What is the EUDR Due Diligence Statement?
The Due Diligence Statement is a mandatory declaration required under the European Union Deforestation Regulation. By submitting this document, an operator or trader assumes legal responsibility that their relevant products comply with the regulation.
The statement confirms that the commodities were produced on land that was not subject to deforestation after December 31, 2020. Furthermore, it verifies that the production complied with the relevant legislation of the country of production, covering labor rights, human rights, and environmental protections.
Who Needs to Comply with the EUDR?
The regulation distinguishes between operators and traders, primarily affecting those dealing with cattle, cocoa, coffee, oil palm, rubber, soya, and wood, as well as derived products like chocolate or furniture.
Operators are the entities that first place the relevant products on the EU market or export them. They bear the primary responsibility for conducting due diligence. Large traders are treated similarly to operators and must file their own statements, while small and medium-sized enterprise (SME) traders need only collect and keep the reference numbers of previously submitted statements.
- Operators placing goods on the EU market
- Operators exporting goods from the EU market
- Large traders operating within the EU
Core Components of the Statement
To complete a Due Diligence Statement, companies must compile specific data about the product and its origins. This includes the quantity of the product, the country of production, and detailed geolocation coordinates.
Additionally, the statement requires the operator to declare that they have exercised due diligence and found no or only a negligible risk that the products do not comply. The declaration must also include the operator's details and the relevant harmonized system (HS) customs codes.
The Geolocation Requirement Explained
One of the most significant and challenging aspects of the EUDR is the geolocation requirement. Operators must collect the geographic coordinates of the plots of land where the commodities were produced.
For plots of land smaller than 4 hectares, a single point coordinate (latitude and longitude) is sufficient. For plots larger than 4 hectares, a polygon geometry is required, outlining the perimeter of the plot to ensure accurate monitoring via satellite imagery.
Steps to Prepare Your Documentation
Compliance requires a robust, three-step due diligence process: information collection, risk assessment, and risk mitigation. First, map your supply chain entirely down to the plot of land. Gather necessary geolocation data and supplier declarations.
Next, assess the risk of non-compliance based on the country of origin's risk benchmark and supply chain complexities. If the risk is not negligible, you must take mitigation measures before placing the product on the market or generating the Due Diligence Statement.
Frequently asked questions
What happens if I don't submit a Due Diligence Statement?
Failure to submit a compliant statement prevents you from legally placing the relevant products on the EU market or exporting them. Non-compliance can lead to severe penalties, including fines up to 4% of EU turnover and confiscation of products.
What commodities are covered by the EUDR?
The regulation covers seven core commodities: cattle, cocoa, coffee, oil palm, rubber, soya, and wood. It also covers various derived products listed in the regulation's annex, such as leather, chocolate, and paper.
What is the cutoff date for deforestation under EUDR?
The critical cutoff date is December 31, 2020. Products must not have been produced on land subjected to deforestation or forest degradation after this date.
Can I submit the statement through my customs agent?
Yes, an authorized representative or customs agent can submit the Due Diligence Statement on your behalf using the EU Information System, but the legal responsibility remains with the operator.
Do SMEs have the same obligations as large enterprises?
SME operators still must perform due diligence, but SME traders have simplified obligations. They do not need to submit their own statements but must keep records of the reference numbers provided by upstream operators.