Regulation (EU) 2023/1115, the EU Deforestation Regulation (EUDR), prohibits placing on the EU market, or exporting from it, seven commodities and their derived products unless they are “deforestation-free”, produced legally in their country of origin and covered by a due diligence statement. Postponed twice, it now applies from 30 December 2026 to large and medium-sized companies and from 30 June 2027 to micro and small enterprises, under amending Regulation (EU) 2025/2650. For an importer, the difficulty is not understanding the text. It is obtaining from suppliers data they have never had to provide, and writing into contracts what happens if they fail to provide it.
A medium-sized coffee roaster in Bordeaux buys its green coffee from Honduras, Ethiopia and Brazil. Part of it comes direct, from cooperatives it has worked with for fifteen years; the rest goes through a trader in Hamburg. In the spring, a large retail customer sends it a questionnaire: reference numbers of the due diligence statements, geolocation coordinates of the plots, proof that production was legal. The roaster discovers that its position differs from one bag of coffee to the next: for the coffee it imports itself, it is the operator and carries the full obligation; for the coffee it buys in Hamburg, it is a downstream operator, with lighter obligations. And an Ethiopian cooperative replies that it does not know what a polygon is. That is where the real work begins.
1. The products and companies covered
Seven commodities are covered: cattle, cocoa, coffee, oil palm, rubber, soya and wood. Annex I to the Regulation extends the obligation to a long list of derived products, identified by their customs code: leather, chocolate, furniture, paper, tyres, charcoal, printed books, oils, oilcakes. A furniture maker importing panels, a leather goods company buying hides or a publisher printing abroad may therefore be caught without ever having handled a log or a bean. The scope is wide.
The Regulation distinguishes the operator, who places the product on the EU market for the first time or exports it, from the trader, who sells it on further down the chain. The operator carries the main obligation. The 2025 reform lightened the obligations of downstream operators and traders, who must mainly keep and pass on the reference numbers of the statements filed upstream and verify the identity of their suppliers and customers.
2. The three conditions for placing on the market
Article 3 sets three cumulative conditions. The product must be “deforestation-free”, meaning it comes from land that has not been subject to deforestation after 31 December 2020 (for wood, harvested without forest degradation after that date). It must have been produced in accordance with the relevant legislation of the country of production: land rights, environmental law, labour law, the rights of indigenous peoples, tax and customs rules. Finally, it must be covered by a due diligence statement filed in the EU information system before it is placed on the market or exported.
3. Due diligence in practice
Due diligence has three stages. First, information gathering: description and quantity of the product, country of production, geolocation coordinates of all the plots where the commodity was produced, with a polygon for plots of more than four hectares, identity of suppliers and customers, and verifiable information on legality. Second, risk assessment, against the criteria of Article 10: the country’s risk level, the presence of forests, the complexity of the supply chain, the risk of mixing with products of unknown origin. Third, risk mitigation, where the risk is not negligible: independent audits, additional information, a change of supplier.
The Commission classifies countries into three risk categories, low, standard or high, under Article 29. Sourcing from a low-risk country allows simplified due diligence, without the assessment and mitigation stages, but does not exempt the company from gathering information, including geolocation. Many importers get this wrong: Brazilian coffee or French oak remains subject to plot-level traceability.
4. Penalties
Article 25 requires Member States to lay down effective, proportionate and dissuasive penalties. For legal entities, the maximum amount of fines must be at least 4% of total annual turnover in the Union. On top of that come confiscation of the products and of the revenue from their sale, temporary exclusion from public procurement and public funding, and a temporary prohibition on placing products on the market. The competent authorities work under annual control plans, with higher minimum inspection rates for high-risk countries. The risk is not theoretical.
5. What to write into purchase contracts
The Regulation binds the importer, not its foreign supplier. It is therefore up to the contract to push the obligation down the chain. A useful clause covers at least five points: the supplier’s undertaking to deliver products that comply with the Regulation and to send, before each shipment, the geolocation data and proof of legality in a defined format; a right of audit, on documents and on site, possibly by an independent third party chosen by the buyer; the right to refuse or suspend an undocumented delivery, with no penalty for the buyer; the allocation of compliance costs, which are real for smallholders; and a termination clause for serious breach, together with an obligation to refund advance payments made on lots that the buyer could not lawfully place on the market for lack of the required documentation. Contracts already running, signed before the date of application, need to be reviewed by amendment; otherwise the importer will find itself refusing goods it has committed to buy.
The force majeure clause also needs a fresh look. A supplier that cannot produce the data is not in a force majeure situation in the usual sense, and a buyer that refuses non-compliant goods is not in wrongful breach if the contract provided for it. But if the contract is silent, the argument becomes uncertain, and it often takes place before a court in the seller’s country, which will apply a law that knows nothing of the European regulation and will tend to see the buyer as having simply changed its mind or looked for a pretext to escape a deal that had turned against it, especially where the commodity price fell sharply between order and delivery and the buyer can now source the same goods more cheaply elsewhere (force majeure and hardship clauses).
6. Exports too
The Regulation also covers exports outside the Union. A French trader exporting oak to Asia or processed soya must also file a due diligence statement. The obligation does not stop at importers of tropical products.
The Bordeaux roaster has reworked its contracts with the cooperatives by adding a technical schedule on geolocation, paid for a mapping provider for two of them, and obtained from the Hamburg trader an undertaking to pass on the statement reference numbers. For the Ethiopian cooperative, the question is still open. The Regulation provides no grace period.
Bringing your contracts into line
The firm advises importers and exporters on drafting and renegotiating their international purchase contracts in light of the Regulation, and on disputes with suppliers. See our international contract and international law pages. For an initial discussion, use the contact page.
Further reading: US tariffs: who bears the increase under an existing contract?.
Frequently asked questions
When does the EU Deforestation Regulation apply?
From 30 December 2026 for large and medium-sized companies, and from 30 June 2027 for micro and small enterprises, under Regulation (EU) 2025/2650, which amended the timetable of Regulation (EU) 2023/1115.
Which products are covered?
Cattle, cocoa, coffee, oil palm, rubber, soya and wood, together with the derived products listed by customs code in Annex I, such as chocolate, leather, furniture, paper or tyres.
Is geolocation required for a low-risk country?
Yes. Simplified due diligence removes the risk assessment and mitigation stages, not the information gathering, which includes the geolocation coordinates of the plots of production.
What are the penalties for non-compliance?
Fines whose maximum must be at least 4% of annual turnover in the Union, confiscation of products and revenue, temporary exclusion from public procurement and a temporary prohibition on placing products on the market.
Do contracts with foreign suppliers need to change?
Yes. The Regulation binds the importer, not the supplier. Only the contract can require the supplier to send the data, grant a right of audit and allow the buyer to refuse an undocumented delivery.
On the same subject: origin of goods and customs duties, the costly mistakes, exporting from France in 2026, the legal checklist before signing and governing law and jurisdiction clauses in international contracts.