Regulation (EU) 2023/1115, known as EUDR, promises to transform not only the European market but also the global one by introducing new standards for forest protection and sustainable supply chains. With its application postponed to December 30, 2025, for large companies, and June 30, 2026, for micro and small enterprises, operators, traders, and exporters now have a valuable window of time to understand the requirements and adequately prepare.
The regulation covers key commodities and products listed in Annex 1, such as cocoa, coffee, palm oil, soy, timber, rubber, and beef, along with derived products like furniture, paper, and chocolate. This focus reflects a commitment to mitigating the deforestation driven by agricultural and industrial expansion.
In this article, we’ll explore:
- The difference between a Due Diligence Statement and Due Diligence
- Types of Due Diligence Statements
- Contents of a Due Diligence Statement
- Submission procedures for a Due Diligence Statement
- System-Generated Codes
- How Trusty manages Due Diligence Statements
Due Diligence Statement and Due Diligence: What’s the Difference?
The Due Diligence Statement (DDS) is a mandatory step for operators and traders (non-SMEs) before importing or placing on the market any raw material or product included in Annex 1 of the regulation. This statement should not be confused with the due diligence process itself: while the former is the final and formal output of an analytical process, the latter represents the risk assessment process along the supply chain.
Operators or traders (non-SMEs) are required to thoroughly verify suppliers and products, ensuring that the risk of deforestation or forest degradation is either negligible or nonexistent. Only then can they proceed with compiling the DDS, an official document attesting to compliance with regulations and guaranteeing the legality of commercial operations.
Types of Due Diligence Statements
DDS for import
For import declarations, it is mandatory to include geographic files certifying the product’s origin. These files must be verifiable and compliant with the technical specifications outlined in the regulation.
DDS for market placement or exportation
For declarations related to placing products on the market or exporting them, companies can rely on DDSs provided by their suppliers. This approach simplifies compliance and enhances transparency across the supply chain.
Contents of a Due Diligence Statement
The information required in the DDS is detailed in Annex 2 of the regulation and includes:
Operator Data:
- Name, address, registration number, and Economic Operators Registration and Identification (EORI) number, in accordance with Regulation (EU) No 952/2013, if applicable.
Activity Type:
- Import: relevant products will enter the EU market and be declared for “release for free circulation” at customs authorities.
- Domestic Production: relevant products are produced or manufactured within the EU.
- Export: relevant products will leave the EU market and be declared for “export” at customs authorities.
Product Details:
- Harmonized System code and description (including trade name and, if necessary, scientific name).
- Product quantity (net mass in kilograms and, if applicable, specified supplementary units).
Country of Production and Geolocation:
- Geolocation of all plots where raw materials were produced.
- For products derived from cattle, geolocation of all facilities where they were held.
References to Existing Declarations:
- Existing declarations can be referenced for products made with already-declared relevant materials. For example, a chocolate producer in Italy using raw materials already imported into Europe can include the reference numbers of previously submitted due diligence declarations in their DDS.
Submission Procedures for the DDS
The Due Diligence Statement must be submitted via the EU’s IT system, known as TRACES, or through integration with compatible corporate systems. This flexibility ensures a scalable approach for various operational needs.
System-Generated Codes
Once the DDS is submitted, the system generates two essential codes:
Reference Number (e.g., 24ITYGBJFOS258):
- Generated upon DDS approval.
- Uniquely identifies each submitted declaration.
- Must be used to meet legal and customs requirements and included in the customs declaration’s supporting documents section.
Verification Number (e.g., FAHLHGK7):
- A security token known only to the declarant (operator, trader, or authorized representative) and the competent authority.
- Can be confidentially communicated, along with the Reference Number, to downstream operators or traders wishing to reference an upstream DDS in their own declaration.
Trusty: An Innovative Solution to Simplify EUDR Compliance
Compiling the DDS correctly requires significant effort from operators and traders but also offers an opportunity to stand out in the market as responsible actors. Investing in traceability systems and collaborating with technology partners like Trusty streamlines the process of achieving compliance with Regulation (EU) 2023/1115.
Trusty provides advanced tools for collecting traceability and geospatial data, simplifying the due diligence process through integration with public databases and satellite analysis. The platform creates an efficient ecosystem for data exchange among all supply chain actors, ensuring transparency and regulatory compliance.
Furthermore, Trusty integrates seamlessly with the TRACES portal and enterprise systems (ERP), making it a valuable partner for downstream supply chain actors required to submit DDSs for marketing or exporting their products.
Conclusion
Regulation (EU) 2023/1115 aims to reduce deforestation and promote sustainable supply chains, posing both a complex challenge and a strategic opportunity for businesses. The DDS demands a rigorous approach but also encourages greater transparency and accountability throughout supply chains.
With advanced technological solutions like those provided by Trusty, companies can address regulatory requirements effectively, transforming compliance obligations into competitive advantages. Taking action today not only ensures adherence to the regulation but also contributes to building a more ethical and sustainable global economy.
Be EUDR Compliant in 1 Week with Trusty — CONTACT US HERE.
