What are the EUDR requirements?
The EU Deforestation Regulation ‘EUDR’ (EU) 2023/1115, will require products made with cattle, cocoa, coffee, oil palm, rubber, soya, and wood to be placed on the market after the 30 December 2025 only if they meet the following criteria:
- Are deforestation free;
- Are produced in alignment with the relevant legislation of the country of production; and
- Are covered by a Due Diligence Statement.
The EUDR imposes specific due diligence obligations on market operators. These include:
- Collecting detailed information about the supply chain;
- Assessing the risk of non-compliance; and
- Taking mitigation measures when a risk is identified.
The obligations differ based on the type of market participants and the specificities of a product or its supply chain. In fact, the EUDR gives the possibility to perform simplified due diligence for those products with simple supply chains, come from a low-risk country, and have a low risk of being mixed with products of unknown origin, or with origin in high-risk or standard-risk countries. Simplified Due Diligence does not require to perform the risk assessment nor to set up mitigation procedures.
Until this week the risk-level assigned to each country was unknown, but on May 22nd the EU Commission has finally shared the official risk classification, which will be reviewed in the coming years.
What is new?
The country risk classification is available at this link, and an explanation of the methodology is available here.
The classification considers the rate of deforestation and forest degradation, the expansion of agriculture land for the relevant commodities and their production trends.
Countries have been divided in low, standard and high risk.
All EU counties are classified as low risk, while the only high risk countries are Russia, Belarus, Myanmar, and North Korea. Countries like Brazil, Argentina, Indonesia, Malaysia are classified as standard risk.
What are the consequences?
The risk classification has several consequences for companies.
The Competent Authorities of each EU Member State will perform checks based on the country of origin: checks will be done on 9% of EUDR goods coming from high-risk countries, 3% from standard-risk, while only 1% of goods from low-risk countries will be checked.
The risk classification also influences the due diligence obligations, reducing the burden for those companies with simple supply chains, low risk of mixing products and sourcing exclusively from low-risk countries. These companies will be still required to collect information, but not to conduct the risk assessment nor setting up mitigation procedures.
How does ProductIP help?
ProductIP is serious about product compliance. And ProductIP assists equally serious customers by breaking down the obligations into manageable steps, and with efficient tools to gather mandatory data.
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