On 15 April, the EU Commission issued an updated FAQ as well as an updated Guidance Document regarding the Regulation (EU) 2023/1115 on Deforestation-Free Products (“EUDR”) and published the details for consultation for Annex I. We summarize the key clarifications arising from those two documents and give a brief outlook.

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Clarification for packaging; still no de minimis rule

The EUDR in general applies to all relevant products listed in Annex I, including wood pallets. However, if pallets or other relevant wooden/paper products are used to support, protect or carry another product, the pallets and other relevant wooden/paper products are exempted from EUDR. Therefore, a separate supply of e.g. wooden pallets would lead to the applicability of the EUDR. The new FAQ clarify that although pallets may be supplied separately, they do not fall under the EUDR as long as they are part of the pallet-exchange system (closed-loop system).

Yet, if products used to support, protect or carry another product, e.g. boxes, form the essential character of the product, the EUDR would apply. This could for instance be the case for special gift boxes made of wood that contain other products.

Furthermore, the European Commission did not – despite respective requests from the industry – include a de minimis rule. Therefore, already a small portion of relevant products leads to the applicability of the EUDR.

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Clarifications on placing on the market/ making available, i.e. "supply"

The Guidance Document as well as the updated FAQ clarify what the previous information provided by the European Commission already pointed to, namely that only a transfer of ownership of relevant products constitutes a “supply of relevant products in the course of the commercial activity” as required by Art. 2 No 16 and 18 EUDR. If, however, company A orders the production of a product by another company B and if A receives immediate ownership of the produced product (e.g. based on a contractual arrangement), only company A would be considered operator.

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New information on obligation to “ascertain” for downstream operators and traders

Pursuant to Article 4 (9) EUDR, operators that are not Small or Medium Enterprises (“Non-SME-operators") can refer to reference numbers of Due Diligence Statements (“DDS”) that have already been communicated to the information system by upstream operators. Before doing so, Article 4 (9) EUDR requires them to ascertain whether the due diligence expressed in the DDS was exercised in accordance with Article 4 (1) EUDR.  

The content of this obligation to ascertain was until now rather vague. In its FAQ No 3.4, the European Commission clarifies that the obligation to ascertain refers to the verification of the respective DDS reference number. By referring to the responsibility of each operator according to Article 4 (10) EUDR (and by virtue of Article 5 (1) also non-SME-Traders) the downstream operators may also collect information from their suppliers to verify that they have an up-to-date due diligence system in place. For instance, the completeness and plausibility of the information provided in light of the products intended for the EU market may be reviewed. Apart from the EUDR information system, external sources like publicly available reports of upstream suppliers based on Article 12 para 3 EUDR can be considered. Non-SME-traders must – in turn – communicate conclusive information showing that due diligence was exercised to their upstream operators/clients. Due to the potential risk of product recalls and in particular in case of complex supply chains, annual checks of supplier’s due diligence systems are advisable.  

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No simplification for group of companies

The European Commission reiterates that the individual entity within a group of companies must be assessed according to the criteria of the scope of application of the EUDR. Hence, inter-company transfer is still considered making available on the market according to Article 2 No. 18 EUDR as long as a transfer of ownership takes place. The European Commission provided some information on implications for groups of companies, though. A single company may authorize another company within the group to submit the DDS in its name as authorized representative pursuant to Article 6.  

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More Information on submitting DDS and available Data in the Information System  

The new FAQ include several new explanations on how a DDS can and must be submitted and the technical details of the Information System. It is also emphasized that combining products and producer regions in a DDS is possible. Downstream operators can refer to upstream DDSs. New DDSs will always need to be submitted, particularly in the case of changing product ranges and characteristics, as is likely to be the case in most supply chains – an annual DDS is therefore still not permitted in most cases.

Furthermore, the FAQ explain the data-entry limits: a single DDS can contain a maximum of 200 lines of relevant products, with a maximum of 500 lines for explanations of the product as well as the total size limit of 25 MB. There is the option to specify more than one country of production if necessary. While geolocation data may be hidden by the downstream operators, the country of production as well as the scientific timber name will always remain visible along the DDS line of references.

Furthermore, it is emphasized that additional information submitted via the Information System, such as legal documents, may be submitted to the competent authorities but will only be visible to the competent authority, not to other operators or traders.  

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New information on transition period  

The information on the transition period, more precisely on the period until the date of application of the EUDR, were updated to the new dates of application according to the alteration of regulation (EU) 2024/3234. More importantly, however, was the announcement of a universal reference number for the customs declaration to be communicated by the European Commission for export/re-import of products in stock (until date of application of EUDR).  

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Public Consultation – get involved!

The European Commission further published the links for public consultation on the products listed in Annex I. Feedback can be provided until 13 May 2025  (EOD) via the platform of the European Commission (here) and refers to a draft delegated act to amend Annex I. e.g. Products of HS-Position 1802 as well as several palm-oil and wooden products are concerned – some clarifications, such as exemptions or correspondence letters and accessory materials are included. We recommend checking list of products and exclusions. We also provide legal advice on participating in the consultation.