Obligations of operators
1. Operators shall exercise due diligence in accordance with Article 8 prior to placing relevant products on the market or exporting them in order to prove that the relevant products comply with Article 3.
2. Operators shall not place relevant products on the market or export them without prior submission of a due diligence statement. Operators who, on the basis of the due diligence exercised in accordance with Article 8, conclude that the relevant products comply with Article 3 shall, before placing the relevant products on the market or exporting them, make available a due diligence statement to the competent authorities through the information system referred to in Article 33. Such electronically available and transmittable due diligence statement shall contain the information set out in Annex II for the relevant products and a declaration by the operator that the operator exercised due diligence and that no or only a negligible risk was found.
3. By making available the due diligence statement to competent authorities, the operator shall assume responsibility for the compliance of the relevant product with Article 3. Operators shall keep a record of the due diligence statements for five years from the date the statement is submitted through the information system referred to in Article 33.
4. Operators shall not place relevant products on the market or export them where one or more of the following cases apply:
(a)
the relevant products are non-compliant;
(b)
the exercise of due diligence has revealed a non-negligible risk that the relevant products are non-compliant;
(c)
the operator was unable to fulfil the obligations referred to in paragraphs 1 and 2.
5. Operators that obtain or are made aware of relevant new information, including substantiated concerns, indicating that a relevant product that they have placed on the market is at risk of not complying with this Regulation shall immediately inform the competent authorities of the Member States in which they placed the relevant product on the market, as well as traders to whom they supplied the relevant product. In the case of exports, the operators shall inform the competent authority of the Member State which is the country of production.
6. Operators shall offer all necessary assistance to the competent authorities to facilitate the carrying out of the checks under Article 18, including access to premises and the making available of documentation and records.
7. Operators shall communicate to operators and to traders further down the supply chain of the relevant products they placed on the market or exported all information necessary to demonstrate that due diligence was exercised and that no or only a negligible risk was found, including the reference numbers of the due diligence statements associated to those products.
8. By way of derogation from paragraph 1 of this Article, operators that are SMEs (‘SME operators’) shall not be required to exercise due diligence for relevant products contained in or made from relevant products that have already been subject to due diligence in accordance with paragraph 1 of this Article and for which a due diligence statement has already been submitted in accordance with Article 33. In such cases, SME operators shall provide the competent authorities with the reference number of the due diligence statement upon request. For parts of relevant products that have not been subject to due diligence, the SME operators shall exercise due diligence in accordance with paragraph 1 of this Article.
9. Operators that are not SMEs (‘non-SME operators’) may refer to due diligence statements that have already been submitted in accordance with Article 33 only after having ascertained that the due diligence relating to the relevant products contained in or made from the relevant products was exercised in accordance with paragraph 1 of this Article. They shall include the reference numbers of such due diligence statements that have already been submitted in accordance with Article 33 in the due diligence statements that they submit under paragraph 2 of this Article. For parts of relevant products that have not been subject to due diligence, non-SME operators shall exercise due diligence in accordance with paragraph 1 of this Article.
10. Any operator referring to a due diligence statement that has already been submitted in accordance with Article 33 shall retain responsibility for the compliance of the relevant products with Article 3, including that no or only a negligible risk was found, prior to placing such relevant products on the market or exporting them.
Obligations of traders
1. Traders that are not SMEs (‘non-SME traders’) shall be considered as non-SME operators and shall be subject to obligations and provisions in Articles 3, 4 and 6, Articles 8 to 13, Article 16(8) to (11) and Article 18 with regard to the relevant commodities and relevant products that they make available on the market.
2. Traders that are SMEs (‘SME traders’) shall make available relevant products on the market only if they are in possession of the information required under paragraph 3.
3. SME traders shall collect and keep the following information relating to the relevant products they intend to make available on the market:
(a)
the name, registered trade name or registered trade mark, the postal address, the email address and, if available, a web address of the operators or the traders who have supplied the relevant products to them, as well as the reference numbers of the due diligence statements associated to those products;
(b)
the name, registered trade name or registered trade mark, the postal address, the email address and, if available, a web address of the operators or the traders to whom they have supplied the relevant products.
