The EUDR is a new breed of EU legislature insofar as it is able to render a business utterly incapable of continuing its operations unless all requirements are met. It is therefore critical for companies to master it before it comes into effect, or they can literally be forced to close down.

Arguably, the most difficult part about this Regulation is understanding exactly it expects you to do. Actually doing it is not easy, per se, but much more fathomable.

If you are still trying to understand whether or not it applies to you, please refer to our publication on that topic.

Once you know whether you are a Trader or an Operator, you should begin working on your due-diligence system.

For SME Traders this means putting all of your suppliers of a list, figuring out which ones supply you with affected goods, and contacting them to see how far along they are. You should have them sign a declaration that their due-diligence and subsequent risk assessments are not pro-forma, that they are to only provide you with information that is, to their knowledge, truthful and full. From there on, you are required to have the numbers of their approved Due-Diligence Statements (DDSs) for every shipment you receive from them and store them for a minimum of five years in a database of your choosing.

That’s it.

It is not a terribly difficult thing to do and should not take much effort as long as you find a way to effectively organize these communications. In case you feel lost or have any questions about the supplier declarations or the DDS numbers – contact us and we’ll help you out.

Now onto the beast that Operators and non-SME Traders have to tackle – full Due-Diligence.

For Operators and non-SME Traders, the EUDR due diligence system is a robust, three-step process that must be continuously maintained and is subject to official audits. This is not a one-time check, but an ongoing system to ensure compliance.

Step 1: Information Gathering (Surveys)

This is the foundation of your entire due-diligence system. For every relevant product you place on the EU market or export, you must collect a wide range of information to prove it is deforestation-free and legally produced. This includes:

• Product and Supply Chain Details: A full description of the product, including its common and scientific names, the relevant Harmonized System (HS) code, and the quantity.
• Country of Production: The country where the commodity was grown or harvested.
• Geolocation Data: This is the most challenging requirement. You must have the precise geolocation of all plots of land where the raw materials were produced. This means:
• Point coordinates (latitude/longitude) for plots of land smaller than four hectares.
• Polygon mapping (a defined boundary) for plots of land four hectares or larger.
• Production Dates: The date or time range of production.
• Proof of Legality: You must collect verifiable information that the product was produced in accordance with all relevant laws of the country of origin, including those related to land use, environmental protection, and human rights.

Step 2: Risk Assessment

Once you have gathered the data, you must conduct a thorough risk assessment to determine if there is a “negligible risk” of non-compliance. This is not a simple yes/no. You must analyze the collected data in light of various factors, including:

• The country’s risk classification (low, standard, or high) as determined by the European Commission.
• The prevalence of deforestation or forest degradation in the area of production.
• The complexity of the supply chain.
• The existence of reliable third-party certifications or schemes.
• Any substantiated concerns about the history of non-compliance of your suppliers.

If your assessment concludes that the risk is not negligible, you cannot proceed to place the product on the market without moving to the next step.

Step 3: Risk Mitigation

If a non-negligible risk is identified in Step 2, you must take adequate and proportionate measures to reduce that risk to a negligible level. This could involve:

• Requesting additional documentation or evidence from your suppliers.
• Hiring an independent third-party to conduct on-the-ground surveys or audits.
• Using satellite imagery and other monitoring tools to verify the “deforestation-free” status of the land.
• Terminating your relationship with a supplier if you cannot mitigate the risk.

Only after these steps have been completed and you have determined that the risk is negligible can you submit the Due Diligence Statement (DDS).

Submitting the Due Diligence Statement (DDS)

The final step for Operators and non-SME Traders is to submit a DDS for every shipment through the EU’s TRACES system. This is a legally binding declaration that you have completed your due diligence and that the product is compliant. The DDS contains the collected information, including geolocation data, and receives a unique reference number that must be provided to customs and to downstream traders.

Mastering the EUDR is an organizational undertaking. It requires a dedicated system for data collection, a rigorous process for risk assessment, and a clear plan for risk mitigation. The most successful companies will integrate these procedures into their core business operations, not just treat it as a box-ticking exercise.

Hundreds of companies are already using a one-stop and totally frictionless EUDR solution to conduct their risk assessments and be ready for the looming deadline of 30 December 2025 when DDSs have to start flying over to the EU TRACES system. With n’entropy, you stay compliant and never have to leave your dashboard again. Contact our team of professionals for a free consultation and join the family today.