EUDR compliance. An updated version of “Frequently Asked Questions Implementation of the EU Deforestation Regulation” on commodities, values and other compliance topics. First analysis.

You can find below the questions and answers listed by Frequently Asked Questions Implementation of the EU Deforestation Regulation. These Q&A are divided between this article and another one.

What products are included in the Regulation?

The Regulation applies only to products listed in its Annex I. Products not included in Annex I are not subject to the requirements of the Regulation, even if they contain relevant commodities in the scope of the Regulation. For example, margarine made from palm oil is not covered by the Regulation. Likewise, products with an HS code not included in Annex I, but which might include components or elements derived from commodities covered by the Regulation – such as cars with natural rubber tyres – are not subject to the requirements of the Regulation. A short analysis of the update version of “Frequently Asked Questions Implementation of the EU Deforestation Regulation”.

What about listed products that do not contain listed commodities?

Products included in Annex I that do not contain, or are not made of, the commodities listed in the corresponding left column of Annex I are not covered by the Regulation.

“ex” before the HS code of products in Annex I means that the product described in the annex is an “extract” from all the products that can be classified under the HS code. For instance, code 9401 might include seats made of raw materials other than wood, but only wooden seats are subject to the requirements of the Regulation. Similarly, HS 0201 covers “Meat of bovine animals, fresh or chilled”, whereas ex 0201 in Annex I of the Regulation covers only “Meat of cattle, fresh or chilled”, meaning cattle of the genus Bos and it’s sub-generas: Bos, Bibos, Novibos and Poephagus, but bison (Bison genus) or buffalo (Syncerus genus) meat are not covered by the Regulation.

Does the Regulation apply regardless of quantity or value?

There is no threshold volume or value of a relevant commodity or relevant product, including within processed products, below which the Regulation would not apply.

Operators, downstream operators and traders placing or making available on the EU market or exporting a relevant product included in Annex I, whatever its quantity, are subject to the obligations of the Regulation.

What about commodities produced in the EU?

Commodities produced inside the EU are subject to the same requirements as commodities produced outside the EU. The Regulation applies to products listed in Annex I, whether they are produced or manufactured in the EU or imported.

How does the Regulation apply to wood and paper used for packaging?

For example, in the case of a producer selling packaging, such as pallets, to manufacturers (to protect the final product – not to be sold as a final product to consumers), the text “not including packaging material used exclusively as packaging material to support, protect or carry another product placed on the market” in Annex I should be understood as follows:

If any of the concerned packaging is placed on the EU market or exported as a product in its own right (i.e. standalone packaging), rather than as packaging for another product, it is covered by the Regulation and therefore legal requirements apply.

If packaging, as classified under HS code 4415 or another HS Code, for example HS 48, is used to ‘support, protect or carry’ another product, it is not covered by the Regulation. Packaging materials used exclusively as packaging material to support, protect or carry another product placed on the EU market is not a relevant product within the meaning of Annex I of the Regulation, regardless of the HS code under which they fall. Whether the packaging material is listed on the invoice alongside the carried product is irrelevant; it is rather decisive whether the packaging would be classified jointly or separately in an import or export scenario (see rule 5b) of the General rules for the interpretation of the Combined Nomenclature). According to the rule 5b), packing materials and packing containers presented with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. Where packaging is or would be classified jointly with the carried product, it can be considered to be used exclusively as packaging material to support, protect or carry another product placed or made available on the EU market or exported from it.

Would the return of a relevant empty packaging by the retailer to its supplier be considered ‘making available on the EU market’ when the concerned packaging was placed on the EU market in its own right (i.e. standalone packaging) prior to the return?

As long as the concerned packaging, such as for example a pallet, is placed on or made available on the market or exported as a product in its own right (i.e. standalone packaging), rather than as packaging for another product, it is covered by the Regulation and therefore the relevant requirements apply (see Q. above). This should apply as long as the concerned packaging is used for commercial purposes in its own right.

However, once the concerned packaging becomes a packaging material used exclusively as packaging material to support, protect or carry a product, it is then not covered by the scope of the Regulation. This means that selling or renting used packaging material to other companies is not subject to EUDR, including packaging material that entered the EU under load (while supporting, protecting or carrying another product) and is subsequently sold. Similarly, empty packaging material already used for the first time to support, protect or carry another product, for instance when traded within a closed loop exchange system (i.e., pallets are transferred from one company to another to be reused for transport) is not covered by the Regulation. For additional information on renting of products, see FAQ 2.15. If packaging that has already been used to support, protect or carry another product is repaired and sold, it must comply with EUDR regarding only new relevant products used for the repair (e.g. a pallet that is repaired with non-recycled wood components). This means that, in the example, the vendor of a repaired pallet is considered an operator or downstream operator, depending on whether the newly added wood components have already been subject to due diligence previously or not.

Does trading with relevant second-hand products on the EU market fall in the scope of the Regulation?