4. SME traders shall keep the information referred to in paragraph 3 for at least five years from the date of the making available on the market and shall provide that information to the competent authorities upon request.
5. SME traders that obtain or are made aware of relevant new information, including substantiated concerns, indicating that a relevant product that they have made available on the market is at risk of not complying with this Regulation shall immediately inform the competent authorities of the Member States in which they made the relevant product available on the market as well as traders to whom they supplied the relevant product.
6. Traders, whether or not they are SMEs, shall offer all necessary assistance to the competent authorities to facilitate the carrying out of the checks under Articles 18 and 19, including access to premises and the making available of documentation and records.
Authorised representatives
1. Operators or traders may mandate an authorised representative to submit the due diligence statement pursuant to Article 4(2) on their behalf. In such cases, the operator or trader shall retain responsibility for the compliance of the relevant product with Article 3.
2. The authorised representative shall, upon request, provide a copy of the mandate in an official language of the Union to the competent authorities and a copy in an official language of the Member State in which the due diligence statement is handled or, where that is not possible, in English.
3. An operator that is a natural person or a microenterprise may mandate the next operator or trader further down the supply chain that is not a natural person or a microenterprise to act as an authorised representative. Such next operator or trader further down the supply chain shall not place or make available relevant products on the market or export them without submitting the due diligence statement pursuant to Article 4(2) on behalf of that operator. In such cases, the operator that is a natural person or a microenterprise shall retain responsibility for compliance of the relevant product with Article 3, and shall communicate to that next operator or trader further down the supply chain all information necessary to confirm that due diligence was exercised and that no or only a negligible risk was found.
Placing on the market by operators established in third countries
Where a natural or legal person established outside the Union places relevant products on the market, the first natural or legal person established in the Union who makes such relevant products available on the market shall be deemed to be an operator within the meaning of this Regulation.
Due diligence
1. Prior to placing relevant products on the market or exporting them, operators shall exercise due diligence with regard to all relevant products supplied by each particular supplier.
2. The due diligence shall include:
(a)
the collection of information, data and documents needed to fulfil the requirements set out in Article 9;
(b)
risk assessment measures as referred to in Article 10;
(c)
risk mitigation measures as referred to in Article 11.
Information requirements
1. Operators shall collect information, documents and data which demonstrate that the relevant products comply with Article 3. For this purpose, the operator shall collect, organise and keep for five years from the date of the placing on the market or of the export of the relevant products the following information, accompanied by evidence, relating to each relevant product:
(a)
a description, including the trade name and type of the relevant products as well as, in the case of relevant products that contain or have been made using wood, the common name of the species and their full scientific name; the product description shall include the list of relevant commodities or relevant products contained therein or used to make those products;
(b)
the quantity of the relevant products; for relevant products entering or leaving the market, the quantity is to be expressed in kilograms of net mass and, where applicable, in the supplementary unit set out in Annex I to Council Regulation (EEC) No 2658/87 ( 20 ) against the indicated Harmonised System code, or, in all other cases, the quantity is to be expressed in net mass or, where applicable, volume or number of items; a supplementary unit is applicable where it is defined consistently for all possible subheadings under the Harmonised System code referred to in the due diligence statement;
(c)
the country of production and, where relevant, parts thereof;
(d)
the geolocation of all plots of land where the relevant commodities that the relevant product contains, or has been made using, were produced, as well as the date or time range of production; where a relevant product contains or has been made with relevant commodities produced on different plots of land, the geolocation of all different plots of land shall be included; any deforestation or forest degradation on the given plots of land shall automatically disqualify all relevant commodities and relevant products from those plots of land from being placed or made available on the market or exported; for relevant products that contain or have been made using cattle, and for such relevant products that have been fed with relevant products, the geolocation shall refer to all the establishments where the cattle were kept; for all other relevant products of Annex I, the geolocation shall refer to the plots of land;
(e)
the name, postal address and email address of any business or person from whom they have been supplied with the relevant products;
(f)
the name, postal address and email address of any business, operator or trader to whom the relevant products have been supplied;
(g)
adequately conclusive and verifiable information that the relevant products are deforestation-free;
(h)
adequately conclusive and verifiable information that the relevant commodities have been produced in accordance with the relevant legislation of the country of production, including any arrangement conferring the right to use the respective area for the purposes of the production of the relevant commodity.
