Webinar on UDR Implementation Guidelines

Aug 22, 2024

Mastering UDR Implementation Webinar Notes

Introduction

  • Hosts: Sebastian Runes and Neils Vardhan (CEO of Intelligence)
  • Purpose: Practical guidelines on UDR implementation, building on previous discussions about legal requirements and company scope.
  • Format: Webinar includes Q&A; recording and slides will be shared post-event.

UDR Timeline and Scope

Key Dates

  • EUDR Start Dates:
    • Large/Medium Companies: 30 December 2024
    • Small/Micro Companies: 30 June 2025
  • Potential for delay advised by EU officials.

UDR Requirements

  • Product-based Regulation:
    • Deforestation-free products: include cattle, cocoa, coffee, palm oil, rubber, soy, and wood.
    • Must comply with local legislation and provide a due diligence statement.
  • Due Diligence Statement: Required for import, trade, and export of relevant products.
    • Must prove deforestation-free status and legal production.
  • HS Codes: Use Annex 1 to determine relevant HS codes for products in scope.

Implementation Steps

Preparation Phase

  • Assess product scope and company role in the supply chain.
  • Identify whether your company is a trader or operator, and which products are relevant.
  • Establish organizational responsibility for gathering information and risk assessments.
  • Consider using external service providers for support.
  • Determine if your company qualifies as an SME (Small and Medium-sized Enterprise).

Information Gathering

  • Create lists of inbound and outbound relevant products:
    • Inbound: Products imported into the EU.
    • Outbound: Products sold or exported from the EU.
  • Gather data from Customs and internal records to identify relevant HS codes and suppliers.
  • Supplier Engagement: Communicate requirements with suppliers regarding origin data and due diligence.

Risk Assessment

  • Conduct risk assessments based on:
    • Geolocation Data: Verify product origin and assess deforestation risks.
    • Compliance with Legislation: Evaluate risks associated with local production laws.
  • Determine mitigation measures based on assessed risk levels (low, medium, high).

Defining Responsibilities

  • Appoint an EUDR Compliance Officer within the organization.
  • Create a process for monitoring compliance and documentation.
  • Review existing supplier contracts to ensure information-sharing obligations.

Deforestation Monitoring

  • Use satellite data to monitor deforestation risks.
  • Engage experts for assessments (e.g., Intelligence).
  • Utilize technology to collect evidence of deforestation and verify claims.

Due Diligence Statement Generation

  • Understand the requirements for submitting due diligence statements:
    • Must include all relevant data supporting compliance with EUDR.
    • Maintain records for 5 years.
  • Regularly review processes for compliance.

Implementation Phases Overview

  1. Preparation Phase (now until September 2024): Assess scope and gather data.
  2. Implementation Phase 1 (September to November 2024): Gather origin data and assess risks.
  3. Implementation Phase 2 (November to December 2024): Familiarize with due diligence statement requirements and submission processes.
  4. Compliance Phase (from 30 December 2024): Maintain compliance and submit due diligence statements.

Strategic Considerations

  • Evaluate the benefits of sourcing from within the EU versus higher-risk countries.
  • Prioritize partnerships with suppliers that provide necessary compliance information.
  • Adjust supplier onboarding processes to incorporate EUDR requirements.
  • Consider building inventory of products before the compliance deadline to ease transition.

Conclusion

  • Successful UDR implementation involves understanding legal requirements, engaging suppliers, and establishing systematic processes for compliance.
  • Future webinars may focus on sharing customer experiences with UDR systems.