Second-hand products which have completed their lifecycle and would be otherwise disposed of as waste (see Recital 40 and Annex I) are not subject to the obligations of this Regulation. More information on the exemption of used products and second-hand products will be provided in a draft Delegated Act published for public feedback on the Commission’s .

Does recycled paper/paperboard fall under the scope of the Regulation?

Most recycled paper/paperboard products contain a small percentage of virgin pulp or pre consumed recycled paper (for example, discarded paperboard scraps from cardboard box production) to strengthen the fibres.

Annex I states that the Regulation does not apply to goods if they are produced entirely from material that has completed its lifecycle and would otherwise have been discarded as waste as defined in Art. 3, point (1), of Directive 2008/98/EC. So, no obligations apply under the regulation to the recycled material.

On the contrary, if the product contains non-recycled material, then it is subject to the requirements of the Regulation and the non-recycled material will need to be traced back to the plot of origin via geolocation by the operator first placing such material or its components on the market. Annex I also clarifies that generally, by-products of a manufacturing process are subject to the Regulation. In the case of paper/paperboard which constitutes a recovered (waste and scrap) product, such paper and paperboard is exempt from the scope according to Annex I (see Chapter 47 and 48 of the Combined Nomenclature).

Are retreaded and used tyres subject to the Regulation?

In a draft Delegated Act published for public feedback, it is proposed that retreaded and used tyres are out of the scope of the Regulation. The draft Delegated Act, if it enters into force as proposed, would limit the obligations of the Regulation to placing, making available on the market or exporting of new rubber tread to be applied to tyre casings for the retreading process .

What are CN and HS Codes and how should they be used? Where can I find more information about applicable TARIC measures?

The nomenclature governed by the Convention on the Harmonized Commodity Description  and Coding System, commonly known as “HS Nomenclature”, is an international multipurpose nomenclature which was elaborated under the auspices of the World Customs Organization (WCO). This nomenclature assigns six-digit codes to classify goods and applies worldwide. Countries/regions can add additional numbers to the universal six-digit HS

Nomenclature for more detailed classification.

The Combined Nomenclature (CN code) of the European Union is an eight-digit commodity code that further subdivides the global HS Nomenclature into more specific goods to address the needs of the European Community.

The CN code is the basis for the declaration of goods for import into or export from the European Union, and also for intra-EU trade statistics. Commodities and products in Annex I of the Regulation are classified by their CN codes. Relevant products in Annex I of the Regulation are classified in the Combined Nomenclature set out in Annex I to Regulation (EEC) No 2658/87.

At import, when releasing goods for free circulation as defined in Art. 201 of the UCC  Regulation (EU) No 952/2013, the CN code can be further subdivided to a ten-digit TARIC code specifically created to address the needs of the EU legislation. When declaring goods for export procedure as defined in Art. 269 of the UCC Regulation (EU) No 952/2013, the final subdivision can go up to an eight-digit CN code.

Supply chain members need to classify their products based on Annex I to the basic CN  Regulation (Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff) to establish whether the Regulation applies to them. The HS codes can evolve every 5 years. The EU’s CN Regulation is adopted each year, to reflect any updates. The nomenclature codes mentioned in Annex I of the EUDR are those that were valid at the time of adoption of the Regulation. Amendments to these nomenclature codes through changes to the CN Regulation also apply directly to EUDR. See for more information: Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff.

An explanatory document with further information on the incorporation of EUDR measures in the integrated tariff system of the European Union (the TARIC database), including applicable TARIC exemptions that are introduced in TARIC, is available online

When is there a “supply” of a relevant product, meaning it is placed or made available on the market in the course of a commercial activity? To what extent are companies in scope when they use relevant products in their own business or process them?

A distinction has to be made between the person in the supply chain which imports or domestically places a relevant product on the EU market and persons further down the supply chain:

If a person places on the EU market a relevant product produced in the EU, it is thereby supplying the product on the market for the first time. A supply presupposes an agreement (written or verbal) between two or more legal or natural persons for the transfer of ownership or any other property right concerning the product in question; it requires that the product has been manufactured or that the commodity, if placed on the market without manufacturing, has been produced (see Art. 2(14) EUDR). Such an activity is relevant under the EUDR, no matter if the relevant product is placed on the market for a) the purpose of processing, b) distribution to commercial or non-commercial consumers or c) use in the business of the operator itself (see Art. 2(19) EUDR). The company is an operator and needs to exercise due diligence and submit a DDS (or a SD, if applicable).

If a relevant product is to be placed under customs procedure “release for free circulation” in the course of a commercial activity and not intended for private use or private consumption, it is assumed to be intended to be placed on the market, irrespective of a “supply” or irrespective of an agreement (written or verbal) between two or more legal or natural persons for the transfer of ownership or an equivalent right concerning the product in question.