2. The operator shall make available to the competent authorities upon request the information, documents and data collected under this Article.
Risk assessment
1. Operators shall verify and analyse the information collected in accordance with Article 9 and any other relevant documentation. On the basis of that information and documentation, the operators shall carry out a risk assessment to establish whether there is a risk that the relevant products intended to be placed on the market or exported are non-compliant. Operators shall not place the relevant products on the market or export them, except where the risk assessment reveals no or only a negligible risk that the relevant products are non-compliant.
2. The risk assessment shall take into account, in particular, the following criteria:
(a)
the assignment of risk to the relevant country of production or parts thereof in accordance with Article 29;
(b)
the presence of forests in the country of production or parts thereof;
(c)
the presence of indigenous peoples in the country of production or parts thereof;
(d)
the consultation and cooperation in good faith with indigenous peoples in the country of production or parts thereof;
(e)
the existence of duly reasoned claims by indigenous peoples based on objective and verifiable information regarding the use or ownership of the area used for the purpose of producing the relevant commodity;
(f)
prevalence of deforestation or forest degradation in the country of production or parts thereof;
(g)
the source, reliability, validity, and links to other available documentation of the information referred to in Article 9(1);
(h)
concerns in relation to the country of production and origin or parts thereof, such as level of corruption, prevalence of document and data falsification, lack of law enforcement, violations of international human rights, armed conflict or presence of sanctions imposed by the UN Security Council or the Council of the European Union;
(i)
the complexity of the relevant supply chain and the stage of processing of the relevant products, in particular difficulties in connecting relevant products to the plot of land where the relevant commodities were produced;
(j)
the risk of circumvention of this Regulation or of mixing with relevant products of unknown origin or produced in areas where deforestation or forest degradation has occurred or is occurring;
(k)
conclusions of the meetings of the Commission expert groups supporting the implementation of this Regulation, as published in the Commission’s expert group register;
(l)
substantiated concerns submitted under Article 31, and information on the history of non-compliance of operators or traders along the relevant supply chain with this Regulation;
(m)
any information that would point to a risk that the relevant products are non-compliant;
(n)
complementary information on compliance with this Regulation, which may include information supplied by certification or other third-party verified schemes, including voluntary schemes recognised by the Commission under Article 30(5) of Directive(EU) 2018/2001 of the European Parliament and of the Council ( 21 ) , provided that the information meets the requirements set out in Article 9 of this Regulation.
3. Wood products which fall within the scope of Regulation (EC) No 2173/2005 that are covered by a valid FLEGT license from an operational licensing scheme shall be deemed to comply with Article 3, point (b), of this Regulation.
4. The operators shall document and review the risk assessments at least on an annual basis and make them available to the competent authorities upon request. Operators shall be able to demonstrate how the information gathered was checked against the risk assessment criteria set out in paragraph 2 and how they determined the degree of risk.
Risk mitigation
1. Except where a risk assessment carried out in accordance with Article 10 reveals that there is no or only a negligible risk that the relevant products are non-compliant, the operator shall, prior to placing the relevant products on the market or exporting them, adopt risk mitigation procedures and measures that are adequate to achieve no or only a negligible risk. Such procedures and measures may include any of the following:
(a)
requiring additional information, data or documents;
(b)
carrying out independent surveys or audits;
(c)
taking other measures pertaining to information requirements set out in Article 9.
