Publication
EU Deforestation Regulation
From Department of Agriculture, Food and the Marine
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In June 2023 the EU published Regulation (EU) 2023/1115 of the European Parliament and of the Council, of 31 May 2023, on the making available on the European Union Single Market and the export from the Union of certain commodities and products associated with deforestation and forest degradation, now commonly known as the EU Deforestation Regulation (EUDR). The new regulation, which replaces the EU Timber Regulations (No. 995/2010) will enter into application on 30th December 2024.
To help supply chain actors with preparation for the application of this regulation, the European Commission has published a set of frequently asked questions, which can be accessed here .
The Objective of the Regulation is to minimise the EU’s contribution to global deforestation and forest degradation and to reduce the EU’s contribution to greenhouse gas emissions and global biodiversity loss. Relevant commodities and products may only be placed on the EU market, made available in, or exported from the EU if:
➔ they are deforestation-free,
➔ they have been produced in accordance with the relevant legislation of the country of production; and
➔ they are covered by a due diligence statement.
Deforestation-free means that the relevant commodities must not have been produced on land that was deforested after 31 December 2020 or, in the case of timber and timber products, that the timber was harvested without forest degradation having occurred in the respective forest after 31 December 2020.
There are seven relevant commodities – cattle, cocoa, coffee, palm oil, rubber, soy and wood and some of their derived products such as leather, chocolate, tyres and printed paper. A full list of the relevant EU customs codes and individual product descriptions can be found in the Annex to the Regulation. The regulation applies to relevant products that are produced domestically in Ireland as well as imports into and exports out of Ireland. See Annex 1 of the Regulation for more details.
Due diligence involves the collection of certain information, data and documentation relating to the origin of the consignment. On this basis, a risk assessment is carried out to determine whether there is a danger that the relevant products are not in compliance with the Regulation. If the risk assessment reveals that there is a non-negligible risk, procedures and measures must be taken to mitigate the risk. The goods concerned may only be placed on the EU market, made available in the EU or exported from the EU if there is negligible risk, that they are not in compliance with the Regulation. There are 3 stages to due diligence as outlined below.
Stage 1- Guaranteeing access to information
As an importer, you'll need to provide information on your commodities, quantity, supplier, country of production, etc. You are responsible for your supply chain. You must also have the geographic coordinates of the plots of land on which the goods you are placing on the European market have been produced. Essential for controlling deforestation, this information is used to establish a clear link between the commodity or good placed on the EU market and the plot of land on which it was grown.
You must also check compliance with the legislation of the country of production, particularly in terms of human rights, and ensure that the rights of indigenous populations have been respected. The purpose of collecting this information is to inform the risk assessment.
How do you obtain this geographic information? Geolocation is the most efficient way of providing the authorities with the data they need to verify that your good is not contributing to deforestation. The traceability of your products using geolocation data can be combined with remote monitoring via satellite images to improve the efficacy of the regulation.
Simplified due diligence set out in Article 13 of the regulation can be used for relevant commodities and products from countries classified by the EU Commission as low-risk countries.
Stage 2- Risk analysis and assessment
As a company, you must use the information gathered in phase 1 to analyse and assess the risk of non-compliance in the supply chain. The assessment of the risk of non-compliance of products must include in particular:
● the risk classification of the country of production,
● the presence of forests,
● the presence of indigenous peoples,
● the extent of deforestation or forest degradation,
● national issues such as corruption, fraud, human rights violations, supply chain complexity and suppliers' history of non-compliance.
This risk analysis must be repeated at least once a year for each supply chain.
Stage 3- Adopt risk reduction measures
● If the risk analysis carried out during phase 2 shows that the risk is not negligible, you will need to take appropriate and proportionate mitigation measures. For example, you may request additional information or documents, or carry out independent audits. The procedures and measures taken to reduce the risk must be reviewed at least annually.
Due diligence statement – information system
Operators and non-SME traders will have to submit their due diligence statements using a centralised system. This system will generate a reference number for each statement. This reference number must be made available to Customs via the Customs Declaration . Currently in development, this information system will have to be accessible to national and customs authorities.
What is an operator As defined in Article 2(15) of the Regulation, an operator is a natural or legal person who places relevant products on the market (incl. via an import) or exports them in the course of commercial activity.
What is a Trader – As defined in Article 2(17) of the Regulation, a Trader means any person in the supply chain other than the operator who, in the course of a commercial activity, makes relevant products available on the market;
What is a non-SME trader - A non-SME trader is a trader which is not a small and medium-sized undertaking pursuant to Article 2 (30) of the EUDR i.e. larger than an SME. The obligations of large traders are the same as those of operators:
a) they need to file a due diligence statement;
b) when doing so, they may rely on the due diligence previously carried out in the supply chain but, in such a case, they are subject to the provisions of Article 4(9);
c) they are liable in case of breach of the Regulation, also for a due diligence carried out or a due diligence statement submitted by an upstream operator.
Companies that trade in goods already placed on the European market and that are not small and medium-sized enterprises (SMEs), are considered as operators because of their influence in the supply chains.
Traders who are SMEs do not have to carry out due diligence, but they are obliged to collect and retain the following information for five years:
● contact details of their suppliers and the reference numbers of their due diligence statements
● contact details of the companies they supply
What are the reporting obligations for operators?
Operators which are not SMEs (larger than an SME) will have to publicly report on their due diligence system annually.
Consequences for the EU Timber Regulation No 995/ 2010
The Regulation on deforestation-free products repeals the EU Timber Regulation No 995/2010 with effect from 30 December 2024. However, for a transitional period of three years until 31 December 2027, the EU Timber Regulation will continue to apply to timber and timber products produced before 29 June 2023 and placed on the market from 30 December 2024.
Penalties for non-compliance must be proportionate and dissuasive. They can take various forms: payment of fines, confiscation of products or income, disqualification from procurement processes and/or exclusion from procurement procedures and access to public funding.
Every year, Member States are required to report to the Commission and the public on the application of this Regulation. This report must include the following elements:
● Plans of checks and the risk criteria on which those plans were based;
● The results of the checks;
● The corrective measures imposed.
The Department of Agriculture, Food and the Marine is the designated competent authority for the implementation of the EU Deforestation Regulation in Ireland.
Minimum inspection rates apply, which differ depending on the classification of the countries by the EU Commission. The list of countries will be published no later than 30 December 2024.
● Low-risk countries: minimum inspection rate of 1 per cent
● Standard-risk countries: minimum inspection rate of 3 per cent
● High-risk countries: minimum inspection rate of 9 per cent
Pending the creation of this list, all countries are classified as "standard". In addition to the risk of deforestation and forest degradation, countries may also be assessed in terms of respect for human rights, the rights of indigenous peoples and local communities.
What rules apply to products that already have a FLEGT licence?
Timber products that fall within the scope of Regulation (EC) No 2173/2005 and are covered by a valid FLEGT licence are considered legal under the Deforestation-Free Products Regulation, i.e. produced in accordance with the relevant legislation of the country of production. In order for these products to be placed or made available on the European Union market, they must also be deforestation-free and be covered by a due diligence statement.
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EU Deforestation Regulation (EUDR)
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