Traceability

Traceability to the plot of land (i.e. the requirement to collect the geographic coordinates of the plots of land where the commodities were produced) is necessary to demonstrate that there is no deforestation occurring on a specific location. The Regulation requires operators and traders which are not SMEs to collect geographic coordinates of the plots of land where the commodities were produced. The geolocation coordinates need to be provided in the due diligence statements that operators are required to submit to the Information System. Without those placing on the EU market or export of the products is not allowed. 

The traceability requirements apply to each batch of imported/exported/traded relevant, i.e. covered by the Regulation, commodities. 

Geographic information linking products to the plot of land is already used by part of the industry and a number of certification organisations. Remotely sensed information (air photos, satellite images) or other information (e.g. photograph in the field with linked geotags and time stamps) may be used for verifying if the geolocation of declared commodities and products is linked to deforestation. 

Collecting the geolocation coordinates of a plot of land can be done via mobile phones, handheld Global Navigation Satellite System (GNSS) devices and widespread and free-to-use digital applications (e.g. Geographic Information Systems (GIS)). These do not require mobile network coverage, only a solid GNSS signal, like those provided by Galileo. 

For plots of land of more than 4 hectares used for the production of commodities other than cattle, the geolocation must be provided using polygons, meaning latitude and longitude points of six decimal digits to describe the perimeter of each plot of land. For plots of land under 4 hectares, operators (and traders which are not SMEs) can use a polygon or a single point of latitude and longitude of six decimal digits to provide geolocation. Establishments where cattle are kept can be described with a single point of geolocation coordinate. 

For products traded in bulk, such as soy or palm oil, this means that the operator (or traders that are not SMEs) needs to ensure that all plots of land involved in a shipment are identified and that the commodities are not mixed at any step of the process with commodities of unknown origin or from areas deforested or degraded after the cut-off date of 31 December 2020. 

For relevant composite products, such as  wooden furniture with different wood components, the operator needs to geolocate all the plots of land on which  relevant commodities were produced. The relevant commodities’ components may be neither of unknown origin, nor from areas deforested or degraded after the cut-off date. 

Mass balance chains of custody that allow for the mixing, at any step of the supply chain, of deforestation-free commodities with commodities of unknown origin or non-deforestation-free commodities are not allowed under the Regulation, because they do not guarantee that the commodities placed on the market or exported, are deforestation-free. Therefore, the commodities placed on the market, or exported, need to be segregated from commodities of unknown origin or from non-deforestation-free commodities at every step of the supply chain. As mass balance is therefore to be ruled out, full identity preservation is not needed. 

If part of a relevant product is non-compliant, the non-compliant part needs to be identified and separated from the rest before the relevant product is placed on the market or exported, and that part may be neither placed on the market nor exported. 

If identification and separation cannot be done, for instance because non-compliant products have been mixed with the rest, then the whole relevant product is non-compliant as it cannot be guaranteed that the conditions of Article 3 of the Regulation are met and therefore it may be neither placed on the market nor exported. 

For instance, when bulk commodities have all been mixed and are linked to several hundred plots of land, the fact that one of the plots of land has been deforested after 2020 would make the whole relevant product non-compliant. 

This is with no prejudice to other situations, however defined, where 100% of relevant commodities or relevant products placed on the market 1) can be traced to the plot of land, 2) is legal and deforestation free by the meaning of the regulation, and 3) at no point in time has been mixed with commodities of unknown origin or non-deforestation-free. 

The Regulation requires that commodities placed on the market or exported must have been produced or harvested on the land designated as a plot of land. The absence of a land registry or formal title should not prevent the designation of land that is de facto used as a plot of land (see below).  

Farmers can collect the geolocation of their plots of land regardless of whether they are entered or not in a land registry or the lack of IDs or titles over their land. Unless they are direct suppliers of the operators or operators themselves, no personal information is required from the farmers and the geolocation of the  plot used to supply commodities for placing on the EU market is sufficient. 

