Tiếng Việt
Summary:
This article highlights the major simplifications introduced in the updated EUDR FAQs (v4) and Guidance (v2) published on 15 April 2025, focusing on reduced due diligence (DD) obligations for downstream non-SME operators and traders.
Background
On 15 April 2025, the European Commission released the updated EUDR FAQs (v4) and revised Guidance (v2), aiming to further simplify and reduce the administrative burden of the EUDR’s implementation.
The new documents, along with a proposed Delegated Regulation (open for public consultation until 13 May), are expected to reduce administrative costs by approximately 30%.
These updates seek to ensure a simpler, fairer, and more cost-efficient application of the legislation.
Part 1: Key Changes and Simplifications
(Part 2, covering the annual submission of the Due Diligence Statement, will be published soon.)
1. Dropping Due Diligence Obligations for Downstream Non-SME Operators and Non-SME Traders
Originally, non-SME operators and non-SME traders were required to carry out full due diligence (DD) before placing, making available, or exporting relevant products. This involved:
(1) Information collection
(2) Risk assessment
(3) Risk mitigation (steps 2 and 3 are not required in cases eligible for simplified DD, under Article 13)
The purpose was to ensure that products were:
(a) Deforestation-free
(b) Produced in compliance with the relevant legislation of the country of production
(c) Covered by a due diligence statement (DDS)
What changed?
The updated rules introduce a distinction between upstream and downstream non-SME operators.
Now, Downstream non-SME operators (and non-SME traders) are no longer required to perform full due diligence. Instead, they must only:
- Ascertain that due diligence was exercised upstream (in accordance with Article 4(9) EUDR),
- Submit a Due Diligence Statement (DDS) referencing the upstream DDS, including the relevant reference and verification numbers provided by their direct suppliers.
✅ Non-SME traders are explicitly subject to the same simplified obligations.
2. Simplified Requirements for Ascertaining Upstream Due Diligence
The FAQs (v4, Question 3.4) outline that downstream non-SME operators and non-SME traders now only need to:
- Collect the reference and verification numbers of the upstream Due Diligence Statements (DDS),
- Verify the validity of the reference and verification numbers, a process that can be completed easily and automatically via the EU Information System.
Consistency Concerns:
EUDR texts
Under Article 4(10) of the EUDR, operators referencing a previously submitted DDS still retain responsibility for ensuring that the relevant commodities and products are compliant by confirming that no or only negligible risk was identified before placing them on the market or exporting them.
According to Article 2(26) and the EUDR guidance, achieving a negligible risk requires conducting a full assessment of product-specific and general information, and where necessary, applying the appropriate mitigation measures to conclude that the relevant commodities and products pose no concern for causing deforestation and comply with the relevant legislation of the country of production.
EUDR guidance
In addition, even if no full DD obligations are required, the EUDR guidance provides additional considerations for ascertaining proper upstream due diligence to ascertain that DD was carried out, as follows.
“Ascertaining that due diligence was properly carried out may not necessarily imply having to systematically check every single due diligence statement submitted upstream. For example, the downstream non-SME operator could verify that upstream operators have an operational and up-to-date due diligence system in place, including adequate and proportionate policies, controls, and procedures to mitigate and manage effectively the risks of non-compliance of relevant products, to ensure that due diligence is properly and regularly exercised.”
There is a clear inconsistency and progressive simplification in the requirements for ascertaining that due diligence has been exercised, spanning from the regulation itself to the guidance and, most notably, the FAQs, where the requirements are at their most simplified. Given these new measures, I have some reservations about whether the approach outlined in the FAQs will be sufficient to ensure that the relevant commodities and products present no risk of contributing to deforestation.
In Summary:
- Downstream non-SME operators and non-SME traders are no longer required to conduct full due diligence under Articles 9, 10, and 11 of the EUDR.
- Their main obligations now are to:
- Collect upstream DDS reference and verification numbers
- Verify their validity
- Submit their own DDS referencing the upstream DDS.
- If parts of the supply chain have not been previously subject to due diligence, full DD obligations still apply.
———————————————————————————————————-
Definition Reminder: What is a Downstream Operator?
According to FAQs v4, Question 3.4:
“Downstream operators are those who place on the market or export relevant products listed in Annex I whose components or ingredients (all of them) have previously been subject to due diligence under EUDR and have been the object of a due diligence statement submission. For example, a furniture manufacturer that sells wooden furniture made of wood that has already been subject to EUDR obligations would be considered a downstream operator. Their obligations vary depending on whether they are Small and Medium-sized Enterprises (SMEs) or not.”
