Competent authorities
1. Member States shall designate one or more competent authorities responsible for fulfilling the obligations arising from this Regulation.
2. By 30 December 2023 at the latest, Member States shall inform the Commission of the names, addresses and contact details of the competent authorities referred to in paragraph 1. Member States shall inform the Commission without undue delay of any changes to that information.
3. The Commission shall make the list of the competent authorities publicly available on its website without undue delay. The Commission shall regularly update the list, based on updates received from Member States.
4. Member States shall ensure that the competent authorities have adequate powers, functional independence and the resources to fulfil the obligations set out in this Chapter.
Technical assistance, guidance and exchange of information
1. Without prejudice to the operators’ obligation to exercise due diligence as set out in Article 8, Member States may provide technical and other assistance and guidance to operators. The Commission, in collaboration with Member States, may also provide, where necessary, guidance to operators and competent authorities. Technical and other assistance and guidance shall take into account the situation of SMEs, including microenterprises, and natural persons, in order to facilitate compliance with this Regulation, including as regards the conversion of data from relevant systems to identify the geolocation in the information system as referred to in Article 33. It shall also take into account relevant current and future Union legal acts containing due diligence obligations.
2. Member States shall facilitate the exchange and dissemination of relevant information, in particular with a view to assisting operators in risk assessment as set out in Article 10, and on best practices regarding the implementation of this Regulation.
3. The competent authorities and the Commission shall continuously monitor and exchange information on any significant change in the pattern of trade of relevant products that can lead to the circumvention of this Regulation.
4. Assistance shall be provided in a manner which does not compromise the independence, legal obligations or responsibilities of competent authorities in enforcing this Regulation.
5. The Commission may facilitate the harmonised implementation of this Regulation, by issuing relevant guidelines and by promoting adequate exchange of information, coordination and cooperation between competent authorities, between competent authorities and customs authorities, and between competent authorities and the Commission.
Obligation to carry out checks
1. The competent authorities shall carry out checks within their territory to establish whether operators and traders established in the Union comply with this Regulation. The competent authorities shall carry out checks within their territory to establish whether the relevant products that the operator or trader has placed or intends to place on the market, has made available or intends to make available on the market or has exported or intends to export comply with this Regulation.
2. The checks referred to in paragraph 1 of this Article shall be carried out in accordance with Articles 18 and 19.
3. The competent authorities shall use a risk-based approach to identify the checks to be carried out. Risk criteria shall be identified based on an analysis of risks of non-compliance with this Regulation, taking into account in particular the relevant commodities, the complexity and the length of supply chains, including whether mixing of relevant products is involved, and the stage of processing of the relevant product, whether the plots of land concerned are adjacent to forests, the assignment of risk to countries or parts thereof in accordance with Article 29, paying special attention to the situation of countries or parts thereof classified as high risk, the history of non-compliance of operators or traders with this Regulation, risks of circumvention, and any other relevant information. The analysis of risks shall build on the information referred to in Articles 9 and 10 and may build on the information contained in the information system referred to in Article 33, and may be supported by other relevant sources such as monitoring data, risk profiles from international organisations, substantiated concerns submitted under Article 31, or the conclusions of Commission expert group meetings.
4. The Commission shall, where appropriate, establish and regularly review and update indicative risk criteria at Union level, in accordance with paragraph 3, and communicate them to competent authorities.
5. For the purposes of carrying out the checks referred to in paragraph 1, the competent authorities shall establish annual plans containing at least the following:
(a)
national risk criteria, established in accordance with paragraph 3, for the purpose of determining the checks that are necessary, which build upon any indicative risk criteria at Union level established by the Commission in accordance with paragraph 4, and systematically include risk criteria in relation to countries or parts thereof classified as high risk;
(b)
the selection of operators and traders to be checked; that selection is to be based on the national risk criteria referred to in point (a), using, inter alia , information contained in the information system referred to in Article 33 and electronic data-processing techniques; for each operator or trader to be checked, competent authorities may identify specific due diligence statements to be checked.
