Avoiding export disruptions when implementing EU anti-deforestation regulations

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Coffee is one of the industries affected by the EUDR (European Union Deforestation Regulation). Photo: ST

According to the Vietnam Trade Office in Belgium, Luxembourg and the EU, the European Union (EU) is issuing detailed guidelines regarding the implementation of the EU Deforestation Prevention Regulation (EUDR). The law will come into effect from 30/12/2024 and will apply from 30/6/2025 for small and medium-sized enterprises.

Accordingly, the new rules apply on import and export from the EU of such products: palm oil, cattle, soybeans, coffee, cocoa, wood and rubber as well as products of origin (such as beef, furniture or chocolate). The regulation applies to all quantities of products, large or small.

Due diligence must be carried out to ensure that products are not deforested, come from land that has not been deforested after 31/12/2020 and comply with the laws of the country where the product is produced.

Regarding traceability, operators must collect information, documents, and data proving that the product is not deforested and legal, such as geographic coordinates, quantity, country of manufacture, etc.

The verification report must be submitted electronically to the deforestation register created by the European Commission. These declarations will be checked in the register and by Member States' authorities.

The Vietnam Trade Office in Belgium, Luxembourg and the EU also outlines the steps to be taken. First is the source of cultivation, the goods must be produced legally and not deforested; the geographical location data of the production area must be collected.

Goods produced illegally, on land deforested after 31/12/2020 or cannot be traced, do not comply with regulations and cannot be placed on the EU market. Compliant goods must be stored separately for items of unknown origin or not meeting standards.

Next, in terms of trade and transport, legal and deforestation-free goods must be separated from other goods during trade and transport. It is not allowed to mix standard and non-standard goods or goods of unknown origin. In such cases, the entire consignment will be non-compliant and cannot be placed on the EU market.

Regarding imports, before placing a product on the EU market, the importer must carry out a due diligence. The importer must also submit a Due Diligence Declaration and will receive a reference number (with a security token), which must be declared in the import customs declaration. Only compliant products can be placed on the EU market. The operator can place a product on the EU market when the product has been granted an import permit by the Customs authorities.

Next, major EU producers of goods must check that due diligence has been carried out at the beginning of the supply chain. Large manufacturers must check the importer's Declaration of Classification (DDS) of the goods and submit their own DDS for their products, using the upstream DDS reference number. The operator will then receive a new DDS reference number and a security token.

Before selling products on the EU market, large retailers must check whether due diligence has been carried out at the beginning of the supply chain.

Retailers must check the DDS upstream in the supply chain and submit their own DDS based on all previous reference numbers. The trader will then receive a new DDS reference number and security token.

Small enterprises (SMEs) do not need to check or submit due diligence reports for products that have been verified in the supply chain.

According to the Trade Promotion Agency (Ministry of Industry and Trade), Europe is an important import market for deforestation-related commodities, including 50% of the world's coffee and 60% of its cocoa. Therefore, the deforestation-free regulation aims to reduce the impact of products purchased by EU citizens on forests and forest areas around the world.

Experts say that in order to meet the high standards of the EU's green policy, Vietnamese manufacturing and exporting enterprises in relevant industries need to closely monitor the progress of green policies in the EU; promptly and accurately identify standards related to their products; prepare, invest and act early and remotely to gradually adapt, ensuring the ability to comply with mandatory requirements when they are officially applied in the EU.