On 29 June 2023, the European Union Regulation against Deforestation Regulation (EU) 2023/1115 of the European Parliament and of the Council of 31 May 2023 on the making available on the Union market and exports from the Union of certain goods and products related to deforestation and forest degradation and repealing Regulation (EU) No 995/2010) entered into force.
Its aim is to combat deforestation and forest degradation, and consequently to reduce global greenhouse gas emissions and protect biodiversity. The provisions apply to operators who place on the market or export from the Union certain goods (the so-called relevant goods), i.e.
- Cattle,
- Cocoa,
- Coffee,
- Oil palm,
- Rubber,
- Soy,
- Timber,
and products derived from them (relevant products - the full list of CN codes of products is set out in Annex I to the Regulation).
According to the Regulation, relevant goods and products cannot be placed on the market, made available on the market or exported from it, unless they meet all of the following conditions:
a) they do not cause deforestation
b) they have been produced in accordance with the relevant laws of the country of production and
c) a statement of due diligence has been submitted in respect of them.
As a result, before placing them on the market or before exporting or making them available on the market, entities are obliged to exercise due diligence and submit an appropriate statement in this respect.
According to the Regulation, due diligence consists of:
a) collecting information, data and documents necessary to comply with the requirements set out;
b) risk assessment measures;
c) risk mitigation measures.
The obligations arising from the Regulation apply directly from 30 December 2024, with the exception of micro and small enterprises established by 31 December 2020, which will be subject to the new requirements from 30 June 2025.
The penalties provided for non-compliance with the obligations arising from the Regulation include, inter alia:
- a fine of up to 4 % of the total annual turnover achieved in the whole Union in the financial year preceding the decision to impose the fine;
- confiscation of the relevant products;
- confiscation of the income obtained from transactions involving the relevant products;
- temporary exclusion for a maximum period of 12 months from public procurement procedures and from access to public funding, including tendering procedures, grants and concessions;
- temporary prohibition on placing on the market or making available the relevant goods and the relevant products on the market or exporting the relevant goods and the relevant products.
If you are interested in analysing your obligations under the above regulations and preparing for their application, you are kindly invited to contact us.
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