EUDR compliance: understanding your company position in beef, cocoa, coffee, palm oil, rubber, soy and wood supply chain

The EU Regulation on Deforestation-free Products (Regulation (EU) 2023/1115, hereinafter referred to as ‘the Regulation’, ‘this Regulation’, or ‘EUDR’) introduces obligations to operators and traders relating to the placing or making available on the Union market, and exporting from the Union of deforestation-related commodities and associated products.

In order to clarify the the role plaid by the supply chain of the rubber. The EU “EUDR compliance: understanding your company position in beef, cocoa, coffee, palm oil, rubber, soy and wood supply chain” explains that: “ Natural vulcanised rubber (ex HS 4008) is imported to the EU by a large tyre manufacturer A. Tyre manufacturer A is a non-SME upstream operator placing a relevant product on the Union market for the first time and therefore must exercise due diligence for the vulcanised rubber (ex HS 4008) (Text Box 1 and 4; Art. 4(1); FAQ 2.2, 3.1). It must ensure that the product is deforestation free and legal and must also submit a due diligence statement in the Information System prior to import (Art. 4(2)). If tyre manufacturer A imports multiple shipments of vulcanised rubber (ex HS 4008 from the same country/region), these could be covered by a single due diligence statement for up to one year, so long as due diligence has been carried out for all relevant products intended to be placed on the market”.

Other points provided are:

“Tyre manufacturer A uses the rubber to produce new tyres (ex HS 4011), a new relevant product (Annex I) which it places on the Union market. Tyre manufacturer A is therefore a non-SME downstream operator for the new tyres (ex HS 4011) and must submit a due diligence statement for the new tyres in the Information System (FAQ 2.2), but it can refer to the due diligence statements that it has already submitted by including the relevant reference number (Art. 4(9)). The new tyres (ex HS 4011) are sold to large tyre dealer B. Tyre dealer B makes the new tyres available on the Union market, and the HS code does not change. Tyre dealer B is therefore a non-SME trader”.

“Obligations for non-SME traders are the same as for non-SME operators (Art. 5(1)), so it must submit a due diligence statement to the Information System for the new tyres. Since the new tyres have already been subject to due diligence, tyre dealer B can refer to the due diligence statements that have already been submitted by large tyre manufacturer A by including the relevant reference numbers. However, tyre dealer B must first ascertain (Text Box 2) that due diligence was exercised upstream in accordance with the EUDR (Art. 4(9), FAQ 3.8). Tyre dealer B retains responsibility for the compliance of the relevant products (Art. 4(10); FAQ 3.11)”.

“If tyre dealer B makes tyres available on the market in batches over a period of time, which originate from the same suppliers, tyre dealer B could also submit a single due diligence statement to cover multiple batches for up to one year, so long as due diligence has been ascertained for all relevant products intended to be made available on the market (Text Box 3). Tyre dealer B sells the tyres to SME garage C, which sells tyres to customers. Garage C makes the new tyres available on the Union market, and the HS code does not change. Garage C is therefore an SME trader. Garage C is not required to exercise due diligence or submit a due diligence statement. Garage C must keep a record of information including details of its suppliers and any operators or traders it supplies to, as well as the reference numbers of the existing due diligence statements (Art. 5(3), FAQ 5.8). SME traders do not retain responsibility for relevant products that they make available on the market (FAQ 3.11)”.