Fast Bites
- Non compliance with the EUDR will lead to a wonderful of no less than 4% of EU-wide turnover within the earlier monetary yr
- The wonderful might improve with repeated infringements
- Entry to EU public funds and procurement could also be blocked
- Popularity might be broken, as the vast majority of EU shoppers oppose deforestation
We’re already greater than midway by means of the yr delay to the EUDR. As MEPs debate the details of the regulation in Parliament, companies should be ready for its coming into drive on December 30.
In accordance with a recent analysis, nonetheless, solely 30% of upstream actors and 12% of downstream have programs in place to hint deforestation.
Complying with the regulation is deeply necessary. The penalties for failing to take action are sometimes harsh.
Who makes and enforces penalties?
The EU itself set out a framework, as a part of the original EUDR regulation, which penalties should adhere to.
Nonetheless, it’s as much as member states themselves to design such penalties, in addition to to hold out their enforcement.
Legal responsibility for non-compliance in the end lies with firms that are non-compliant. Even SMEs, whereas they’ve fewer due diligence obligations and don’t want to hold out reporting, are usually not exempt from the results of non-compliance.
Monetary penalties
Maybe the obvious consequence of not complying with the EUDR is that you’ll in all probability be fined.
How a lot? Properly, it relies upon. The member states in the end determine the precise quantity. Nonetheless, the EUDR itself has set clear decrease limits for what these penalties might be.
The full wonderful will probably be no less than 4% of your turnover inside the EU within the earlier monetary yr.
Moreover, it should doubtless improve with every infringement, the quantity getting higher with extra cases of non-compliance
The last word goal of such a wonderful is, after all, to deprive the non-compliant enterprise of the financial advantages of its non-compliance.
Additional to this, any revenues created from the non-compliant product will probably be confiscated.
Additionally learn → How much the EUDR will cost businesses – and consumers
Restrictions on buying and selling within the EU
A major consequence of non-compliance will probably be shedding entry to the EU, in a variety of methods.
Firstly, non-compliant merchandise will after all not be allowed to enter the bloc. On discovery of non-compliance, the product shall even be instantly confiscated.
Moreover, repeated incidents of non-compliance might lead to additional restrictions, reminiscent of being briefly excluded (for a most of 12 months) from EU public funding and public procurement.
Alongside this, non-compliance might lead to being briefly prohibited, in instances of repeat offence, from placing any of the related commodities on the EU market.
Lastly, chances are you’ll be prevented from utilizing the simplified due diligence course of, which is in place for these importing from nations categorised as low threat.
Reputational injury
This consequence is barely extra speculative than the others, as fame can’t be legislated for.
However, it’s totally doable that non-compliance, particularly if deliberate, might result in reputational injury.
That is borne out by analysis. In accordance with information revealed by the World Wildlife Fund (WWF), seven in 10 European shoppers (round 73%) need deforestation-linked merchandise off the market.
Thus, such reputational injury might impression your gross sales if shoppers determine to not purchase from a non-compliant firm.
As a part of the penalty for non-compliance, the European Fee will publish a listing of these judged to be so on its web site.