6. The annual review of the plans by the competent authorities shall systematically build upon the results of the checks and the experience on implementation of the plans referred to in paragraph 5 in order to improve their effectiveness.
7. Competent authorities shall communicate their plans of checks, as well as updates thereto, to other competent authorities and the Commission. Competent authorities shall exchange information on and coordinate the development and application of the risk criteria referred to in paragraph 5 with competent authorities of other Member States and with the Commission, in order to improve the effectiveness of the enforcement of this Regulation.
8. Each Member State shall ensure that the annual checks carried out by its competent authorities pursuant to paragraph 1 of this Article cover at least 3 % of the operators placing or making available on the market or exporting relevant products that contain or have been made using relevant commodities produced in a country of production or parts thereof classified as standard risk in accordance with Article 29.
9. Each Member State shall ensure that the annual checks carried out by its competent authorities pursuant to paragraph 1 of this Article cover at least 9 % of the operators placing or making available on the market or exporting relevant products that contain or have been made using relevant commodities as well as 9 % of the quantity of each of the relevant products that contain or have been made using relevant commodities produced in a country or parts thereof classified as high risk in accordance with Article 29.
10. Each Member State shall ensure that the annual checks carried out by its competent authorities pursuant to paragraph 1 of this Article cover at least 1 % of the operators placing or making available on the market or exporting relevant products that contain or have been made using relevant commodities produced in a country or parts thereof classified as low risk in accordance with Article 29.
11. The quantified objectives of checks to be carried out by competent authorities shall be met separately for each of the relevant commodities. The quantified objectives shall be calculated by reference to the total number of operators who placed or made available on the market or exported relevant products in the previous year, and to quantity, where applicable. Operators shall be considered as having been checked where the competent authority has checked the elements referred to in Article 18(1), points (a) and (b).
12. Without prejudice to checks planned in advance pursuant to paragraph 5 of this Article, competent authorities shall carry out checks referred to in paragraph 1 of this Article when they obtain or are made aware of relevant information, including based on substantiated concerns submitted by third parties under Article 31, concerning a potential case of non-compliance with this Regulation.
13. Checks shall be carried out without prior warning of the operator or trader, except where prior notification of the operator or trader is necessary in order to ensure the effectiveness of the checks.
14. The competent authorities shall keep records of the checks, indicating in particular their nature and results, as well as on the measures taken in the event of non-compliance. Records of all checks shall be kept for at least 10 years.
15. Records of checks carried out under this Regulation and reports of their results shall constitute environmental information for the purposes of Directive 2003/4/EC of the European Parliament and of the Council ( 22 ) and shall be made available upon request.
Relevant products requiring immediate action
1. Competent authorities shall identify situations where relevant products present such high risk of non-compliance with Article 3 that they require immediate action by competent authorities before those relevant products are placed or made available on the market or exported. Competent authorities shall register such identified situations in the information system referred to in Article 33.
2. When competent authorities identify the situations referred to in paragraph 1 of this Article, including when a due diligence statement relating to the relevant products concerned is submitted by an operator, the information system referred to in Article 33 shall identify the high risk of non-compliance with Article 3 and inform competent authorities, which shall:
(a)
take immediate interim measures under Article 23 to suspend the placing or making available of those relevant products on the market; or
(b)
once the electronic interface referred to in Article 28(1) is in place, in the case of relevant products entering or leaving the market, require customs authorities to suspend the release for free circulation or export of those relevant products under Article 26(7).
3. The suspensions referred to in paragraph 2 of this Article shall end within three working days or within 72 hours in the case of perishable relevant products, starting from the moment when the high risk of non-compliance is identified in the information system referred to in Article 33. Where the competent authorities, based on the result of the checks carried out within that period, conclude that they require additional time in which to establish whether the relevant products comply with Article 3, they shall extend the period of suspension, by additional periods of three working days, by means of additional interim measures taken under Article 23 or, in the case of relevant products entering or leaving the market, by notifying the customs authorities of the need to maintain the suspension under Article 26(7).
