Defining Roles and Responsibilities under EUDR: Upstream Operators, Downstream Operators and Traders

The EU Deforestation Regulation (EUDR) is set to enter into force on December 30, 2026. As the enforcement deadline approaches, it is imperative that companies understand how the EU defines the various roles and responsibilities under the law, and which obligations apply to each.

What is an upstream operator? What are an upstream operator's EUDR obligations?

A company is considered an operator - specifically, an upstream operator - if the following circumstances are true:

• They are importing EUDR-relevant commodities or derived products into the EU market for the first time

• They are domestic producers placing EUDR-relevant commodities or goods on the EU market that have been produced within the EU for the first time and have not been placed on the EU market previously

• They are exporting EUDR-relevant commodities or derived products from the EU that have not already been covered by a DDS

Before placing goods on the market, upstream operators are responsible for ensuring that their EUDR-relevant goods are deforestation-free and produced in accordance with the relevant legislation of their country of production.

In other words, upstream operators are the entities responsible for collecting geolocation data / polygons for the relevant plots of land, conducting deforestation analysis to ensure that their products are deforestation-free, and conducting due diligence - also known as legality due diligence - to ensure that the products were produced legally.

The upstream operator is responsible for submitting Due Diligence Statements (DDS) to the EU TRACES system. They are also responsible for ensuring that they pass Due Diligence Reference Numbers (DDRs) to the first downstream operators or traders in the supply chain so that they may retain those reference numbers within their records. Downstream operators and traders do not need to submit due diligence statements to the EU TRACES system, per the simplified EUDR obligations.

What is the definition of a downstream operator?

A company is considered a downstream operator if they supply EUDR-relevant goods to the EU market that have been transformed into derived products using EUDR-relevant commodities. The derived products carry HS codes that appear in the Annex of the Regulation.

Which company is the first downstream operator? Who is responsible for identifying which company in the supply chain fits this role?

The first downstream operator is the first company in the supply chain placing an EUDR-relevant good on the market after the upstream operator have already submitted a DDS for that associated commodity or derived product. The first downstream operator does not need to submit a DDS to the EU TRACES system. They do need to register (once) in the EU TRACES system.

First downstream operators must retain the due diligence reference numbers shared by their upstream operators for the five year data retention period required by the law. However, the responsibility to identify which entity is the first downstream operator in the supply chain as well as the responsibility to share reference numbers downstream is on the upstream operators, not on the first downstream operators. Per the EUDR Guidance, if the first downstream operator does not receive a DDR from their upstream suppliers, they may in good faith assume that those suppliers are not upstream operators.

What is a trader? Can a trader be the first downstream trader?

A company is considered a trader if it re-sells an EUDR-relevant commodity or derived product - without transforming it into a new HS / CN code - within the EU market. Traders may be the first entities downstream in a supply chain after the upstream operator places a good on the EU market and submits a DDS. As noted above, the upstream operator is responsible for sharing DDRs downstream so that the first downstream operators or first downstream traders may retain the relevant DDRs within their systems.

What are the obligations of operators and traders further downstream?

Operators and traders further downstream are not required to retain any due diligence reference numbers from upstream operators. Instead, they must simply retain business records of downstream transactions of their EUDR-relevant goods.

What do upstream operators, downstream operators and traders need to provide at customs?

Upstream operators: An upstream operator who places imported products on the Union market or exports relevant products must provide either a due diligence statement (DDS) reference number or a declaration identifier to complete their customs declaration. This applies to the customs procedures ‘release for free circulation’ and ‘export’. A DDS reference number is issued after a DDS is submitted and can be used in the customs declaration lodged for the relevant product. If a DDS covers multiple shipments or batches, the same DDS reference number may be used in several customs declarations, provided all EUDR requirements are met.

Downstream operators and traders: Downstream operators and traders do not submit a new DDS to EU TRACES. They are limited to verifying at customs, upon request, that a product was already placed on the EU market and already carries a valid DDS. They may produce supporting evidence such as prior customs declarations, contracts, product order documents, shipment accompanying documents, bills of lading, delivery notes, air-way-bills, and any other credible documentation which can be linked directly to the relevant product(s) in question. They may also provide the reference number provided from their supplier(s) in their customs declarations, and in the absence of this information they can make use of a conventional reference number, which will be communicated by the EU Commission for use in the customs declaration submitted for re-import. Competent Authorities in the Member States will be informed about the use of the conventional DDS reference numbers at customs.

For more information about the upcoming EUDR deadline and identifying your company's roles and responsibilities under the law, reach out to our team of policy experts.