As regards the legality requirement in relation to land use right (Art. 2 (40)a of the Regulation), the Regulation requires compliance with national laws. If farmers are legally allowed to farm and sell their product under the national laws (which might lack a property register and where some farmers might lack IDs), then that would also mean that operators (or traders that are not SMEs) would generally be able to meet the legality requirement when sourcing from those farmers. Operators (or traders that are not SMEs), nonetheless, would need to verify that there is no risk of illegality in their supply chains. 

There are many different means that operators (or traders that are not SMEs) already use today to collect the geolocation and legality information: some resort to mapping directly their suppliers, while others rely on intermediaries like cooperatives, certification bodies, national traceability systems or other companies. Operators (or traders that are not SMEs) are legally responsible for ensuring that the geolocation and legality information is correct, regardless of the means or intermediaries they use to collect that information. 

Relevant commodities and relevant products cannot be placed on the market or exported unless they have been produced in accordance with the relevant legislation of the country of production as per the requirement set out in Art. 3(b). 

The obligations under Art. 3 are cumulative: the legality requirement (Art 3(b)) has to be fulfilled in addition to the ‘deforestation-free’ requirement (Aricle3(a)) and the requirement for the commodities or products to be covered by a due diligence statement (Art.3(c)). 

Yes, but it is the operator who is ultimately responsible for its accuracy and not the producer who provides it. The Regulation does not apply to producers which do not place products on the Union market themselves (and thus do not fall under the definition of operators and traders). 

In such a case, the operator will have to ensure that the area where the relevant commodity was produced is correctly mapped and that the geolocation corresponds to the plot of land.  Among measures which the operator can use are support for suppliers to meet requirements of this Regulation, in particular for smallholders, through capacity building and other investments. 

Operators and traders which are not SMEs need to verify and be able to prove that the geo-location is correct. 

Ensuring the truthfulness and precision of geolocation information is a crucial aspect of the responsibilities that operators and traders must fulfil. Providing incorrect geolocation details would constitute a breach of the obligations of operators (and traders that are not SMEs) under the Regulation. 

Operators (and traders which are not SMEs) and enforcing authorities could cross-check the geolocation coordinates against satellite images or forest cover maps to assess if the products meet the deforestation-free requirement of the Regulation. However, the operators (and traders that are not SMEs) remain liable. 

The EU Member States’ competent authorities (EUMS CAs) should carry out checks to establish that the relevant commodities and products that have been or are intended to be placed on or made available on the market or exported, come from deforestation-free plots of land and were produced legally (as per their obligation under Art. 16). This includes conducting checks on the validity of the due diligence statements, and the overall compliance of the operators and traders with the provisions of the Regulation. 

For more information on the scope of EUMS CAs obligations, please refer to Articles 18 and 19 of the Regulation. 

In the context of the implementation of this Regulation, Competent Authorities of EU Member States will use the definitions set out in Article 2 of the Regulation. 
A regulation is a binding legislative act in the EU. It must be applied in a harmonized manner in its entirety in the 27 EU Member States. 

The geolocation information obligation to be provided in the due diligence statements, via the Information System, is connected to each relevant product. Operators (or traders that are not SMEs) will thus need to indicate this information each time they intend to place, make available on the market or export a relevant product. The due diligence must be repeated (i.e. updated) for each relevant product, including providing the geolocation coordinates accordingly.

Polygons are to be used to describe the perimeter of the plots of land where the commodity has been produced. Each polygon should indicate one single plot of land, whether contiguous or not.  Where relevant products are made of commodities from several plots of land, several polygons must be provided in one due diligence statement. A polygon cannot be used to trace the perimeter of a random land area that might include plots of land only in some of its parts. 

There is neither an obligation nor a possibility to provide the plot of land information by means of circumference. For plots of land of more than four hectares (for the production of the relevant commodities other than cattle), geolocation has to be provided using polygons (not a unique central point with a circumference) with sufficient latitude and longitude points to describe the perimeter of each plot of land. 

The operator needs to declare the origin of all goods effectively shipped to the EU. 

