EUDR - Frequently Asked Questions (FAQ) Updated July 2026
📌The European Union Deforestation Regulation (EUDR) raises many practical questions for businesses operating within the EU. ESG expert Yoeri Buis, answers the most frequently asked questions in this article to help you navigate your responsibilities and prepare for compliance.
Note: This article was updated in July 2026.
Am I subject to the EUDR?
The EUDR applies to anyone who imports, exports, produces, or trades selected commodities (soy, cocoa, cattle, wood, coffee, palm oil, and rubber) and derived products within the EU for commercial purposes. Both large and small businesses fall under the EUDR.
Am I an operator or a trader?
The EUDR distinguishes between operators and traders.
You are an operator if you place products or commodities on the EU market for the first time or export them. Under the EUDR framework, operators carry the biggest due diligence responsibilities. They are the ones who need to write up and submit the Due Diligence Statements (DDS). To streamline the due diligence process, a distinction has been made between upstream operators and downstream operators.
Traders only deal in products that have already been imported or produced. Traders do not carry any responsibility for producing DDS's, but they are expected to be sure that their products are EUDR compliant.
What is the difference between an upstream operator and a downstream operator?
An upstream operator places or exports EUDR regulated products of commodities on the EU market for the first time. The greatest compliance responsibilities (and therefore also the greatest non-compliance risks) fall to the upstream operators. They are required to fill out and submit a Due Diligence Statement (DDS) for these products.
A downstream operator takes regulated commodities or products already covered by an existing DDS, transforms or processes them into new in-scope products, and places them on the EU market or exports them. Though they don't need to submit their own DDS, they need to collect and retain the DDS registration number associated with their products.
Example: Company A takes coffee beans from Brazil and places them on the EU market. Company B buys from this stock to roast and mill to sell to supermarkets.
Company A is the upstream operator and has to submit a DDS. Company B is a downstream operator, and does not have to submit a DDS.
What is a Due Diligence Statement?
A Due Diligence Statement (DDS) summarizes all the steps that have been taken to ensure that a product is deforestation-free.
Upstream Operators are required to submit the DDS for their in-scope products to the EUDR Information System, a specialized tool integrated into the EU's digital TRACES platform.
Uploading the DDS generates a unique identification code that is linked to the product throughout its movement in the supply chain.
Once the DDS has successfully been uploaded, it becomes a legally binding document. As it is a summary, organizations will have to keep the data supporting their due diligence ready for audit for 5 years.
What is TRACES?
The Trade Control and Expert System (TRACES) is the EU Commission's online platform that logs certifications for products entering the EU market.
Using the EUDR Information System, a specialized tool integrated into the platform, this is where all the Due Diligence Statements (DDS) are uploaded, processed, and registered. Once submitted, TRACES generates a unique identification number for each DDS which follows the product for the rest of its life-cycle.
While only upstream operators are responsible for submitting a DDS, downstream operators and traders are required to register to TRACES. With the unique identification number, everyone in the supply chain can be sure that a product is EUDR compliant -- or report which ones are not.
When does the EUDR apply to my business?
The implementation deadline for large and medium sized enterprises and for enterprises previously subject to the EUTR is 30 December 2026.
The implementation for small and micro sized enterprises is 30 June 2027.
Who conducts audits and how are they assessed?
The Netherlands Food and Consumer Product Safety Authority (NVWA) oversees compliance with the EUDR in the Netherlands. Outside the Netherlands, EUDR compliance is assessed by each country's appointed authority.
During inspections, authorities will assess whether legal requirements such as the due diligence system and reporting obligations are being met. Inspections can occur without notice and include document review, traceability, and risk assessments.
What are the penalties?
Non-compliance may lead to fines of at least 4% of the company's annual EU turnover from the previous year. The fine is proportional to the violation, so if your organization has been judged to have violated the EU Deforestation Regulation in a big way, you'll also be dealing with a big fine.
In addition to fines, authorities may seize goods, impose temporary trading bans, or exclude companies from public procurement.
Organizations who have been judged as having violated the EUDR will also be named on a list published on the EU Commission's website.
What administrative obligations apply to small and micro businesses?
Small/micro businesses as operators:
Small and micro businesses in low-risk countries are required to submit a one-time, simplified Due Diligence Statement (DDS) to the TRACES platform. This simplified DDS only needs to be updated if changes have been made to the product, or if the circumstances of the operator have been changed.
The simplified DDS is outlined in Annex III of the EUDR.
Small/micro businesses as traders:
You are not required to perform your own due diligence or submit a DDS, provided the product is already covered by an operator’s DDS. However, you must retain relevant documentation proving that the products you trade are compliant, including a reference to the operator’s DDS.
A practical and effective way to manage EUDR
All businesses involved in the export, import, or trade of commodities and products affected by the EUDR face an enormous amount pressure ahead of the implementation deadline on 30 December 2026.
This is a hard deadline, meaning that if your organization cannot prove compliance by then, you risk serious penalties.
A practical and effective way to manage EUDR compliance is by using a dedicated digital solution. Such a solution allows you to centralize your due diligence data, automates traceability checks, and keeps your documentation audit-ready.
MasterSustainability.today offers a digital solution that guides businesses from start to end in their EUDR journey. From data collection, supplier collaboration, to TRACES submission, our platform ensures that compliance will become your core strength.
Explore how our EUDR solution fits into your compliance journey
