The entire process of data collection, risk assessment and risk mitigation – with the aim of demonstrating a negligible risk for a product. The visible outcome is the due diligence statement.
Only once due diligence has been fully carried out and a negligible risk has been established may an affected product be placed on the EU market or exported.
The three steps of due diligence
The EUDR breaks down due diligence into a clear three-step process:
- Data collection: gather all the necessary information – including product details, HS code, country of production and the geolocation coordinates of the plot of production.
- Risk assessment: check whether the product is deforestation-free and was produced legally, and assess the risk on the basis of country and supplier factors.
- Risk mitigation: where the risk is not negligible, take additional measures – such as obtaining further evidence or auditing suppliers.
What does "deforestation-free" mean?
A central assessment criterion is that the plot on which the raw material was produced was not deforested after 31 December 2020. In addition, production must have been legal, that is, in accordance with the laws of the country of production. Both together are assessed as part of the risk assessment.
Operator and trader – where is the difference?
The EUDR distinguishes two roles, and the scope of the obligations depends on this.
| Role | Scope of obligation |
|---|---|
| Operator (first to place on the market) | full due diligence including own statement |
| Large trader / downstream business (non-SME) | no statement of their own; register in TRACES, keep reference numbers, check on concern |
| Small trader (SME) | reduced: pass on and document reference numbers |
An operator is anyone who places a product on the EU market for the first time or exports it, excluding downstream operators – for example an importer, a forest owner making a direct sale, or a business that imports timber itself. A trader merely passes on a product that has already been placed on the market and files no statement of their own. Large traders (non-SMEs) must, however, register in TRACES, keep reference numbers and check where there is substantiated concern; small traders within the meaning of the SME definition have reduced obligations. The respective sector pages show how this plays out in the day-to-day work of the timber trade.
Tip: First clarify your role. Whether you are an operator or a trader – and whether you are an SME – determines whether you have to submit your own statement or merely pass on numbers.
Relationship to other obligations
At the end of due diligence stands the due diligence statement, which is submitted via TRACES NT. Certificates such as FSC or PEFC do not replace due diligence, but they can ease the risk assessment. All evidence must be retained for five years and presented to the BLE on request.