After a product has been placed on the market, it is “supplied” on the market for distribution, consumption or use if there is an agreement between two or more legal or natural persons for a transfer of ownership or an equivalent concerning the product in question (e.g. a sale or a gift agreement) after the stage of manufacture (and production in the case of commodities) has taken place. The EUDR does generally not establish obligations on those who offer logistical services along the supply chain (e.g. shipping agents/transport agents or customs representatives are not ‘operators’, ‘downstream operators’ or ‘traders’ in the meaning of the EUDR) as far as they do not place products on the market or export. These situations may be explained by a few examples:

1) Car company B buys tyres made from natural rubber (relevant product) from EU supplier T to manufacture a car using the tyres. Car company B places the car (non- relevant product) on the market by selling it to end consumers. Car company B is not an operator or a downstream operator, as the car it is supplying on the market is not a relevant product in Annex I, nor a trader, as it is not supplying the tyres (individually)

– on the market.

2) Car company B imports (i.e., places under customs procedure “release for free circulation”) tyres to manufacture cars. Car company B is an operator when importing tyres for its own business operations. B needs to exercise due diligence and submit a DDS prior to the release for free circulation.

3) Farmer D buys soya bean meal (relevant product) from a crushing company inside the EU market and feeds it to his chicken (non-relevant product) which he then sells. D is not an operator when selling the chicken, as chicken are not a relevant product in Annex I, nor a trader, as he is not supplying the soya bean meal on the market. However, D would be an operator if he imported (i.e. placed under customs procedure “release for free circulation”) the soya bean meal to feed to the chicken (see above scenario 2).

In case the farmer feeds soya relevant products to cattle (relevant product) please see Recital 39 of Regulation (EU) 2023/1115 and FAQ 1.26.1. In the examples below, the persons process or use relevant products in their business. They are only subject to the Regulation in those cases in which they are supplying relevant products on the market:

4) Company A buys from retailer B in a third country and imports (i.e., places under customs procedure “release for free circulation”) wooden tables and seats (relevant products). The furniture will be used by A’s own employees during working hours. A is an operator and needs to exercise due diligence and submit a DDS prior to the release for free circulation of the wooden tables and seats.

5) Company D buys wooden tables and seats (relevant products) from EU operator B who has imported them from a third country and who has already carried out due diligence and submitted a DDS. Company D will use the furniture for its own employees during working hours. The furniture is not supplied, hence D is not subject to the EUDR.

6) EU-established farmer F harvests his own soy beans (relevant products) and processes the soy beans into soy flour (relevant product) which is used to feed his chicken at his own farm. As farmer F is not supplying the soy beans and soy flour on the market (for example, to another legal or natural person), they are not placed on the market and F is not subject to the EUDR.

7) EU-established farmer F harvests his own soy beans (relevant products) and processes them into soy flour (relevant product) which he sells to EU-established farmer G. Farmer F is an operator with regard to the soy flour, as it is being supplied to farmer G. Depending on the size of F’s farm, F might be considered a micro or small primary operator with limited reporting obligations (see FAQ 3.21).

8) EU-established company B harvests its own forest and processes the logs into wood  chips (relevant product) from the logs (relevant product). It uses the wood chips as fuel for heating its own facilities. As B is not supplying the logs or wood chips on the market, there is no placing or making available on the market and B is not subject to the EUDR.

9) Company C buys wood chips (relevant product) from an EU operator who has already carried out due diligence and submitted a DDS or a SD. Company C uses the wood chips as fuel for heating their own facilities. As C is not supplying the logs or wood chips on the market, there is no placing or making available on the market and C is not subject to the EUDR.

10) Company C buys wood chips (relevant product) from an EU operator who has already carried out due diligence and submitted a DDS or a SD. Company C uses the wood chips to produce electricity. As C is not placing or making available a relevant product on the market, C is not subject to the EUDR.

Which obligations arise if the same natural or legal person processes a relevant product multiple times in the course of their commercial activity?

In case of multiple occasions of internal processing (relevant product X is being processed into relevant product Y and subsequently into relevant product Z by the same company), EUDR obligations arise only for the placing on the market of the last relevant product (product Z). The obligations depend on whether the entity placing the last relevant product on the market is an ‘operator’ or a ‘downstream operator’. This can be demonstrated by the following examples:

1. Non-SME chocolate company C buys cocoa beans (relevant product) from EU operator I and processes them into cocoa powder (relevant product) and subsequently into food preparations containing cocoa (relevant product). Company C then places the food preparations on the market by selling them to company D. In this case, obligations apply only for the food preparations, so company C would be considered a downstream operator when placing the food preparations on the market (see FAQ 3.4 for obligations of downstream operators, and FAQ 3.10 for the question which companies are SMEs / non-SMEs under EUDR).
2. Non-SME timber company harvests wood in the EU and, within a different branch of the same company, processes it into pulp, selling the pulp on the EU market. The (physical) transfer of wood within the same legal entity for further processing does not constitute placing on the market, as there is no agreement (written or verbal) between two or more legal or natural persons for the transfer of ownership or any other property right concerning the product in question. Placing on the market only occurs when the pulp is supplied for distribution, consumption or use on the Union market in the course of a commercial activity, meaning due diligence has to be exercised by company T with regard to the pulp, as T is an (upstream) operator.