Does the EUDR Apply to Your Business?

If your company imports, exports, or trades relevant products listed in Annex I, the EUDR may apply to you. The regulation applies broadly, but product scope is defined by HS and CN codes rather than by a general idea of "coffee", "soy", or "wood". A chocolate manufacturer importing cocoa butter is just as affected as a trader importing raw cocoa beans when the product code falls within Annex I.

The first step in any compliance strategy is to determine whether your business falls under the regulation's scope and, if so, what your specific obligations are. This guide walks through the key distinctions.

Operators vs. Traders

The EUDR distinguishes between two types of businesses, each with different levels of obligation:

Operators

An operator is any natural or legal person who, in the course of a commercial activity, places relevant products on the EU market for the first time or exports them from the EU. In import workflows, this is often the company whose EORI number appears on the customs declaration.

Operators have full due diligence obligations:

  • Collect comprehensive information on the entire supply chain, including geolocation data for all production plots
  • Conduct a thorough risk assessment covering the relevant Article 10 factors; remote-sensing analysis can support this assessment but is not a mandatory method
  • Implement risk mitigation measures if risk is assessed as non-negligible
  • Submit a Due Diligence Statement (DDS) through the EUDR Information System before placing or exporting relevant products
  • Maintain records for a minimum of five years

Qualifying micro or small primary operators remain responsible for due diligence but use the special Article 4a regime. They submit a one-time simplified declaration rather than a DDS and may provide a qualifying postal address instead of geolocation.

Determining who first places a product on the EU market can be difficult. A customs broker, freight forwarder, or third-party logistics provider may handle the physical import, but that does not by itself make that service provider the operator. The contractual role, customs declaration, EORI details, and who legally places the product on the market must be assessed together.

This role mapping is the first setup step in Bosqio: the operator entity, country, commodity, identifiers, questionnaires, and required documents are configured before evidence collection starts.

Downstream Operators and Traders

A downstream operator places or exports a relevant product made entirely from relevant products already covered by upstream due diligence. A trader makes relevant products available on the market without being an operator or downstream operator.

All downstream operators and traders must:

  • Collect and retain the supplier and buyer information specified in Article 5 for five years
  • Provide that information to competent authorities on request
  • Notify relevant buyers and competent authorities if they obtain or become aware of relevant information indicating possible non-compliance

They do not conduct a second full due diligence process or submit another DDS for products already covered upstream. Only the first downstream operator or trader buying directly from an upstream operator or micro or small primary operator must collect and retain the applicable DDS reference number or simplified-declaration identifier. The EUDR does not require the DDS verification number to be passed downstream.

Non-SME downstream operators and non-SME traders must also register in the Information System. They verify that upstream due diligence found no or only negligible risk when a substantiated concern arises; this is not a routine verification requirement for every transaction. SME downstream operators and traders do not have this additional registration and verification obligation.

How to Determine If You Are an SME

For the EUDR, "SME" refers to Article 3 of Directive 2013/34/EU, not the separate Commission Recommendation commonly used for EU funding. A medium-sized undertaking does not exceed at least two of these three thresholds:

  • EUR 25 million balance sheet total
  • EUR 50 million net turnover
  • 250 employees on average during the financial year

The EUDR FAQ also clarifies that the group-threshold rules in Article 3(5) and (6) of that Directive and the EUR 43 million balance-sheet figure from Commission Recommendation 2003/361/EC do not define SME status for this purpose.

The Seven Regulated Commodities in Detail

The seven commodity categories remain unchanged. Product coverage within those categories depends on the current Annex I. On 13 July 2026, the Commission adopted a delegated act proposing targeted additions and removals, but it must complete European Parliament and Council scrutiny before entering into force. Check the legally effective Annex I rather than relying on a static product list.

1. Coffee (HS 0901)

Includes coffee, whether or not roasted or decaffeinated, coffee husks and skins, and coffee substitutes containing coffee under HS 0901. The supply chain typically involves smallholder farmers, cooperatives, exporters, and importers, with geolocation data needed from the farmer level.

2. Cocoa (HS Chapter 18)

Covers cocoa beans, cocoa paste, cocoa butter, cocoa powder, chocolate, and all preparations containing cocoa. The complexity here is similar to coffee: West African cocoa supply chains often involve thousands of smallholder farmers, and the segregation challenge (keeping compliant and non-compliant cocoa separate) is significant.

3. Soy (selected HS headings)

Includes soybeans, soybean oil, soy flour or meal, and oilcake or solid residues used in animal feed. Soy is particularly significant because it is a major driver of deforestation in South America, and large volumes enter the EU as feed rather than direct food products.

4. Palm Oil (HS Chapter 15)

Covers crude and refined palm oil, palm kernel oil, and numerous derived products found across food, cosmetics, cleaning products, and biofuels. Palm oil derivatives can appear in products where consumers would not expect them, making HS code verification essential.

5. Cattle (selected HS headings in 01, 02, 16 and 41)

The currently consolidated Annex I includes live bovine animals, beef and veal, selected offal or preparations, raw hides and skins, and specified leather headings. The July 2026 delegated act would remove hides, skins, and leather and add frozen cattle tongues if it enters into force. Always check the legally effective Annex I.

6. Rubber (HS Chapter 40)

The currently consolidated Annex I covers natural rubber and a range of listed rubber products. The July 2026 delegated act would remove several entries, including retreaded tyres and specified vulcanised-rubber products, if it enters into force. Product-code verification is therefore essential.

