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 country risk, supply chain complexity, and satellite deforestation analysis
  • 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

In our experience, the "first placer on the EU market" determination is where many businesses struggle. If you use a customs broker, freight forwarder, or third-party logistics provider, they may handle the physical import, but the operator is still the entity legally responsible for placing the product on the market. The EORI number on the customs declaration is the key identifier.

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.

Traders

A trader is any person in the supply chain (other than the operator) who makes relevant products available on the market. The EUDR further splits traders into two categories based on company size:

Non-SME traders and downstream operators have more extensive record and verification obligations than smaller traders, but they do not simply duplicate the original operator's full DDS process in every case. Under the amended EUDR rules, they generally need to register in the Information System, keep the relevant DDS reference and verification numbers, and verify that due diligence was carried out upstream. If there is substantiated concern, they must take appropriate action before making the products available.

Smaller traders have simplified obligations:

  • Must collect and retain supply chain information, including DDS reference numbers where applicable
  • Must keep records of their suppliers and customers for five years
  • Must be able to provide this information to competent authorities on request
  • May benefit from the later application date (30 June 2027), depending on role and product category
  • Generally do not submit their own DDS for products already covered by an upstream DDS

How to Determine If You Are an SME

The EU SME definition applies: a company is an SME if it has fewer than 250 employees and either annual turnover of no more than EUR 50 million or an annual balance sheet total of no more than EUR 43 million. Partner and linked enterprises must be considered when calculating these thresholds.

The Seven Regulated Commodities in Detail

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)

Includes live bovine animals, beef and veal, selected offal or preparations, raw hides and skins, and specified leather headings. The cattle category is notable for its breadth, but finished leather goods should always be checked against the current Annex I code list before being treated as in scope.

6. Rubber (HS Chapter 40)

Covers natural rubber, latex, rubber tires, and manufactured rubber products. The rubber industry's reliance on smallholder producers in Southeast Asia presents similar geolocation data collection challenges to coffee and cocoa.

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 we see: operators assume 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, you must register with the customs authority of the EU member state where your company is established. The registration process varies by country but typically takes one to four weeks.

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 that entered the EU market before the relevant application date are not subject to the EUDR, provided the operator can demonstrate the date of placement with documentary evidence such as customs declarations or invoices.

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 imported in small, non-commercial quantities for personal use are exempt. The regulation does not specify an exact quantity threshold, so this exemption is interpreted strictly.

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. A DDS is still required. The simplification generally means the operator collects the required information but does not need to conduct the full Article 10 risk assessment and Article 11 mitigation workflow unless there is substantiated concern.

What Is NOT Exempt

  • Products with sustainability certifications (Rainforest Alliance, UTZ, FSC): certification can support risk assessment but does not replace the DDS requirement
  • 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: the obligation attaches to the original import

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 period proportionate to the severity of the infringement
  • Prohibition from placing products on the market, in severe cases, a temporary or permanent ban
  • Public naming: competent authorities may publish the names of non-compliant operators

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.