New Regulation on Deforestation-free products

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International shipments towards a greener goal

To fight climate change and biodiversity loss, the new European Regulation (EU) 2023/1115 of the European Parliament obliges companies to ensure products sold in the EU have not led to deforestation and forest degradation.

The new EU Deforestation Regulation (2023/1115/EU) will impose due diligence obligations from 30 December 2024 aimed at tackling deforestation and forest degradation. The Regulation will require companies dealing in in-scope products to undertake due diligence into the source of a wide range of commodities, including cattle, cocoa, coffee, palm-oil, rubber, soya and wood, to ensure that they have not been obtained as a result of deforestation.

In addition to raw materials, the Regulation also applies to products listed in Annex I to Regulation (EU) 2023/1115 which contain or have been nourished or manufactured using the above-mentioned relevant raw materials, for example leather, chocolate, furniture, oils and tyres.

How to Conduct Information Gathering and Risk Assessment

Prohibitions under Art. 3

Article 3 allows the placing and making available on the Union market or exporting of relevant commodities and relevant products, only if they are:

  • deforestation-free;
  • produced in accordance with the relevant legislation of the country of production;
  • covered by a due diligence statement

Due Diligence

Operators must implement a due diligence system that includes:

  • Information collection: as step one operators need to collect the information referred to in Article 9, such as the commodity or product which they intend to place on the market or export, including under customs procedures ‘release for free circulation’ and ‘export’, as well as the respective quantity, supplier, country of production, evidence of legal harvest, among others. A key requirement, in this step, is to obtain the geographic coordinates of the plots of land where the relevant commodity was produced and to provide relevant information – product, CN code, quantity, country of production, geolocation coordinates – in the due diligence statement to be submitted via the Information System.
  • Risk Assessment: in step two, companies will need to feed the information gathered under the first step into the risk assessment pillar of their Due Diligence Systems to verify and evaluate the risk of non-compliant products entering the supply chain, taking into account the criteria described in Article 10. Operators need to demonstrate how the information gathered was checked against the risk assessment criteria and how they determined the risk.
  • Risk Mitigation Measures: in step three, they will need to take adequate and proportionate mitigation measures in case they find under step two more than a negligible risk of non-compliance in order to make sure that the risk becomes negligible, taking into account the criteria described in Article 11. These measures need to be documented.

Due diligence declarations will be recorded in a specific information system that the commission will establish by 30 December 2024.

We would like to point out that an Implementing Regulation has not yet been issued and that we will inform you as soon as there are more precise instructions regarding the application of Regulation (EU) 2023/1115.

 

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