sourcing from low-risk countries as defined by the EU, no further risk assessment - in the form of deforestation analysis - or risk mitigation would be required.

What’s next?

December 2024 is less than twelve months away. If your company has any in-scope commodities or derived products in its supply chain that are made available on the EU market, it’s time to start mapping your upstream supply chain.

For more information about Sourcemap’s EUDR solution, reach out to our team of experts.