EU: New Supply Chain Regulation to Stop Deforestation

May 12, 2023 Benn-Ibler Rechtsanwälte

In future, the EU only wants imported products for which forests have been neither degraded nor deforested. The new EU regulation for deforestation-free supply chains adopted by the EU Parliament on 19 April 2023 imposes precisely such a verification obligation on companies. The implementation is to be based on comprehensive due diligence statements by companies and the provision of satellite-based geolocation data.

To combat climate change and declining biodiversity, the new rules are designed to prevent products such as coffee, timber, cocoa, soya, and cattle from entering the EU's internal market if

·       production requires the clearing or deforestation of forests, and

·       human rights and the rights of indigenous peoples have demonstrably been violated.

Although the import of these commodities will not be banned, their sale within the EU will only be possible if suppliers submit a due diligence statement confirming that their products do not originate from any area that has been deforested after 2020 nor has led to the degradation of forests, in particular primary forests that cannot be replaced. Furthermore, it is the responsibility of the companies to prove that their products have been produced in conformity with the regulations of the country of origin.

Regulatory controls will vary depending on the producing country. Within 18 months of the Regulation coming into force, the Commission will classify countries as low, normal, and high risk. For low-risk countries, there will be a simplified due diligence procedure.

Penalties for violations shall be proportionate and dissuasive. The highest fine will be at least four percent of the total annual turnover of violating companies or traders.

In a further step, the Council now has to formally approve the proposal, followed by publication in the Official Journal of the EU.

EU directive on deforestation, P9_TA(2023)0109 (19.04.2023)