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The European Timber Regulation (EUTR) has been in force for nearly a decade. Now the EU is replacing it with a new regulation targeting timber, as well as other commodities.\u00a0On 6 December 2022, the EU reached an agreement on a new law -The European Union Deforestation Regulation (EUDR)-\u00a0to prevent companies from placing commodities linked with deforestation and forest degradation, onto the EU market, or exporting them from the EU.<\/p>\n
Commodities and products covered<\/strong><\/p>\n The new regulation sets mandatory due diligence rules for Operators \u2013 organisations which place specific commodities or products on the EU market or export them from the EU \u2013 that are associated with deforestation and forest degradation. The law has initially included 7 commodities within the scope of the EU regulation: timber, soy, beef, palm oil, cocoa, coffee and rubber.<\/p>\n Within each commodity, the regulation defines which products are included within the scope of the law, according to a list of EU customs codes. The list also includes some derived products such as leather, chocolate and furniture.<\/p>\n By default, this means that any product or commodity imported or exported under a different Customs Code would be considered to be exempt from the regulation.<\/p>\n Prohibitions<\/strong><\/p>\n Products of the commodities included in the regulation may only be placed on, or exported from, the EU market if:<\/p>\n The regulation provides a cut-off date for deforestation (and forest degradation) to occur of 31 December 2020. In other words, commodities shall not have been produced on land that has been subject to deforestation (or forest degradation) after 31 December 2020.<\/p>\n Due diligence requirements<\/strong><\/p>\n A key requirement is the obligation for Operators to implement a due diligence system to avoid sourcing of commodities or products which are not deforestation-free or have not been produced in accordance with the relevant legislation of the country of production.<\/p>\n Companies that place relevant commodities on, or export them from, the EU market, ('Operators' according to the regulation) are obliged to implement this due diligence system, conducting risk assessments and mitigating any risks which are not negligible, before placing on the EU market or exporting.<\/p>\n Operators are required to publicly report as widely as possible on an annual basis, including online, on their due diligence systems and the steps they have taken to ensure compliance with their obligations.<\/p>\n Companies described as \u2018Traders\u2019 in the regulation (those trading goods which are already placed on the EU market), are responsible for storing and sharing information (with national Competent Authorities, upon request) on their supply chains. However, large Traders \u2013 those which are not Small to Medium-sized Enterprises (SMEs) \u2013 will also be required to conduct due diligence. This is due to their scale of influence in supply chains.<\/p>\n Strong traceability & transparency obligations<\/strong><\/p>\n The regulation sets out an obligation on Operators to obtain geo-localisation coordinates (latitude and longitude of all plots of land) from where the commodities or products were produced, or harvested in the case of wood-products - as well as the date or time range of production.<\/p>\n Coordination of enforcement activities<\/strong><\/p>\n A new development in the regulation is that the European Commission will develop a central database of risk assessments or \u2018country benchmarks\u2019. This benchmarking system will categorise nations as posing a low, standard or high risk of commodities or products being associated with deforestation, to aid with due diligence and control.<\/p>\n Operators sourcing from countries that the Commission has designated as \u2018low-risk' will be allowed to conduct \u2018simplified due diligence\u2019, which means that they will be dispensed from carrying out the second and third steps of the due diligence process, i.e., risk assessment and risk mitigation. However, Operators will still be required to conduct the first step of due diligence - collecting information on their supply chains. This includes obtaining geo-localisation information on forest\/farm production plots.<\/p>\n Obligations for national authorities to enforce the regulation and carry out checks will also vary according to the level of risk assigned to the countries of production. This means enhanced monitoring for high-risk countries and reduced for low-risk countries.<\/p>\n Additionally, a central information system will also be developed to receive and record Operators' due diligence statements, which will accompany applications for customs clearance. This system will be accessible to national and customs authorities about operators and traders active in the EU, and is likely to include a series of functionalities such as: allowing the registration of operators; uploading and linking of due diligence statements with customs declarations, as well as permitting the risk profiling of operators and relevant commodities\/products for the purpose of identifying high risk consignments.<\/p>","protected":false},"excerpt":{"rendered":" The European Timber Regulation (EUTR) has been in force for nearly a decade. Now the EU is replacing it with a new regulation targeting timber, as well as other commodities.\u00a0On 6 December 2022, the EU reached an agreement on a … Continue reading \n