Such procedures and measures may also include supporting compliance with this Regulation by that operator’s suppliers, in particular smallholders, through capacity building and investments.
2. Operators shall have in place adequate and proportionate policies, controls and procedures to mitigate and manage effectively the risks of non-compliance of relevant products identified. Those policies, controls and procedures shall include:
(a)
model risk management practices, reporting, record-keeping, internal control and compliance management, including the appointment of a compliance officer at management level for non-SME operators;
(b)
an independent audit function to check the internal policies, controls and procedures referred to in point (a) for all non-SME operators.
3. The decisions on risk mitigation procedures and measures shall be documented, reviewed at least on an annual basis and made available by the operators to the competent authorities upon request. Operators shall be able to demonstrate how decisions on risk mitigation procedures and measures were taken.
Establishment and maintenance of due diligence systems, reporting and record keeping
1. In order to exercise due diligence in accordance with Article 8, operators shall establish and keep up to date a framework of procedures and measures to ensure that the relevant products they place on the market or export comply with Article 3 (‘due diligence system’).
2. Operators shall review the due diligence system at least once a year. Where operators become aware of new developments which could influence the due diligence system, they shall update the due diligence system to take account of those developments. Operators shall keep a record of such updates in their due diligence systems for five years
3. Operators who do not fall within the categories of SMEs, including microenterprises, or natural persons shall, on an annual basis, publicly report as widely as possible, including via the internet, on their due diligence system, including on the steps taken by them to fulfil their obligations as set out in Article 8. Operators who fall also within the scope of other Union legal acts that lay down requirements regarding value chain due diligence may fulfil their reporting obligations under this paragraph by including the required information when reporting in the context of those other Union legal acts.
4. Without prejudice to Union data protection legislation, the reporting as referred to in paragraph 3 shall include the following information concerning relevant commodities and relevant products:
(a)
a summary of the information referred to in Article 9(1), points (a), (b) and (c);
(b)
the conclusions of the risk assessment carried out pursuant to Article 10 and measures undertaken pursuant to Article 11 and a description of the information and evidence obtained and used to assess the risk;
(c)
where applicable, a description of the process of consultation of indigenous peoples, local communities and other customary tenure rights holders or of the civil society organisations that are present in the area of production of the relevant commodities and relevant products.
5. Operators shall keep for at least five years all documentation related to due diligence, such as all records, measures and procedures pursuant to Article 8. They shall make that documentation available to the competent authorities upon request.
Simplified due diligence
1. When placing relevant products on the market or exporting them, operators shall not be required to fulfil the obligations under Articles 10 and 11 where, after having assessed the complexity of the relevant supply chain and the risk of circumvention of this Regulation or the risk of mixing with products of unknown origin or origin in high-risk or standard-risk countries or parts thereof, they have ascertained that all relevant commodities and relevant products have been produced in countries or parts thereof that were classified as low risk in accordance with Article 29. In such cases, the operator shall make available to the competent authority upon request relevant documentation demonstrating that there is a negligible risk of circumvention of this Regulation or of mixing with products of unknown origin or origin in high-risk or standard-risk countries or parts thereof.
2. Notwithstanding paragraph 1 of this Article, if the operator obtains or is made aware of any relevant information, including as a result of the assessment carried out under paragraph 1 of this Article, and including substantiated concerns submitted under Article 31, that would point to a risk that the relevant products do not comply with this Regulation or that this Regulation is circumvented, the operator shall fulfil all of the obligations under Articles 10 and 11 and shall immediately communicate any relevant information to the competent authority.
3. Where a competent authority is made aware of any information that would point to a risk of circumvention of this Regulation, including in cases in which relevant commodities or relevant products produced in a standard-risk or high-risk country or a part thereof are subsequently processed in a low-risk country or a part thereof from where they are placed on or leave the market, the competent authority shall take immediate action in accordance with Article 17(1) and, where necessary, adopt interim measures in accordance with Article 23.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