7. Wood (HS Chapters 44, 47, 48 and selected furniture codes)

Includes raw timber, sawn wood, wood-based panels, furniture, pulp, paper, and charcoal. Wood has the most extensive product scope of any regulated commodity, but the 2025 amendment removed printed books, newspapers, pictures, and similar printed products from Annex I.

HS Codes and Annex I

The exact products covered are defined by their Harmonized System (HS) codes listed in Annex I of the regulation. It is essential to check your products' HS codes against this list, as not all products within a commodity chapter may be covered.

For example, within coffee:

  • 0901: Coffee, whether or not roasted or decaffeinated; coffee husks and skins; coffee substitutes containing coffee in any proportion

A common pitfall is assuming that a product is exempt because it is "processed" or "finished." The EUDR covers many derived products explicitly, but only where the relevant Annex I code applies. Always verify the exact 8-digit CN code before deciding whether a product is in scope.

When in doubt, cross-reference your product's 8-digit Combined Nomenclature (CN) code against Annex I. If your CN code falls within a listed heading, the product is covered.

EORI Numbers and Identification

Every operator must be identified by their EORI (Economic Operators Registration and Identification) number where customs identification is required. This is an alphanumeric code used across the EU for customs purposes, typically consisting of the two-letter country code followed by up to 15 characters.

The EORI number is:

  • Required for all customs declarations: it identifies the legal entity responsible for the import
  • Linked to the DDS in the EUDR Information System: the DDS is submitted against a specific operator identity
  • Used by competent authorities for inspections, audits, and enforcement actions
  • Publicly verifiable: anyone can check the validity of an EORI number on the European Commission's EORI validation website

If your company does not yet have an EORI number, register with the customs authority of the EU member state where your company is established. Processing procedures and timing vary by country, so complete this before the first relevant customs declaration.

Exemptions and Special Cases

The EUDR has limited exemptions, and they are narrower than many operators initially expect:

Products Placed on the Market Before the Application Date

Products placed on the market before the relevant application date are generally outside the new obligations if the date can be demonstrated. Production date also matters: except for the special timber transition in Article 37, the EUDR does not apply to relevant products produced before 29 June 2023. Timber and timber products formerly covered by the EUTR follow specific transitional rules through 31 December 2029.

Products in Transit

Products that are physically in transit through the EU, meaning they enter and leave the EU without being placed on the internal market, are exempt. However, products that enter a free zone or customs warehouse and are then released for free circulation are not exempt.

Personal Use

Products genuinely intended for private use or consumption are outside the definition of relevant products entering the market. This is based on purpose, not a general "small quantity" threshold. Commercial activity can still include distribution to non-commercial consumers.

Low-Risk Country Simplification

Products from countries classified as low risk under the country benchmarking system benefit from simplified due diligence, but they are not exempt. An upstream operator generally still submits a DDS; a qualifying micro or small primary operator uses a simplified declaration. The Article 10 risk assessment and Article 11 mitigation workflow generally do not apply under simplified due diligence unless relevant information or a substantiated concern indicates risk.

What Is NOT Exempt

  • Products with sustainability certifications (Rainforest Alliance, UTZ, FSC): certification can support risk assessment but does not replace the due diligence and declaration obligations applicable to the actor's role
  • Products from EU member states: if an EU country produces a regulated commodity, such as wood, the EUDR applies equally
  • Products processed in the EU from imported raw materials are not automatically exempt. If all relevant inputs were already covered upstream, the processor may be a downstream operator with Article 5 obligations rather than an upstream operator submitting a new DDS.

Penalties for Non-Compliance

Competent authorities in each EU member state can impose significant penalties:

  • Fines proportionate to environmental damage and product value, with a maximum level of at least 4% of annual EU-wide turnover
  • Confiscation of the relevant products and any revenue derived from them
  • Temporary exclusion from public procurement and public funding for a maximum period of 12 months
  • Temporary prohibition from placing or making relevant products available on the market or exporting them in cases of serious or repeated infringement
  • Publication of final judgments: the Commission publishes specified information on final judgments against legal persons after notification by Member States

Frequently Asked Questions

Is my company an operator or a trader?

If your EORI number appears on the customs declaration when products enter the EU, you are usually the operator for that import. If you purchase regulated products from another EU-based company and resell them, you are usually a trader or downstream actor. If you are unsure, check who places the product on the EU market or exports it.

Do SMEs have to comply with the EUDR?

Yes. Smaller businesses are not exempt. However, the timing and obligation level can differ by role, size, and product category. Most micro and small operators have a later application date of 30 June 2027, while some timber-sector businesses covered by the EUTR follow the 30 December 2026 date.

What if my product contains a small amount of a regulated commodity?

The regulation covers derived products. If your product contains a regulated commodity as an ingredient (even in small quantities), you must check whether its HS code falls under Annex I. The regulation does not include a de minimis threshold.

Can I delegate my due diligence obligations to a supplier or third party?

You can use third-party services to help conduct due diligence, but the legal responsibility remains with the operator. You cannot contractually transfer your EUDR obligations to a supplier, broker, or service provider.

Sources

Important note

This guide is provided for general information only and is not legal advice. Regulatory requirements, official guidance, and implementation dates can change. Operators should verify current obligations with official sources or qualified counsel before making compliance decisions.