Tiếng Việt
Question
Is there a separate due diligence statement per sales order or per supplier within the supply chain? Sales orders may contain products from multiple suppliers where a distribution partner is used. Do I need to include the reference numbers of all relevant due diligence statements from each supplier?
To answer this question, we should first look at the definition of a due diligence statement. Even though, EUDR does not provide a definition of what a due diligence statement is. In Annex II of the Regulation, it clearly specifies what information and requirements are required to be included in the statement.
More specifically, you can look at the FSC’s definition of due diligence statement as follows: “Due diligence statement is a document confirming the implementation of a due diligence system by the operator, which encompasses information collection, risk assessment, and risk mitigation measures in accordance with Regulation (EU) 2023/1115 of the European Parliament and of The Council of 31 May 2023. The statement affirms that the operator has conducted due diligence to ascertain that either no risk or only a negligible risk has been identified concerning the compliance of the relevant products in adherence to Article 3, point (a) or (b), and Article 4(2) and 8; of the Regulation (EU) 2023/1115 of the European Parliament and of the Council of 31 May 2023.”
Back to the question, the due diligence statement requirements are applied per sales order or batch of imported/ exported/ traded relevant commodities.
According to the EC FAQs, the Regulation requires that operators (or traders which are not SMEs) trace every relevant commodity back to its plot of land before making a relevant product available or placing it on the market, or before exporting it.
In simple words, the reason why a due diligence statement is required for each batch of imported, exported/traded relevant commodities is to enable traceability. Traceability to the plot of land is necessary to demonstrate that there is no deforestation occurring on a specific location. The geographic coordinates are required to be included in the due diligence statements that operators are required to submit to the Information system ahead of the placing on the market or export of the products.
In addition, the due diligence statement also contains a statement confirming that the companies have exercised due diligence and be able to conclude that the relevant commodities have been produced in accordance with the relevant legislation of the country of production.
Therefore, if the due diligence statement is applied per supplier (i.e. company), it would not be able to demonstrate the (1) deforestation-free and (2) legality requirements. The company may purchase its commodities/products from multiple suppliers, especially for companies in the middle or at the end of the supply chain. Even if the company sources its raw materials from only one supplier, there is a possibility that the raw materials are produced on different plots of land with different geographical coordinates.
Now the question is extended to a sale order containing products from multiple suppliers where a distribution partner is used. Do I need to include the reference numbers of all relevant due diligence statements from each supplier?
The answer is YES. Same logic as above, if we do not include the reference number of all relevant due diligence statements from each supplier, there is a risk of mixing commodities or products of unknown origin or from areas deforested or degraded after the cut-off date of 31 December 2020. As a result, we cannot ensure that the products are traceable and comply with the requirements of Article 3 of the EUDR. Therefore, it shall not be placed and made available on the Union market.
