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Green Forum

Traceability and geolocation of commodities subject to EUDR

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The Supply Chain

Production

Commodities must be produced legally and be deforestation-free. Geolocation data of the area of production must be collected

Commodities that were produced illegally on deforested land after 31 December 2020, or if the product is not traceable, do not comply with the rules and cannot be placed on the EU market or exported. Compliant commodities must be stored separately to those that are of unknown origin or are non-compliant.

Trading and shipping

Deforestation-free and legal commodities must be kept separate from other goods while being traded and shipped.

Mixing compliant and non-compliant commodities or commodities of unknown origin is not allowed. In such cases, the whole shipment would be non-compliant and cannot be placed on the EU market.

Importing

Before placing a product on the EU market, the importer must perform due diligence.

The importer must also submit a Due Diligence Statement (DDS) and will receive a reference number (and security token), which must be reported in the customs declaration for import.

Only compliant products may be placed on the EU market. The operator may place the product on the EU market when it has been released for free circulation by the customs authorities

Re-importing

The same obligations apply as if the product were placed on the market for the first time.

When an operator re-imports (i.e., releases for free circulation) a product that was previously exported from the EU market and places it under the customs procedure ‘release for free circulation’, it is considered a “downstream operator”.

The re-importer, who is releasing a relevant product for free circulation and hence placing it on the market, is subject to the obligations of downstream operators, which are dependent on the size of the re-importer:

  • If the re-importer is an SME operator, Art. 4(8) EUDR applies, meaning the re-importer does not need to carry out due diligence. At customs, the SME re-importer provides the reference number(s) received from its supplier(s) in the customs declaration.
  • If the re-importer is a non-SME, already existing due diligence statements can help ascertain that due diligence was exercised upstream in accordance with Art. 4(9) EUDR. The non-SME re-importer needs to submit a DDS prior to re-importing and needs to provide the reference number received for its DDS when releasing products for free circulation.

The above applies equally when a product that is imported contains relevant products that were previously placed on the EU market and have been subject to due diligence, e.g. cocoa beans are exported from the EU to a third country to manufacture chocolate, and the chocolate is subsequently released for free circulation in the EU

Selling or exporting

Before selling the product on the EU market, large retailers must check that due diligence has been exercised upstream in the supply chain.

The retailer must check the DDS upstream in the supply chain and submit their own DDS based on all previous reference numbers. The trader then receives a new DDS reference number and security token.

Small companies (SMEs) do not need to check or submit due diligence statements for products that have been subject to due diligence further up the supply chain. 

Traceability requirements

Commodities must be produced legally and deforestation-free. Traceability to the plot of land is necessary to demonstrate that there is no deforestation occurring at a specific location. The Regulation requires that Operators collect and provide in the due diligence statement geographic coordinates of the plots of land where the commodities were produced or harvested, which must then be submitted to the Information System. Products that do not meet the traceability requirements may not be placed on the EU market or exported.

Traceability requirements apply to each batch of imported, exported or traded commodities.

There is no exception for the traceability requirements via geolocation. Subjects must also assess the complexity of the supply chain, the risk of circumvention of the Regulation and the risk of mixing with products of unknown origin or origin in high-risk, standard-risk countries or parts thereof (Article 13).  If the operator obtains or is made aware of any relevant information that would point to a risk that the relevant products do not comply with the Regulation or that the Regulation is circumvented, the operator shall fulfil all of the obligations under Articles 10 & 11 and shall immediately communicate any relevant information to the competent authority.

The geolocation information obligation to be provided in the due diligence statements is connected to each relevant product. Subjects will thus need to enter or reference this information each time  they intend to place, make available on the market or export a relevant product.

Products with multiple origins

Operators and traders that are not SMEs must ensure that the information on traceability that they supply is correct, regardless of the length or the complexity of their supply chains.

Traceability information can be added up along supply chains. For instance, a large, bulk shipment of soy that has been sourced in several hundred plots of land from several countries would need to be associated with a due diligence statement that includes all relevant countries of production and geolocation information for every single plot of land from all of these countries that has contributed to the shipment.

When part of a product is non-compliant

If part of a relevant product is non-compliant, the non-compliant part needs to be identified and separated from the rest before the relevant product is placed on the market or exported, and that part may be neither placed on the market nor exported

If identification and separation cannot be done, for instance, because non-compliant products have been mixed with the rest, then the whole relevant product is non-compliant as it cannot be guaranteed that the conditions of Article 3 of the Regulation are met and therefore it may be neither placed on the market nor exported

For instance, when bulk commodities have all been mixed and are linked to several hundred plots of land, the fact that one of the plots of land has been deforested after 2020 would make the whole relevant product non-compliant

This is with no prejudice to other situations, however defined, where 100% of relevant commodities or relevant products placed on the market:-

  1. Can be traced to the plot of land;
  2. Are legal and deforestation-free by the meaning of the Regulation;
  3. At no point in time have been mixed with commodities of unknown origin or non-deforestation-free.

Bulk traded products

For products traded in bulk, such as soy or palm oil, the operator (or traders that are not SMEs) needs to ensure that all plots of land involved in a shipment are identified and that the commodities are not mixed at any step of the process with commodities of unknown origin or from areas deforested or degraded after the cut-off date of 31 December 2020. 

For relevant compositeproducts, such as wooden furniture with different wood components, the operator needs to geolocate all the plots of land on which the relevant commodities were produced. The relevant commodities’ components may be neither of unknown origin nor from areas deforested or degraded after the cut-off date. 

Legality requirement

Relevant commodities and relevant products cannot be placed on the market or exported unless they have been produced in accordance with the relevant legislation of the country of production as per the requirement set out in Article 3(b)

The obligations under Article 3 are cumulative: the legality requirement (Article 3(b)) has to be fulfilled in addition to the ‘deforestation-free’ requirement (Article 3(a)) and the requirement for the commodities or products to be covered by a due diligence statement (Article 3(c)). 

"Relevant legislation" may include, among others, national laws (including relevant secondary law) and jurisprudence, as well as international law as applicable in domestic law. The Regulation presents a non-exhaustive list of legislative areas without specifying particular legal acts, as these differ from country to country and may be subject to amendments.  

Relevant documentation is required for risk assessment, as stated in Articles 9 (1) (h) and 10. Such documentation may, for example, consist of official documents from public authorities, contractual agreements, court decisions or impact assessments and audits carried out. In any case, the operator has to ensure that these documents are verifiable and reliable, taking into account the risk of corruption in the country of production.  

The Commission has provided further information on legality in its guidance document.

Information on geolocation data

Geographic information linking products to the plot of land is already used by part of the industry and several certification organisations. Remotely sensed information (air photos, satellite images) or other information (e.g. photographs in the field with linked geotags and time stamps) may be used for verifying if the geolocation of declared commodities and products is linked to deforestation.  

See below for more details regarding geolocation data.