Checks on operators and non-SME traders
1. The checks on operators and non-SME traders shall include:
(a)
examination of their due diligence system, including risk assessment and risk mitigation procedures, and of documentation and records that demonstrate the proper functioning of the due diligence system;
(b)
examination of documentation and records that demonstrate that a specific relevant product that the operator has placed or intends to place on the market or intends to export or that the non-SME trader has made available or intends to make available on the market complies with this Regulation, including, when applicable, through risk mitigation measures, as well as examination of the relevant due diligence statements.
2. The checks on operators and non-SME traders may also include, where appropriate, in particular where the examinations referred to in paragraph 1 have raised questions:
(a)
on-the-ground examination of relevant commodities or of the relevant products with a view to ascertaining their correspondence with the documentation used for exercising due diligence;
(b)
examination of corrective measures taken under Article 24;
(c)
any technical and scientific means adequate to determine the species or the exact place where the relevant commodity or relevant product was produced, including anatomical, chemical or DNA analysis;
(d)
any technical and scientific means adequate to determine whether the relevant products are deforestation-free, including Earth observation data such as from the Copernicus programme and tools or from other publicly or privately available relevant sources; and
(e)
spot checks, including field audits, including where appropriate in third countries, provided that such third countries agree, through cooperation with the administrative authorities of those third countries.
Checks on SME traders
1. The checks on SME traders shall include the examination of documentation and records that demonstrate compliance with Article 5(2), (3) and (4).
2. The checks on SME traders may also include, where appropriate, in particular where the examinations referred to in paragraph 1 have raised questions, spot checks, including field audits.
Recovery of costs by competent authorities
1. Member States may authorise their competent authorities to reclaim from the operators or traders the totality of the costs of their activities with respect to instances of non-compliance.
2. The costs referred to in paragraph 1 may include the costs of carrying out testing, of storage and of activities relating to the relevant products that are found to be non-compliant products and are subject to corrective action prior to the release of those relevant products for free circulation, their placing on the market or their export.
Cooperation and exchange of information
1. Competent authorities shall cooperate with each other, the customs authorities from their Member State, the competent authorities and customs authorities from other Member States, the Commission and if necessary, with the administrative authorities of third countries in order to ensure compliance with this Regulation, including as regards the implementation of field audits.
2. Competent authorities shall establish administrative arrangements with the Commission concerning the transmission of information on investigations and the conduct of investigations.
3. Competent authorities shall exchange information necessary for the enforcement of this Regulation, including through the information system referred to in Article 33. That shall include giving access to and exchanging information on operators and traders, including due diligence statements, and on the nature and results of the checks carried out, with other Member States’ competent authorities to facilitate the enforcement of this Regulation.
4. Competent authorities shall immediately alert competent authorities of other Member States and the Commission when they detect any potential non-compliance with this Regulation and serious shortcomings that could affect more than one Member State. Competent authorities shall, in particular, inform competent authorities of other Member States when they detect a relevant product on the market that they consider to be a non-compliant product, to enable the withdrawal or recall of such product from sales in all Member States.
5. At the request of a competent authority, Member States shall provide it with the information necessary to ensure compliance with this Regulation.
Reporting
1. By 30 April of each year, Member States shall make available to the public and to the Commission information on the application of this Regulation during the previous calendar year. That information shall include:
(a)
the plans of checks and the risk criteria on which those plans were based;
(b)
the number and the results of the checks carried out on operators, non-SME traders and other traders in relation to the total number of operators, non-SME traders and other traders, including the types of non-compliance identified;
(c)
the quantity of relevant products checked in relation to the total quantity of relevant products placed on the market or exported and the countries of production; 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 Regulation (EEC) No 2658/87 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;
(d)
in cases of non-compliance, the corrective action taken in accordance with Article 24 and penalties imposed in accordance with Article 25;
(e)
the percentage of checks carried out with prior warnings pursuant to Article 16(13), the use of which shall be justified by the competent authorities in their check reports.
2. By 30 October of each year, the Commission services shall make publicly available a Union-wide overview of the application of this Regulation based on the data submitted by the Member States under paragraph 1.
