The European Union Regulation on Deforestation-Free Products (“EUDR”) entered into force on 29 June 2023 and will become fully applicable as of 30 December 2025 for large and medium-sized operators and traders, and from 30 June 2026 for micro and small enterprises. However, the European Commission has indicated that it is considering postponing its application until December 2026.

The Regulation prohibits the placing on the market or export from the European Union of certain products that do not comply with its requirements, thereby preventing deforestation and forest degradation, contributing to the preservation of biodiversity, and supporting the achievement of the EU’s environmental objectives.

The rules set out in the Regulation cover various actors in the supply chain of specific products – operators and traders. According to points (15) and (17) of Article 2 of the EUDR, operators are any natural or legal persons who, in the course of a commercial activity, place the relevant products on the market or export them; traders are all other persons in the supply chain, other than operators, who make the relevant products available on the market.

Thus, under Article 3 of the EUDR, the relevant products must meet the following requirements:

▪️ They must not be associated with deforestation;

▪️ The production of the products must comply with the applicable legislation in the country of production; and

▪️ They must be covered by a Due Diligence Statement (“DDS”).

These requirements translate into different obligations and responsibilities that must be assumed by operators:

▪️ They must not place non-compliant products on the market;

▪️ They must exercise due diligence by implementing an appropriate methodology and submitting a Due Diligence Statement (“DDS”);

▪️ They must maintain a transparency record through the registration and uploading of documents in the EU Information System (“EUIS-EUDR”).

Accordingly, the implementation of a due diligence methodology should at least include the collection of relevant information, the assessment of risk levels, and the mitigation of risks. Only after completing this stage may companies submit the DDS to the EUIS-EUDR, and subsequently upload the supporting documents containing relevant information obtained during the first stage, keeping those documents available for inspection by the competent authorities for a period of five years.

In the event of non-compliance with the above obligations, or if deforestation is found to have occurred in the production of the products, corrective measures may be applied under Article 24 of the EUDR. Failure to comply with such corrective measures may result in the imposition of fines, confiscation of the products or proceeds derived from their sale, temporary exclusion (for up to 12 months) from public procurement procedures and access to public funding, among other sanctions.

The application of the EUDR will have significant practical implications for various sectors of the market.

In the field of public procurement, companies must ensure that their tenders comply with the requirements of the Regulation, failing which they may be excluded from procedures under Article 70(2)(f) of the Portuguese Public Contracts Code. From an environmental law perspective, non-compliance may trigger civil liability under the Portuguese Environmental Liability Act (Law No. 147/2008 of 29 July), requiring companies to fully remedy any damage resulting from the import or marketing of products associated with deforestation. Moreover, breaches of the EUDR provisions will also fall within the scope of the national environmental administrative offence regime (Law No. 50/2006 of 29 August), subjecting companies to substantial fines and ancillary sanctions such as suspension of operations, loss of licenses, or disqualification from access to public support.

Companies should ensure the implementation of effective due diligence mechanisms throughout their supply chains, guaranteeing product traceability, verification of compliance, and the maintenance of reliable records demonstrating adherence to the EUDR. The consistent and preventive adoption of these measures will not only mitigate legal and financial risks but also strengthen the trust of clients, business partners, investors, and consumers.