.jpg)
Following our recent webinar with the UK’s Department for Business and Trade, featuring our Head of Market Development Anna Roberts, we received a wide range of questions from attendees on how the EU Deforestation Regulation (EUDR) affects non-EU businesses. This post is part of a series working through those questions by theme.
In this first instalment, we address the questions focused on roles and obligations - covering what it means to be an operator versus a trader, how obligations flow through supply chains, and what non-EU businesses are expected to do in practice.
Q: Can you clarify the definition of 'operator' and 'trader'? If we import a product from the EU, change it, then export to the EU - are we an operator or a trader?
Generally, an operator is a company which transforms a product (i.e., a manufacturer) and / or is the first company placing the goods in the EU market. A trader is a distributor or merchant of goods (i.e., they don't process or transform the goods), who is not placing them on the market for the first time. So a company importing products into the EU for the first time who is purely distributing them would count as an Upstream Operator / Trader, even though they don't manufacture the goods.
Under EUDR you would be neither an Operator nor Trader (in terms of Article 3 obligations) because you are not an EU entity, unless you happen to place the goods on the EU market. In that case, because the goods are re-imported, you would be a non-EU Downstream Operator / Trader.
It's likely that as a non-EU supplier, you will need to pass information to your EU customers to enable them to comply with EUDR.
Under EUDR, an 'operator' is the first entity placing relevant goods on the EU market, while a 'trader' is a business further downstream that makes products available on the EU market without being the first to place them there. As a non-EU company, you are not legally bound by EUDR and are classed as a 'non-EU supplier' with no legal duties - only commercial responsibilities to share EUDR information with your EU customers. However, if you sell on DDP (Delivered Duty Paid) incoterms, you may be acting as a 'non-EU operator' - placing goods on the EU market yourself - in which case you would need to submit a DDS to TRACES using an EU or Northern Irish (XI) EORI. Your scenario of buying from the EU, transforming the product, and selling back to the EU most closely resembles Scenario 3 in the presentation. Your EU customer would be the First Downstream Operator/Trader with no due diligence obligation, provided they can demonstrate the goods previously entered the EU market.
Q: If our company is a large operator in the EU but our supplier is an SME in the EU, what would our EUDR obligations be if the requirements for the SME don't take effect until June 2027?
Unless your supplier (the EU-based SME) is a primary operator or Upstream Operator, your EU supplier will be a Downstream Operator and has no obligations to pass on DDS references to you, regardless of the 6-month extension. In this case, your obligations are limited to storing information about your suppliers and customers, and reporting to your Competent Authority in the case of a substantiated concern (having ascertained that the supplier had conducted due diligence).
In the instance that your SME EU supplier (as a primary or upstream operator) supplies you goods before June 30 2027, then FAQ 5.10 makes it clear that the onus is on the Upstream Operator to pass on DDS, and not on the Downstream Operator (you) to seek them out. Therefore your obligations remain that of a Downstream Operator.
Q: As a non-EU supplier, can we take on the EUDR responsibility for the EU operator customer, if we also have a presence in the EU?
Yes, though there is a difference between taking on EUDR responsibility and EUDR liability.
As a non-EU supplier, you could take on much of the EUDR 'paperwork' responsibility when assuming the role of non-EU Operator. This would involve you conducting due diligence, submitting a DDS to TRACES and passing the information to your EU customer (assuming they are the Upstream Operator in this instance). The EU customer still has to submit their own DDS and conduct due diligence, but you will have helped them with that through your own due diligence.
Another way to achieve this would be to register your EU business as an Authorised Representative (since an Authorised Representative must be an EU entity), who can submit a DDS on behalf of your EU customer. As above, your EU customer will remain legally liable for any non-compliance, not you. But they would not need to submit their own DDS.
Q: We are a non-EU company with different European distributors in different countries. Would each distributor be accountable in their country?
Yes - each EU distributor who first places your products on the EU market in their country would take on the role of EU Upstream Operator in that country and be accountable to their national competent authority. Enforcement of EUDR is carried out at member state level, so each distributor is responsible for compliance within their jurisdiction. As a non-EU supplier who does not place the goods on the EU market, your role is to ensure each distributor has the EUDR information they need (geolocations, species, supply chain data) to fulfil their obligations - it is in your commercial interest to do so, as they will be unable to sell your products without it.
Q: Is there still a role for Authorised Representatives and where does the obligation sit with legal responsibility?
The role of Authorised Representatives has not substantively changed following recent clarifications and they still have a clear role under EUDR.
FAQs 5.2, 5.2.1 and 7.29 reaffirm previous guidance:
- Legal liability remains with the Operator / Trader, not the Authorised Representative
- The Authorised Representative must be based in the EU and set up their own TRACES account, linking it to the Operator's / Trader's
- An economic operator can have multiple roles listed in TRACES, including Operator and Authorised Representative, applying the roles differently depending on the specificities of the transactions. This indicates therefore that an Operator which is established as a group of companies, should be able to submit DDS as an Authorised Representative on behalf of other entities in the group
Q: How do you see the EUDR affecting non-EU Freight Forwarders who are not importers of record?
Where a non-EU freight forwarder is acting purely as a logistics intermediary and is not the importer of record, they are unlikely to carry direct EUDR legal obligations — the obligation sits with the EU Upstream Operator who is placing the goods on the market. However, freight forwarders will be commercially impacted in several ways: they will need to include DDS reference numbers on customs documentation for in-scope goods; their clients (EU importers) will require them to be EUDR-aware; and they may need to advise clients on the requirement to submit a DDS before goods clear customs. Forwarders acting on DDP terms, where they effectively act on behalf of a non-EU operator, should take specific advice on whether this creates operator-level obligations.
Freight forwarders may also want to consider the role of Authorised Representatives which may reduce the back and forth of paperwork at customs, especially if there are short lead times. This would enable EU freight forwarders to submit a DDS on behalf of an EU company, but the EU company retains legal liability for any non-compliance.
Q: What if a non-EU business supplies to EU private individuals for personal consumption only?
This was one useful clarification from the recent updates (FAQs 3.7 & 3.9). The EUDR does not apply to EU consumers who purchase products for private consumption from outside the EU, so long as the consumer never places the products on the market. Even if the consumer is declared the 'importer' on customs documents, they are not considered an 'Operator' under EUDR.
This means that if you are a non-EU supplier selling direct to EU private consumers (e.g. via e-commerce) and those consumers will not resell or place the goods on the market, you are likely to be a non-EU Operator and will need to submit a DDS to TRACES, but will not be legally liable for non-compliance. This does sound like a loophole, but it is how the B2C angle seems to have been defined by the EC. We will continue to monitor this for any concrete examples.
We hope this helps clarify some of the more complex role-based questions that came up during the webinar. If you have further questions about your specific obligations under EUDR, please don't hesitate to get in touch with our team directly.
Look out for the next post in this series, where we'll be covering questions on products and commodities in scope of the regulation.
