SME manufacturers within the EU often face confusion about their obligations under the EU Deforestation Regulation (EUDR). Here’s a short overview to help clarify:
Your Responsibilities as an SME Manufacturer
If you’re an SME manufacturer in the EU placing products like furniture on the EU market for the first time, you are an operator according to the EUDR. But you are not required to file a Due Diligence Statement in the EU Information System. However, you must:
- Collect Reference Numbers from your suppliers (unless you import materials from outside the EU; see below).
- Provide Reference Numbers to authorities upon request.
If you purchase raw materials like MDF or Pine timber, they are likely already on the EU market, meaning:
- Another company in the supply chain has filed due diligence and geolocation data in the EU Portal.
- Your supplier will provide EUDR Reference Numbers for these materials.
- As an SME, you’re not required to verify these Reference Numbers.
What If You’re Importing Raw Materials from Non-EU Countries?
If you import materials directly from non-EU countries, your role changes. In this case, you have to generate a Reference Number yourself:
- You must conduct the full Due Diligence process yourself, including providing geolocation data.
- You are responsible for filing the Due Diligence Statement for these imports and generating new Reference Numbers.
Key Takeaways:
- When manufacturing and placing a product on the EU market for the first time: As an SME, collect and pass on Reference Numbers.
- When using raw materials already on the EU market: Use the Reference Numbers provided by your suppliers.
- When importing raw materials from outside the EU: Conduct due diligence yourself and generate your own Reference Numbers.
For more details, refer to the legal texts below:
FAQs, 2.10: A distinction has to be made between the person in the supply chain which imports or domestically places a relevant product on the EU market and persons further down the supply chain: If a person places on the EU market a relevant product manufactured or produced in the EU, it is thereby supplying the product on the market for the first time. A supply presupposes an agreement (written or verbal) between two or more legal or natural persons for the transfer of ownership or any other property right concerning the product in question; it requires that the product has been manufactured or that the commodity, if placed on the market without manufacturing, has been produced (see Art. 2(14) EUDR). Such an activity is relevant under the EUDR, no matter if the relevant product is placed on the market for a) the purpose of processing, b) distribution to commercial or non-commercial consumers or c) use in the business of the operator itself (see Art. 2(19) EUDR). The company is an operator and needs to exercise due diligence and submit a DDS.
FAQs, 3.5.: What are the obligations of SME operators further down the supply chain? Operators further down the supply chain are those who either transform a product listed in Annex I (which has already been subjected to due diligence) into another product listed in Annex I or export a product listed in Annex I (which has already been subjected to due diligence). SME operators further down the supply chain retain legal responsibility in the event of a breach of the Regulation. However, in respect of parts of their products that have been subject to a due diligence, they are neither required to a) exercise due diligence for parts of their products that were already subject of due diligence exercise; nor to b) submit a due diligence statement in the Information System (Art. 4(8) EUDR). But they still have to provide due diligence reference numbers obtained from previous steps in the supply chain upon request of the competent authorities. For parts of relevant products that have not been subject to due diligence, SME operators should exercise due diligence in full and submit a due diligence statement.
EUDR, Art 4.8: By way of derogation from paragraph 1 of this Article, operators that are SMEs (‘SME operators’) shall not be required to exercise due diligence for relevant products contained in or made from relevant products that have already been subject to due diligence in accordance with paragraph 1 of this Article and for which a due diligence statement has already been submitted in accordance with Article 33. In such cases, SME operators shall provide the competent authorities with the reference number of the due diligence statement upon request. For parts of relevant products that have not been subject to due diligence, the SME operators shall exercise due diligence in accordance with paragraph 1 of this Article.