New EU Legislation Will Ban Imports of Products from Deforested Areas
On April 19, 2023, the European Parliament approved the final text of the regulation that will make it mandatory to conduct due diligence on supply chains of certain agricultural commodities associated with deforestation, in a vote in plenary. The move still requires formal endorsement by the European Council, which is expected to take place in the coming weeks.
The regulation imposes due diligence obligations on European importers prior to the acquisition of certain agricultural commodities and derived products, with the aim of ensuring that commodities have not been produced in areas subject to deforestation as of December 31, 2020.
The products included in the scope of the measure are as well as some derived products such as chocolate, charcoal and leather. Other products may be included in the future.
Due diligence will consist of extensive information collection, including geospatial data from the production area, and risk assessment and mitigation procedures by importers. The import of the products into the EU must also be accompanied by a declaration of due diligence. Sectorial and/or more detailed instructions for the exercise of due diligence may still be published by the European Commission.
In addition, the regulation introduced a risk benchmarking (high, medium and low) to countries and regions of origin of the commodity, allocating different levels of scrutiny. The risk classification should be determined and published by the EU in the months following the adoption of the measure.
The measure will require special attention from Brazilian producers and exporters regarding their supply chains, even if their products do not come from deforested areas. These companies must prepare and anticipate the future requirements of the European Regulation, evaluating opportunities and points of attention of the new measure.
Our team is closely monitoring this new legislation, as well as its technical, operational, legal, and political-commercial developments.