By Sam Thake, Customs Consultancy Manager, Denholm Good Logistics
Need to Know
The EU Deforestation Regulation (EUDR) is not just a sustainability topic. It is a customs and market-access issue.
If an in-scope product cannot be linked back to the right source data, legal production evidence, and due diligence checks, it will not be allowed to enter or exit the EU market.
Why is EUDR being introduced?
The EU is one of the world’s largest consumers of commodities such as cocoa, coffee, palm oil, and timber — all of which are associated with deforestation. The regulation aims to reduce the EU’s environmental footprint by cutting the link between supply chains and forest destruction.
The regulation is trying to make sure that products linked to deforestation do not enter or leave the EU market without proper evidence behind them.
What products are in scope?
The regulation focuses on seven key commodities linked to deforestation:
- Cattle
- Cocoa
- Coffee
- Palm oil
- Rubber
- Soya
- Wood
It also applies to a wide range of derived and finished products, including:
- Furniture
- Chocolate and food products
- Paper and packaging
- Composite goods with mixed materials
When does EUDR apply?
- 30 December 2026 – Large and medium-sized businesses
- 30 June 2027 – Small and micro businesses
What does this mean for UK businesses?
EUDR can affect UK businesses even where they are not the party making the formal EU declaration. If they export to the EU, supply EU customers, or provide goods into an EU-facing supply chain, they may still be asked for evidence.
What to expect
- Increased requests for geolocation and traceability data
- More audits, checks, and supplier scrutiny
- Updated contracts and compliance obligations
- Greater pressure to prove sourcing and origin
The request may come from a customer, freight forwarder, importer, buying team, or compliance department asking for geolocation data, proof of origin or supplier evidence.
Northern Ireland and EUDR
Businesses moving or placing in-scope goods in Northern Ireland, or trading between Northern Ireland and the EU, should keep a close eye on official guidance and prepare for EUDR requirements where EU market rules apply.
In practice, this means operators and traders should assess whether their products, trade routes, and customer obligations bring them within scope and prepare the same as other EU businesses.
Trade depends on proof
To place goods on the EU market (or export them), you must be able to demonstrate three things:
- The product is deforestation-free
- It was legally produced in the country of origin
- It is fully traceable back to where it was produced
And all of this must be supported by a Due Diligence Statement (DDS).
Who is responsible?
EUDR obligations depend on the role a business plays in the supply chain. Upstream operators are the businesses placing in-scope products on the EU market for the first time or exporting them from the EU. They are responsible for the data and evidence collection, risk assessment and risk mitigation if necessary.
Customs impact: where EUDR meets the declaration process
EUDR compliance needs to be sorted before the customs declaration stage. The Due Diligence Statement is submitted through the EU Information System and generates a reference number that needs to appear in import or export customs data for the relevant goods.
A common problem is that the data sits with procurement, the shipment is being managed by logistics, and the declaration is handled by customs. If those teams are not aligned, the missing DDS reference or inconsistent product data may only be spotted when the goods are already due to move.
How can businesses improve traceability?
Most businesses will need a staged approach, starting with the products and suppliers that carry the most obvious risk.
- Map the supply chain – understand all suppliers, production locations, and how materials move, mix, or are processed.
- Focus on the highest risk areas first – target in-scope commodities, complex supply chains, and higher-risk regions.
- Strengthen supplier engagement – set clear data expectations and ensure suppliers can meet EUDR requirements.
- Maintain origin integrity – use segregation or tracking methods to ensure materials remain linked to their source.
- Invest in the right systems – implement tools that capture, connect, and manage traceability data effectively.
- Verify data – validate supplier information and resolve inconsistencies rather than relying on assumptions.
- Be ready to reshape supply chains – simplify or shift sourcing where traceability cannot be achieved.
Verifiable data is key
EUDR firmly places responsibility on the EU operators, relying on supplier information is not enough. Certificates, ESG statements, and supplier assurances are useful, but they need to be backed up by verifiable product, origin, legal production, and traceability data.
Businesses are expected to:
- Verify geolocation data
- Validate legal documentation
- Cross-check inconsistencies
- Maintain a clear audit trail
If the evidence is missing, contradictory, or cannot be checked, the goods cannot proceed.
Due Diligence Statement (DDS)
The Due Diligence Statement (DDS) is a formal declaration. It is not just an administrative reference number.
Submitting a DDS confirms that:
- You have completed the required due diligence process (data collection, risk assessment, and mitigation)
- You are satisfied that the product meets all EUDR requirements
- The risk of non-compliance has been reduced to a negligible level
That point is worth stressing. The DDS is legally binding, and responsibility remains with the operator submitting it, even if an authorised representative is used to support the process.
Each DDS is submitted through the EU Information System and generates a unique reference number. That reference needs to be passed through the supply chain to downstream operators and included in customs data for the relevant import or export movement.
Without a valid DDS reference where one is required, goods may not be released for free circulation or exported until the compliance position is resolved.
Risk classification
Countries can be classified as low, standard, or high risk based on factors such as deforestation rates, governance standards, and data reliability.
Risk classification affects the level of due diligence and scrutiny required. However, every in-scope product must still meet the same Article 3 requirements:
- It must be deforestation-free
- It must be legally produced
- It must be supported by a valid Due Diligence Statement (DDS)
What changes is the intensity of checks and scrutiny. For example:
- Sourcing from low-risk countries may allow for simplified due diligence, but only where there are no concerns or data gaps
- Sourcing from standard- or high-risk countries requires full due diligence in all cases
- Any uncertainty, regardless of country classification, triggers more detailed assessment
Under EUDR there must be either no or negligible risk once assessments have been completed.
