A vote on the entry into force of the EU Deforestation Regulation (EUDR) will take place in mid-April 2023, and it is expected to come into effect in December 2024. This means that exporters, importers, and large companies within the EU will have to implement additional requirements regarding due diligence obligations, on top of the existing bureaucratic EUTR requirements.

A practical guide is still a long way off, but the German Timber Trade Federation (GD Holz) recently offered a relevant webinar for more than 200 participants and also provided an update on the current state of knowledge during the Foreign Trade Days 2023.

In the future, all companies involved in the supply chain will assume responsibility for a deforestation-free supply chain. In addition to the previously required EUTR due diligence evidence regarding the reduction of risks associated with the trade of illegally harvested timber, evidence relating to deforestation and forest degradation is now also being added.

For example, the geographical coordinates of all plots of land from which the tradable goods were obtained must be specified. Furthermore, every imported product must now be declared to customs before entry.

Large supply chain companies are also obliged to exercise due diligence. In principle, they can rely on a subcontractor, but they must not blindly trust that supplier – in particular, non-compliances must not be accepted in good faith. Essentially, you can reduce your detailed work by keeping the lists of possible origin coordinates as long as possible. However, with every geographical coordinate, the scope of checks also increases, as it must be verified for each plot of land whether the logging was illegal or whether it caused deforestation or forest damage.

Participants at the Foreign Trade Days raised concerns, among other things, about whether it might subsequently be required to verify that plots of land are indeed reforested. However, GD Holz currently assumes that this will not happen.

It is important to have the correct inspection documentation that was valid at the time of entry and to be able to present it for five years. Furthermore, the reporting chain operates using individual reference numbers, the use of which is intended to exclude insight into the structures of other suppliers. However, it is not yet clear what will happen to old stock and slow-moving goods. GD Holz intends to advocate for an exemption, as otherwise, it may happen that after a three-year transition period, it will no longer be possible to export timber that was harvested before May 2023 and which therefore lacks any geographical coordinates.