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WHAT IS THE EUDR DUE DILIGENCE PROCESS? 

To ensure compliance with the EU Deforestation Regulation (EUDR), companies will have to carry out a multi-step due diligence process which includes: data collection, risk assessment, and risk mitigation. This means businesses must collect detailed, real-time data about their products, including geolocation and evidence of being deforestation-free. They must also assess risks based on factors like deforestation, land rights, and supply chain complexity, updating this assessment annually. If risks are found, companies need to mitigate them through additional data collection, surveys, or audits.

THE DEFORESTATION DUE DILIGENCE STATEMENT REGISTRY

The Deforestation Due Diligence Statement Registry is an online tool, published by the European Commission (EC), to assist with EUDR due diligence statements. The Registry allows operators, traders and their representatives to make electronic Due Diligence Statements, and submit them to the relevant authorities to show that their products did not contribute to deforestation. It’s comprised of the following capabilities:

Submit Electronic DDS:

Operators, traders, and their representatives can submit due diligence statements to relevant authorities.

Indicate Product Origins:

  • Draw areas on a map or provide coordinates individually or in bulk using the GeoJson standard format.
  • Options are available for uploading, copying, or re-using location information.

Provide Product Details:

  • Select the product type and indicate characteristics such as quantity and volume.
  • Operators further down the supply chain can refer back to previously created statements.

Manage DDS:

  • Use the dashboard to view and manage due diligence statements, with status updates provided as statements are processed by authorities.
  • Large operators can manage DDS in bulk using a machine-to-machine API connection to the Registry.

Registration to use the system will begin in November 2024 and the system will be opened to all users in December 2024. EUDR compliance softwares, such as OPTEL’s Optchain, are already in process of connecting their platform to the Deforestation Due Diligence Statement Registry online tool.

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THE EUDR SYSTEM PILOT  

Last year, the Pilot Testing of the Deforestation Information System began and ran until the end of January, involving 100 stakeholders from various commodities, operators of different sizes, and geographically balanced participants.

The testing phase provided feedback to ensure the system’s user-friendliness. Amongst the suggestions were:

  • More precise error messages to guide users.
  • An option to withhold geolocation information from downstream operators referencing the DDS.
  • Improved processing times
  • A streamlined process to be completed in less than 10 clicks.
  • The full availability of the in-scope HS-code list and a Supplementary Unit qualifier, with the Scientific Name mandatory only for commodities containing wood.

The above suggestions are being implemented and as a result of all the testing, the GeoJson file format will be used for importing geolocation data, requiring coordinates in the WGS84 standard with the EPSG:4326 projection system. Geolocation files are to be provided per commodity, with a size limit of 25 MB per DDS. Additional properties such as Producer Country, Producer Name, Production Place Name, and area (in hectares) can be added to the geolocation data. For large geolocation datasets, the user interface will not display them due to practicality issues.

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EUDR SYSTEM FREQUENTLY ASKED QUESTIONS

How long should documentation be kept?

Operators should collect, organize, and keep records of the due diligence statements for five years from the date of placing the product on the market or exporting the product.

How can I manage statements in bulk?

If you are a large operator dealing with many products and suppliers, you will be able manage your Due Diligence Statements in bulk using a machine-to-machine connection to the Registry via an Application Programming Interface (API).The latest versions of technical specifications for the API can be found here.

How can Economic Operators perform an API test for submitting Due Diligence Statements to the EUDR system?

Economic Operators can perform an API test for submitting Due Diligence Statements (DDS) by following the guidelines and technical documentation provided by the European Commission. Detailed instructions, including API specifications, testing procedures, and integration steps, are available on the European Commission’s CIRCABC platform. For more information, please refer to the documentation on the European Commission’s website.

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What happens if there is a discrepancy in the submitted data?

If a discrepancy is found in the submitted data, the relevant authorities will notify the operator to rectify the issue. Operators may need to provide additional documentation or make corrections to their Due Diligence Statements to ensure compliance.

How can private companies develop software to assist Economic Operators in submitting DDS to the central EUDR system, and what is the role of Participants acting on behalf of other Operators?

Private companies can develop specialized software to help Economic Operators (EOs) comply with the requirements of the EU Deforestation Regulation (EUDR), particularly in submitting Due Diligence Statements (DDS) to the central EUDR system. This software can streamline the complex process of data collection, validation, and submission, ensuring that all necessary geolocation and product compliance information is accurately reported. Features may include automated data entry, integration with geolocation tools, compliance checks, and direct submission capabilities to the EUDR Information System.

Participants, such as OPTEL, who act on behalf of other Operators, play a crucial role in this ecosystem. These Participants can use the developed software to manage the due diligence processes for multiple clients, ensuring that each client’s DDS is correctly prepared and submitted. This arrangement benefits EOs, especially those unfamiliar with the regulatory requirements, by outsourcing their compliance tasks to experts. Participants ensure the accuracy and completeness of the submitted information, reducing the risk of non-compliance and associated penalties. By leveraging the expertise of these Participants and the efficiency of specialized software, EOs can focus on their core business operations while meeting EUDR obligations effectively.

WANT TO LEARN MORE?

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