“Negligible risk” is not the same as “low risk” or “probably fine”. It means there is no reasonable basis for concern once the evidence has been reviewed.
If data is incomplete, inconsistent, or unverifiable, the risk cannot be considered negligible.
What are the main challenges?
The difficult part of EUDR is not understanding the principle. Most businesses understand why traceability matters. The difficult part is proving it, consistently, across real supply chains.
Data gaps
Many businesses do not currently hold the level of detail required under EUDR. This includes:
- Plot-level geolocation data pinpointing where commodities were produced
- Full visibility beyond direct suppliers
- Reliable, verifiable documentation proving legal production
This information either doesn’t exist in a usable format or sits with upstream suppliers who have never been asked to provide it before.
This is where preparation often takes longer than expected. Without complete and verifiable data, due diligence cannot be completed, and the product may not be ready for lawful placement on the EU market or export.
Supply chain complexity
EUDR places a heavy emphasis on maintaining a clear link between products and their origin, which can be difficult in modern supply chains.
Many existing models have been built around efficiency and scale, relying on:
- Aggregation of raw materials from multiple sources
- Blending during processing
- Indirect sourcing through multiple intermediaries
That is a problem for products such as timber furniture, paper packaging, chocolate, rubber components, or mixed-material goods where the commodity may have passed through several stages before becoming the finished product. If the origin link is lost during processing, aggregation, or transformation, compliance becomes much harder to evidence.
Supplier readiness
EUDR compliance is heavily dependent on the capability of suppliers, particularly those further upstream.
Not all suppliers are currently equipped to:
- Provide accurate geolocation data
- Maintain the required level of traceability
- Supply consistent and verifiable documentation
This is especially true in regions where infrastructure, systems, or regulatory awareness may be limited.
For operators, this creates a problem. They may need to:
- Invest time in supporting and upskilling suppliers
- Introduce stricter onboarding and contractual requirements
- Replace suppliers who cannot meet expectations
- Or, in some cases, redesign their sourcing strategy entirely
This is why EUDR should not sit only with the compliance team. It is also a supplier management, procurement, logistics, and customs issue.
Enforcement
Authorities across EU Member States have wide-ranging powers to monitor compliance and take action where issues are identified. This can be in the form of:
- Shipment controls – authorities can block or stop goods from being placed on the market or exported if compliance cannot be demonstrated
- Seizure of goods – non-compliant products can be detained, confiscated, or removed from circulation
- Audits and inspections – including detailed reviews of due diligence systems, documentation, and internal processes
- Data-driven monitoring – authorities can use satellite imagery, geospatial tools, and third-party intelligence to verify land use and detect inconsistencies in submitted data
Penalties and consequences
Where non-compliance is identified, the consequences can be significant.
Penalties may include:
- Fines of at least 4% of annual EU turnover
- Confiscation of goods or revenue linked to non-compliant products
- Product recalls or withdrawal from the market
- Restrictions or suspension of market access
In more serious or repeated cases, authorities may also publicly disclose breaches, which can create reputational risk as well as regulatory exposure.
What should businesses be doing now?
The businesses that will cope best with EUDR will be the ones that start early and treat it as an operational project.
Here are some of the key areas to focus on:
Understand product exposure
This means reviewing your product portfolio against:
- Relevant commodities (e.g. cocoa, wood, palm oil)
- CN/HS classification codes listed under the regulation
Do not stop at the finished product description. Check the materials that sit inside it, the relevant CN/HS codes, and whether any in-scope commodity is present.
You may need to collect data from multiple sources to comply.
Identify impacted suppliers and supply chains
Once you understand your exposure, the next step is to map the supply chains behind those products.
This includes:
- Identifying all relevant suppliers in the chain
- Understanding where production takes place
- Pinpointing where materials may be mixed, aggregated, or transformed
A direct supplier may be visible, but the plantation, farm, forest, processor, or intermediary further upstream may not be.
Assess data readiness
EUDR is data-driven, so you need to understand whether you can meet the data requirements.
This means assessing:
- Availability of plot-level geolocation data
- Quality and consistency of supplier information
- Strength of legal documentation supporting production
Define risk and escalation processes
EUDR requires businesses to make clear, defensible decisions about whether products can proceed. This means defining what “acceptable” evidence looks like, setting escalation thresholds, and agreeing when a shipment or transaction should be paused.
This means deciding:
- When additional checks are needed
- When to engage suppliers for clarification
- When to stop or suspend a transaction
Clear rules matter because the pressure will come when goods are ready to move. That is not the ideal moment to debate whether evidence is good enough.
Integrate EUDR across departments
EUDR cannot sit neatly in one department. Procurement may hold the supplier relationship, logistics may control the movement, and customs may be responsible for the declaration data.
The requirement to submit a Due Diligence Statement (DDS) and include it in customs data means that compliance must happen before goods move.
By the time goods are ready to move, the right evidence should already have been checked, the DDS position agreed, and any customs data requirements understood.
Summary
EUDR changes what businesses need to know, prove, and share before certain goods can move smoothly through EU-facing supply chains.
The biggest risk is finding out too late that the evidence sits upstream, the supplier cannot provide it, or the DDS reference is not available when the customs process needs it.
Organisations will need:
- Clear visibility across their supply chains
- Reliable, verifiable data at product level
- Strong due diligence and decision-making processes
- Closer collaboration with suppliers
- Integration with operational and customs workflows
The earlier businesses test their products, suppliers, data, and customs processes, the more options they will have.
If you need assistance with how this could affect your business, reach out to your DGL representative.
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