Interim measures
Member States shall provide for the possibility for their competent authorities to take immediate interim measures, including the seizure of the relevant commodities or relevant products, or the suspension of the placing or making available on the market or the export of the relevant commodities or relevant products, when potential non-compliance with this Regulation has been detected on the basis of any of the following:
(a)
the examination of evidence or other relevant information, including information exchanged under Article 21 or substantiated concerns submitted under Article 31;
(b)
the checks referred to in Articles 18 and 19;
(c)
the identification of risks by the information system referred to in Article 33.
Where necessary, Member States shall immediately inform the Commission and the competent authorities of other Member States about such measures.
Corrective action in the event of non-compliance
1. Without prejudice to Article 25, where competent authorities establish that an operator or trader has not complied with this Regulation or that a relevant product placed or made available on the market or exported is non-compliant, they shall without delay require the operator or trader to take appropriate and proportionate corrective action to bring the non-compliance to an end within a specified and reasonable period of time.
2. For the purposes of paragraph 1, the corrective action required to be taken by the operator or trader shall include at least one of the following, as applicable:
(a)
rectifying any formal non-compliance, in particular with the requirements of Chapter 2;
(b)
preventing the relevant product from being placed or made available on the market or exported;
(c)
withdrawing or recalling the relevant product immediately;
(d)
donating the relevant product to charitable or public interest purposes or, if that is not possible, disposing of it in accordance with Union law on waste management.
3. Irrespective of the corrective action taken under paragraph 2, the operator or trader shall address any shortcomings in the due diligence system with a view to preventing the risk of further non-compliance with this Regulation.
4. If the operator or trader fails to take corrective action as referred to in paragraph 2 within the period of time specified by the competent authority under paragraph 1, or where non-compliance as referred to in paragraph 1 persists, after that period of time competent authorities shall secure application of the required corrective action referred to in paragraph 2 by all means available to them under the law of the Member State concerned.
Penalties
1. Without prejudice to the obligations of Member States under Directive 2008/99/EC of the European Parliament and of the Council ( 23 ) , Member States shall lay down rules on penalties applicable to infringements of this Regulation by operators and traders and shall take all measures necessary to ensure that they are implemented. Member States shall notify the Commission of those rules and of those measures and shall notify it, without delay, of any subsequent amendments affecting them.
2. The penalties provided for in paragraph 1 shall be effective, proportionate and dissuasive. Those penalties shall include:
(a)
fines proportionate to the environmental damage and the value of the relevant commodities or relevant products concerned, calculating the level of such fines in such way as to ensure that they effectively deprive those responsible of the economic benefits derived from their infringements, and gradually increasing the level of such fines for repeated infringements; in the case of a legal person, the maximum amount of such a fine shall be at least 4 % of the operator’s or trader’s total annual Union-wide turnover in the financial year preceding the fining decision, calculated in accordance with the calculation of aggregate turnover for undertakings laid down in Article 5(1) of Council Regulation (EC) No 139/2004 ( 24 ) , and shall be increased, where necessary, to exceed the potential economic benefit gained;
(b)
confiscation of the relevant products concerned from the operator and/or trader;
(c)
confiscation of revenues gained by the operator and/or trader from a transaction with the relevant products concerned;
(d)
temporary exclusion for a maximum period of 12 months from public procurement processes and from access to public funding, including tendering procedures, grants and concessions;
(e)
temporary prohibition from placing or making available on the market or exporting relevant commodities and relevant products, in the event of a serious infringement or of repeated infringements;
(f)
prohibition from exercising the simplified due diligence set out in Article 13 in the event of a serious infringement or of repeated infringements.
3. Member States shall notify the Commission of final judgments against legal persons for infringements of this Regulation and the penalties imposed on them, within 30 days from the date on which the judgments become final, taking into account the relevant data protection rules. The Commission shall publish on its website a list of such judgments, which shall contain the following elements:
(a)
the name of the legal person;
(b)
the date of the final judgment;
(c)
a summary of the activities for which the legal person was found to have infringed this Regulation; and
(d)
the nature and, where financial, the amount of the penalty imposed.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
