EU Deforestation Regulation: is your supply chain ready?

Understanding the EUDR and the compliance countdown

The EU Deforestation Regulation (EUDR) introduces mandatory due diligence rules for placing, making available or exporting seven commodity groups linked to deforestation: cattle, cocoa, coffee, oil palm, rubber, soya and wood. If your business trades in these commodities or their downstream products  – from furniture to chocolate – compliance is not optional. The scope and depth of your obligations depend on your role in the supply chain and on the size of your enterprise (SME or non-SME), with the smaller businesses benefiting from significant simplifications.

The obligations apply from 30 December 2026. For operators who are natural persons or micro or small enterprises established as such by 31 December 2024, those provisions apply from 30 June 2027. Prudent businesses are preparing now.

What you must do

Products within the scope cannot be placed on the EU market, made available or exported unless they meet three key requirements: (i) they are deforestation-free; (ii) they are legally produced in the country of production; and (iii) they are covered by a due diligence statement (DDS) submitted through the EU Information System.

If you are the first to place those products on the EU market or export them from the EU market, your due diligence obligation consists of three steps, the scope and depth of which depend on the size of the enterprise and the country of production of the relevant commodity or product.

1. Information collection: Gather comprehensive data, including product description, HS code, quantities, country of production, supplier details and precise geo-location coordinates for all plots of land where the relevant commodities were produced. For cattle, this includes all establishments where the cattle lived from birth through to slaughter. Where the relevant product is a composite containing multiple relevant commodities, geolocation data must cover each relevant commodity component.
   
   
2. Risk assessment: Evaluate the collected information against mandatory criteria, including country risk classification, supply chain complexity, corruption levels, substantiated concerns and other relevant risk indicators.
   
   
3. Risk mitigation: Mitigate any non-negligible risk before placement or export through additional information requests, audits and controls.

If you place on the EU market or export relevant products for which due diligence has al-ready been carried out by a preceding operator in the supply chain, you must collect in-formation about your suppliers and customers and, where applicable, the reference numbers of the due diligence statements.
Mixing with unknown or non-compliant origin is prohibited. You must also keep the records for five years.

Key practical considerations

One DDS can cover multiple shipments for up to one year, which saves time if you regularly source from the same suppliers. For imports and exports, the DDS reference number must be included in your customs declaration. If your product is made from several regulated components (e.g. furniture from different timber parts, or chocolate from cocoa butter and paste), each component must be traceable – missing geolocation or species data for any part means the product cannot enter the EU market. Fully recycled or end-of-life waste materials are exempt, but manufacturing by-products and certain waste items listed in Annex I of the EUDR (e.g. cocoa shells) are not. Third-party certifications can support your risk assessment but do not replace your due diligence obligation.

The cost of non-compliance

The maximum fine for legal entities shall be at least 4 % of the entity's total annual EU-wide turnover. Additional penalties include forfeiture of the relevant products and revenues, as well as temporary exclusion from public procurement processes and access to public funding. Authorities may also impose a temporary ban on placing, making available or exporting the relevant products.

Start acting now

Establishing plot-level traceability, mapping supply chains and building compliant due diligence systems takes months. With the start of application getting closer, the window for orderly implementation is narrowing. Businesses that are delayed risk facing enforcement action from day one.

For practical expert guidance on EUDR compliance and to discuss your specific requirements, please contact our team. Our law firm provides comprehensive EUDR compliance support, including scope assessment, due diligence system design and risk assessment protocols, legal review of supply chain documentation, regulatory advisory and contractual frameworks for supplier compliance. Early preparation is essential to ensure seam-less compliance once enforcement begins.