On October 1st, the European Commission published a practical guide containing guidelines and an international cooperation framework, as well as proposed a one-year postponement of the phasing-in period for the Regulation (EU) 2023/1115 on deforestation-free products  (“Regulation” or “EUDR”). Initially, the Regulation was set to become mandatory from December 30, 2024, and for micro and small enterprises from June 30, 2025.

If approved by the European Parliament and the Council, the proposal will make the Regulation applicable from December 30, 2025, for large companies, and from June 30, 2026, for micro and small enterprises.

According to the EUDR, any operator or trader placing raw materials (such as cattle, wood, soy, coffee, rubber) or their derivatives (such as leather, chocolate, tires, furniture) within the EU market, or exporting them from it, must provide geolocation data proving that (i) the products originate from areas that have not been deforested, either illegally or legally, after the cut-off date of December 31, 2020; (ii) that they have been produced in accordance with the relevant legislation of the country of production; (iii) and that they are covered by a due diligence statement.

According to the Commission, given the complexity of the adaptation process, the one-year postponement serves as transitional period aimed at ensuring the proper implementation of the Regulation. This reflects the Commission recognition of the growing concern of stakeholders about their state of preparedness, which has been expressed on several occasions by affected developed and developing countries, including Brazil, and reiterated during the United Nations General Assembly in New York in September.

Practical Guide and FAQ: New Technical Guidelines

The practical guide released by the Commission is divided into 11 chapters and covers various issues, including information to facilitate the application of rules, clarifications on geolocation and legality requirements, as well as information systems that can be used to trace products from their origin to their final destination in the EU.

Additionally, the guide addresses the application of the Regulation for different categories of companies, providing a reference map to assist operators and traders in interpreting and implementing all the new rules.

Another resource provided by the Commission is the new Frequently Asked Questions (FAQ) section, which contains over 40 questions and answers regarding the operators’ obligations. Among the issues addressed are clarifications on definitions such as “forest degradation” and “operator,” as well as information on the geolocation system and the documents required to demonstrate compliance with the EUDR.

Despite these guidelines, there remain points of uncertainty, such as the lack of a clear methodology to classify countries as “high,” “low,” or “standard risk.” This classification will be crucial in determining the rigor of monitoring and the additional tracking obligations for countries with a higher risk of deforestation.

For now, it is known only that this methodology is still under development and will be further presented at future meetings of the Multi-stakeholder Platform on deforestation. The due diligence model and methodology are still under discussion and development, and it is not yet clear who will be formally authorized to carry it out — an aspect that needs to be further detailed to enable effective compliance with the Regulation and provide greater legal certainty for all stakeholders.

Postponement Advantages

The postponement represents good news and an opportunity for exporting markets to negotiate adjustments to the Regulation’s text, aligning it with their national laws and realities. It also provides additional time for the adaptation of supply chains, without the pressure of immediate penalties. However, the transition period should not be viewed as a definitive solution, as the Regulation presents various technical challenges that will need to be overcome, particularly for countries that are likely to be classified as high-risk, such as, it seems, Brazil.

Nasser Advogados has a highly qualified team of specialists to guide and assist in all matters related to this issue.