Jun 13, 2024
EUDR Deep Dive: When Do I Need to Submit a Due Diligence Statement?
Beginning December 30, 2024, any time a product in scope for the EU Deforestation Regulation is placed or made available on the EU market it must be accompanied by a due diligence statement submitted to the EU Information System.
How to know whether your product is in scope of the Regulation
In Annex I of the EUDR, the regulation lists a series of Harmonized System Codes of products that are subject to the regulation. If a commodity or product is listed in Annex I, regardless if the product is being imported, exported, or sold domestically it must have an accompanying due diligence statement.
For the full list of relevant HS codes, refer to Annex I (page 38) of the adopted text.
Placing on the market vs making available on the market
Placing on the market occurs when an operator makes a relevant commodity or a relevant product available on the Union market:
for distribution, consumption or use
for the first time
in the course of its commercial activity.
Making available on the market occurs when a commodity or product is supplied on the Union market:
for distribution, consumption, or for use
in the course of commercial activity.
The primary distinction here is that products being placed on the market are being supplied for the first time on the EU market whether it is via import, export, or domestically.
This distinction is important because knowing whether you are placing vs making available on the market determines what information needs to be included in the due diligence statement and whether you are able to reference due diligence that was already conducted further upstream in your supply chain.
If you are placing a product on the EU market (When the product is first supplied on the EU market) you must include all information including geolocation data and the due diligence reference number of all components of your finished product.
If you are making a product available on the market you are able to reference prior due diligence conducted on that product. This means you are able to link the existing due diligence statement that was submitted to the EU IT system via a due diligence reference number.
Real world example
Let's look at a scenario in which products are both being placed and made available on the market:
A cocoa wholesaler imports a batch of cocoa from Cote d'Ivoire into the EU (placing on the market). Upon import, the cocoa wholesaler is expected to submit a DDS [#1] that includes all information outlined in Annex II of the EUDR, including geolocation of all plots of land where the cocoa was produced. The cocoa wholesaler then sells its product to a chocolate factory (making available on the market) and must submit another DDS [#2] that references prior due diligence via Statement #1’s reference number.
After the chocolate factory transforms the cocoa into chocolate and sells the product on the EU market they must submit a new DDS [#3] that must include all the information in Annex II, including the reference number of all the cocoa used to produce the chocolate. In this case, the chocolate is being placed on the market as it is the first time the product is being supplied on the EU market.
DDS #1 is the initial statement of the product entering the EU market and therefore is being placed on the market. This means complete due diligence must be conducted by the operator including deforestation analysis and legality assessment. Additionally, the DDS must be accompanied by the geolocation data of each plot of land where the commodity was produced.
DDS #2 is an example of making available on the market. The operator / trader is supplying a product that has an existing due diligence statement in which full due diligence was conducted. When making available on the market the operator / trader submitting the DDS via the IT system must still ascertain that the product underwent the proper due diligence, but may reference that due diligence via the reference number.
DDS #3 is an example of placing on the market. The product is listed in Annex I and therefore subject to the regulation, but was transformed from another relevant HS code. Therefore the finished product must reference the original due diligence reference number of all the commodities used to make the finished product. This could represent multiple reference numbers.
To learn more about how to prepare your business for compliance with the EU Deforestation Regulation, reach out to our team of experts.