EUDR- Annual Submission of the Due Diligence Statement

Summary: 

This post explains one of the key changes introduced in the updated EU Deforestation Regulation (EUDR) FAQs and Guidance (April 2025): the shift from requiring a due diligence statement (DDS) for every shipment or batch to allowing an annual DDS covering multiple shipments. It explores the legal requirements, practical implications, and compliance challenges of this new approach, particularly regarding traceability, volume matching, and supply chain coordination.

Background: 

On 15 April 2025, the European Commission released updated documents to support the implementation of the EU Deforestation Regulation (EUDR): FAQs version 4 and Guidance version 2. Alongside these, the Commission also published a proposed Delegated Regulation, currently open for public consultation until 13 May.

These measures aim to simplify compliance, reduce administrative burdens, and are expected to lower administrative costs by around 30%, contributing to a simpler, fairer, and more cost-efficient application of the Regulation.

This post continues the discussion of the key changes introduced in the April 2025 updates, focusing on the shift to annual submission of due diligence statements (DDS).

The previous post explored the reduced due diligence obligations for downstream non-SME operators and traders; you can read it here.

Part 2: Annual submission of the Due Diligence Statement (DDS)

One of the most significant simplifications in the latest updates, beyond easing due diligence obligations, is the change allowing operators to submit due diligence statements annually, replacing the previous requirement to submit a statement for every shipment or batch placed on the EU market.

According to FAQ 5.19, an annual DDS can cover multiple physical batches or shipments of various relevant products. To use this option, the operator (or non-SME trader) must confirm that due diligence was carried out for all covered products, and that no or only negligible risk was identified.

However, this flexibility comes with key legal requirements and practical considerations, for example:

• The quantity of products placed on, made available on, or exported from the EU market must be fully covered by a DDS (Art. 3(c) EUDR).
• The DDS must be submitted before any batches or shipments are placed on the market or exported (Art. 4(2) EUDR).
• Once the declared quantity has been fully placed on the market or exported, a new DDS is required for additional quantities.
• A DDS cannot cover shipments or batches over a period longer than one year from the date of submission.
• When covering multiple batches or shipments under one DDS, operators face increased complexity and potential compliance risks, particularly regarding accurate volume matching and traceability.

The Regulation emphasizes that the quantities declared in the DDS must match the quantities that underwent due diligence. A product cannot be covered by multiple DDSs from the same operator. Operators must keep records for five years to demonstrate this correspondence and explain any discrepancies (Art. 9 EUDR).

Important Clarifications from the Updated FAQs

The updated FAQs provide valuable clarification on how DDS coverage and timing work:

✅ A DDS should cover commodities that have already been produced—grown, harvested, raised, or obtained from relevant plots or establishments. For example, in the case of wood products, the trees should already have been harvested at the time of DDS submission, but the finished product (e.g., furniture) does not need to have been manufactured yet.

✅ If an operator doesn’t know at the time of submission whether products will be sold domestically or exported, it is permissible to declare all quantities under an “export” DDS, as long as documentation supports this decision.

✅ According to FAQ 5.20, the latest date for submitting a DDS is before the product is placed,  made on the market, or exported. For EU-produced commodities, placement occurs when the product is both physically available and supplied on the market for distribution, consumption, or use, and an agreement to supply has been finalized.

✅ The earliest submission date for a DDS is when due diligence has been exercised or ascertained, and all necessary information—including quantities—is available (FAQ 5.21).

Practical Implications and Open Questions

While the shift to an annual DDS offers administrative relief, it raises important questions about traceability and compliance risks:

🔍 How can traceability be maintained if the DDS is no longer tied to individual shipments or batches? In long and complex supply chains, consolidating multiple shipments under one DDS increases the challenge of preventing mixing or substitution of non-compliant products.

🔍 Could delayed DDS submissions create bottlenecks for downstream operators and traders? Since downstream non-SME operators and non-SME traders must submit their DDS before placing products on the market or exporting them, they depend on upstream operators to submit DDS in a timely manner. In complex global supply chains, waiting until year-end could delay downstream compliance obligations. However, market demands may naturally incentivize earlier submissions.

🔍 How will volume matching and traceability be ensured for products not yet manufactured at the time of DDS submission? Especially for composite products, ensuring that declared volumes align with due diligence findings across multiple processing stages may pose practical challenges.

🔍 How will temporary gaps in due diligence coverage be addressed? For example, SME operators and traders are not required to submit DDS until June 2026, creating a temporary gap in traceability and due diligence documentation across parts of the supply chain.

Conclusion

The updated EUDR guidance offers greater flexibility through the option of annual DDS submission, aiming to reduce compliance burdens. Yet this shift introduces new operational and compliance challenges—particularly regarding traceability, volume matching, and coordination across supply chains.

As companies adapt to these changes, they will need robust systems to ensure that due diligence requirements are still met at the batch level (FAQ 1.2, Recital (39)) and that documentation aligns with both legal obligations and the expectations of trading partners and competent authorities when requested.

👉 Have you started preparing for these changes in your due diligence systems? What challenges do you foresee in implementing the annual DDS option?