What customs challenges do operators face?
“Zero deforestation” products: what customs challenges do operators face?
Regulation (EU) 2023/1115, known as the "zero deforestation" regulation, marks a major turning point in the European Union's trade and environmental policy. It imposes strict obligations on economic operators who place on the market, make available on the market, or export certain products linked to deforestation.
But what do these concepts mean in practical terms under customs law? And what is the operator’s role in this new framework?
For the record:
This "zero deforestation" regulation imposes requirements on suppliers of the commodities in question (wood, cattle, cocoa, coffee, rubber, palm oil, and soy) and the products derived from them.
Requirements:
- Implement an internal due diligence system within the company
- Due diligence statement:
- To be filed in the European Commission's information systems
- Obtain a reference to the due diligence statement - Include this reference on the customs clearance declaration
When goods enter the EU customs territory: Placing on the market vs. Making available on the market
These two concepts, although similar, have distinct legal implications:
• Placing on the market: this refers to the first time a product is made available on the EU market. In customs practice, this corresponds to the release of goods for free circulation following their importation into the Union. The importer must then pay customs duties on the importation. It is at this point that the due diligence obligations fully apply to the operator. The reference to the due diligence statement must be indicated on the import declaration.
• Making available on the market: this refers to any subsequent supply of goods that have already been cleared through customs upon importation, whether the supply is for payment or free of charge, in the course of a commercial activity. It therefore also applies to distributors or resellers, although their obligations are less stringent than those of the initial operators.
Ultimately, the scope of these two concepts is fundamentally different. That is why the DGCCRF will be responsible for controls carried out within the French domestic market relating to the distribution and marketing chains, while the Customs Administration will be responsible for monitoring data on goods entering and leaving the EU customs territory.
When goods leave the EU customs territory: Export. A new regulatory development
The scope of the Regulation is not limited to imports. It also applies to the export of covered products. European companies must therefore ensure that exported products are also free from deforestation, even if they are not intended for the domestic market.
Who is the "operator" within the meaning of the Regulation?
An operator is defined as any natural or legal person who places a product on the market or exports it. In customs matters, this will be the importer or the exporter, who will, as such, be held liable by the Customs Administration for any failure to comply with the EUDR.
The operator is responsible for:
• the traceability of the product from the plot of land where it was produced,
• compliance with the legislation of the country of origin,
• submitting the due diligence statement in the TRACES computer system,
• transmitting the DD number and the verification number associated with this DD to their customers further down the supply chain.
Challenges for international trade professionals
Are you an importer, exporter, or logistics chain operator?
This regulation calls for a review of supply chains, enhanced collaboration with suppliers, and the integration of environmental requirements into customs procedures.
It is time to anticipate and prepare for these new requirements. Customs compliance is becoming a strategic lever for accessing the European market.
The Fidal Regulatory Group team, experts in this field, are available to discuss your challenges relating to deforestation:
Fidal Paris: Sophie Dumon-Kappe, Laurence Jardin, Thibaut Geib, and Nicolas Lloret Linares
Fidal Mediterranean: Gaël le Roux.
