TIMBERCHECK™

The EUDR benchmarking system classifies countries as low, standard, or high-risk for deforestation or forest degradation.

It is a critical component of the new EU Deforestation Regulation because it establishes which countries (or parts thereof) will be subject to more scrutiny and import requirements.

This process was to begin when the new law came into effect, which was June 29, 2023. It’s supposed to be completed in the 18 months ending December 29, 2024.

The EUDR benchmarking system penalizes origins labeled “high-risk”

Products from countries (or parts thereof) labeled high-risk by the EUDR benchmarking system will face a higher level of scrutiny, and more due diligence costs. The specific text from the law reads:

“For relevant products from low-risk countries or parts thereof operators should be allowed to exercise simplified due diligence. For relevant products from high-risk countries or parts thereof competent authorities should be required to apply enhanced scrutiny.”

(1) Enhanced scrutiny: Checking 9% of quantity vs zero

Commodities imported into the EU and produced in a countries (are parts thereof) labeled high risk are to be checked more often. According to the EUDR text:

“9 % of the quantity of each of the relevant products that contain or have been made using relevant commodities produced in a country or parts thereof classified as high risk in accordance with Article 29″

Article 16, Paragraph 9

The EUDR text makes zero mention of the quantity of products from origins labeled low risk, and as such, EU member states are presumably not required to check any of these products.

Checking 9% of operators vs 1%

And while the EUDR states that 9% of operators which import products from high risk origins should be checked on an annual basis, only 1% of operators importing products from low risk origins are required to be checked. In the words of the EUDR:

“Each Member State shall ensure that the annual checks carried out by its competent authorities pursuant to paragraph 1 of this Article cover at least 1 % of the operators placing or making available on the market or exporting relevant products that contain or have been made using relevant commodities produced in a country or parts thereof classified as low risk in accordance with Article 29.”

Article 16, Paragraph 10

(2) Higher due diligence costs

Not only will products from countries labeled high risk by the EUDR benchmarking system face increased checks, but they will carry the additional burden of complex due diligence requirements on the part of the importer.

Under the EUDR, importers of certain commodities are required to collect, verify, and communicate information requirements as detailed as the GPS coordinates from the single real estate properties where the products were harvested. Additionally, due diligence is supposed to involve the risk assessment of this data, and risk mitigating measures. The latter two components of this due diligence (risk assessment, and risk mitigation measures) are not required of importers buying product from countries labeled low risk. Per EUDR text:

“For relevant products from low-risk countries or parts thereof operators should be allowed to exercise simplified due diligence.”

Will the European Commission comply with its own law?

The EUDR benchmarking system is supposed to be a transparent assessment. The text reads:

“The classification of low-risk and high-risk countries or parts thereof, pursuant to paragraph 1 shall be based on an objective and transparent assessment by the Commission, taking into account the latest scientific evidence and internationally recognised sources.”

Article 29, Paragraph 3

However, thus far, efforts to access this process, and to find publicly available information about the EUDR benchmarking system have yielded little evidence of a transparent system.

For more on the EUDR benchmarking system, and the criteria the European Commission will use to determine risk see: Will the EUDR label US hardwood lumber high-risk?

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