The EU Deforestation Regulation brings about sweeping changes and obligations for companies that market certain products within the EU or export them outside of the EU. The aim of this regulation is to reduce global deforestation rates by more strictly regulating the import and export of products that contribute to deforestation.

The EU Deforestation Regulation adopted on 31 May 2023 applies to companies that import or export commodities such as soy, palm oil, timber, rubber, cocoa, coffee and cattle, or products derived from them, into or out of the EU. These products are suspected of contributing to illegal deforestation and forest degradation. The regulation imposes strict due diligence requirements on companies to ensure that the products do not come from deforested areas.

According to the regulation, a raw material is considered to be deforestation-free if it does not come from areas that were deforested after 31 December 2020. Deforestation is defined as the conversion of forest areas into agricultural land.

By contrast, timber products are considered deforestation-free as long as no forest damage has occurred on the affected areas after this date.

The following applies to affected products: they are only considered deforestation-free if the raw materials, animal feed or components used can also be proven to have been produced without deforestation.

The regulation forces companies to fully review and document their supply chains. A central element is the proof of the relevant products’ deforestation freedom. Companies must ensure that the products they use do not contribute to deforestation or forest degradation. This includes:

• Due diligence: Companies must prove that the products they place on the EU market are not linked to deforestation by means of a comprehensive due diligence process. This includes precise information on the origin of the products and evidence of sustainable cultivation or production methods.
• Risk assessment and documentation: Companies must conduct a risk assessment of their supply chains and document the results. Products identified as risky must not be imported into the EU.
• Gathering information: For most of the products concerned, information such as raw material, CN code, quantity, country of production and geolocation coordinates must be provided.

A compliance lawyer may help companies to comply with all requirements.

The Deforestation Regulation affects a wide range of industries, including food, wood and paper products, cosmetics and textiles. In particular, companies that source raw materials from tropical regions will face tighter controls.

SMEs are affected just as much as large companies. Although smaller companies will receive some relief in fulfilling their due diligence obligations, the regulation is mandatory for all market participants.

Companies that fail to comply with the requirements of the Deforestation Regulation face significant sanctions. These include fines of up to 4% of annual turnover and import bans, which can vary depending on the severity of the violation. It is therefore essential for companies to act proactively and adapt to the new legal requirements.

The EU Deforestation Regulation has been criticised, particularly by agriculture ministers from several EU countries. One key point of criticism is the planned risk assessment of the countries of origin. Since no official classification exists to date, the EU would have to treat all producing countries equally according to the rules of the World Trade Organization (WTO) – including the 27 EU member states. This means that even countries with a low risk of deforestation, such as Germany, would have to meet the strict requirements that are actually intended for high-risk countries. This could lead to unnecessary bureaucratic burdens for European raw material producers and complicate international trade. Critics also fear that the regulation will make it considerably more difficult for small producers to access the EU market and that it does not sufficiently differentiate between sustainable and risky producing countries.

There are also more and more voices calling for a postponement of the law’s application deadline, as it can no longer be implemented in the short time remaining before the end of the year, 30 December 2024.

Accomplie helps companies to efficiently implement the requirements of the Deforestation Regulation. We offer comprehensive advice, practical training for effective compliance, and support during implementation. With our expertise in the area of product compliance, we ensure that your company meets all legal requirements and minimises the risk of violations.

Our services at a glance:

Practical training for effective compliance

• Step-by-step guidance: We guide you through every requirement of the EU Deforestation Regulation so that you know exactly what to do.

• Practice- and result-oriented: We provide concrete examples and best practices to efficiently implement the regulation in your operations.

• Customised: We tailor the training to the specific needs and structures of different companies.

• Time and cost efficiency: Our training courses are designed to provide maximum benefit in a short time, without disrupting operations.

• Long-term support: We not only provide training, but also ongoing advice and support in implementing and monitoring the regulation.

Support with implementation:

• Determining the scope of application

1. 1. • Relevant raw materials and products
      • Size of the company, i.e. SME or non-SME
      • Role of the company, i.e. market participant or distributor

• Analysis of the specific obligations in relation to the various products

• Support with communication with suppliers

1. 1. • Preparation of suppliers for EUDR legal requirements
      • Design and evaluation of questionnaires

• Advice on suitable software

• Conducting risk analysis (with the help of software if necessary)

• Development of suitable preventive and remedial measures in line with a risk-based approach

• Drafting of due diligence statements

• Advice on tactical procurement strategies