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EU tightens rules for placing coffee, palm oil, or beef on the market

The EU is preparing a regulation imposing stricter rules for making certain commodities and products available on the EU market and exporting them from the EU market. The new regulation shall apply, for instance, to coffee, soy, palm oil, cattle, or timber. What new obligations will companies face when importing and exporting these commodities and products?

The European Parliament and the Council of the EU have reached a political agreement on the regulation of commodities and products connected with deforestation and forest degradation. The regulation imposes strict requirements on certain commodities and secondary products about to be placed on or exported from the EU market, including the traceability of origin, a risk assessment system for country benchmarking, and registration in a new EU register.


What new obligations will exporters and importers have?

Strict due diligence rules will apply to all companies that place coffee, cocoa, soy, palm oil, cattle, timber, rubber, or derived secondary products (e.g., beef, chocolate, furniture) on the EU market or export them from the EU. In particular, these companies will have to collect accurate geographical information on the agricultural land on which the primary commodities were grown and based on such information:

  • ensure that they were not produced on land deforested or degraded after 31 December 2020
  • ensure that they were produced in accordance with the legislation of the country of production.

At the same time, companies will have to register a due diligence statement that the commodities or products comply with the stipulated conditions in a new EU information system. They will also be required to provide basic information for monitoring purposes (e.g., geo-localisation coordinates of the agricultural business or place where the primary commodities have been grown). Only after meeting all stipulated requirements will the commodities and their derived products be allowed to be placed on the EU market (or exported from the EU). 

Obligations according to different levels of risk

Companies' obligations will vary depending on the level of deforestation and forest degradation risk assigned to the respective country or region of origin (high, standard, or low risk). Obligations will also vary depending on whether a company places relevant commodities or products on the EU market, supplies them to the EU market within a supply chain, or exports them from the EU. Lesser requirements will be placed on small and medium-sized enterprises. 


Next steps

The draft regulation is currently in its first reading and awaiting formal approval. Once approved and entered into force, the companies concerned will have 18 months to familiarise themselves with and implement the rules. SMEs will be given more time to adapt to the changes. Companies that fail to comply with the strict requirements will not be allowed to place the commodities and products on the EU market (or export them) and their national authorities may fine them for breaching the regulation.