For example, if compliant goods from multiple origins are mixed into the same silo, and then some of those goods are shipped to the EU: 

• The origin declared on arrival in the EU must include the origin of all goods that entered the silo since it was last empty (and could therefore potentially be included in the shipment to the EU) 
• Declaring the origin of x amount of goods that entered the silo, where x is the amount shipped to the EU is not allowed under the Regulation, as it would violate the prohibition under the Regulation of placing products of unknown origin on the Union market. 

The thrust of the regulation requires a correspondence between the commodities/products placed on the market and the plots of land where they are effectively produced. However, an operator can, in specific circumstances, provide geolocation coordinates for a number of plots of land higher than those where the commodities were produced. 

If the operator declares ‘in excess’ in the due diligence statement, the operator assumes full responsibility for compliance of ALL plots of land for which geolocation is provided, regardless of whether such plots of land are concerned by the production of commodities/products eventually placed on the market. If one plot of land ‘geolocalised’ in the due diligence statement is not compliant, the entire set of plots of land ‘geolocalised’ is non-compliant. In these cases the operator declaring plots of land in excess has also to carry out full due diligence in compliance with articles 9, 10 and 11, for ALL plots of land declared (including those in excess) and has to provide evidence that 1) the risk of non-compliance has been assessed in accordance with article 10.2 for ALL plots of land, and 2) that, in such assessment, the operator has taken particular account of criteria (i) and (j), of article 10 and 3) that such risk is negligible for ALL plots of land. 

The EU Member States’ competent authorities (EUMS CAs) should carry out checks to establish that the relevant commodities and products that have been or are intended to be placed on or made available on the market or exported, come from deforestation-free plots of land and were produced legally (as per their obligation under Art. 16). This includes conducting checks on the validity of the due diligence statements, and the overall compliance of the operators and traders with the provisions of the Regulation. 

For more information on the scope of EUMS CAs obligations, please refer to Articles 18 and 19 of the Regulation. 

In the context of the implementation of this Regulation, Competant Authorities of EU Member States will use the definitions set out in Article 2 of the Regulation. 
A regulation is a binding legislative act in the EU. It must be applied in a harmonized manner in its entirety in the 27 EU Member States. 

The detailed rules for the functioning of Information System will be established through an implementing act. Stakeholders will be informed and consulted on these developments via the Multi-Stakeholder Platform on Protecting and Restoring the World’s Forests. The Information System will, where possible, facilitate the work of operators by allowing some widely used geolocation formats to be uploaded directly into the system when declaring polygons in a due diligence statement. The Information System will evolve and become more sophisticated over time, based on feedback from users. 

Operators and traders that are not SMEs are required to ensure that the required information on traceability that they supply to competent authorities in the Member States is correct, regardless of the length or the complexity of their supply chains. 

Traceability information can be added up along supply chains. For instance, a large, bulk shipment of soy that has been sourced in several hundred plots of land from several countries would need to be associated with a due diligence statement that includes all relevant countries of production and geolocation information for every single plot of land from all of these countries that has contributed to the shipment. 

Operators (and traders that are not SMEs) are required to collect information on the date or time range of production under the obligations set out in Article 9 of the Regulation. This information is needed to establish whether the relevant product is deforestation-free. That is why it applies to the commodities covered by the Regulation that are placed on the market or to the commodities that are used for the production of relevant products covered by the Regulation. 

For commodities other than cattle, the date of production refers to the date of harvesting of the commodities, and the time range of production refers to the period/duration of the production process (for instance, in the case of timber, “time range of production” would refer to the duration of the relevant harvesting operations). 

For relevant products other than live animals in the cattle commodity, the time range of production refers to the lifetime of the animal including the date of slaughtering. 

N.B: information on date or time range of production of a product operators wish to place on the market or export does not need to be included in the due diligence statement, but operators are required to collect, organise and keep it for five years (Art.9). 

Operators (or traders that are not SMEs) who place on the market cattle products must geolocate all establishments associated with raising the cattle, encompassing the birthplace, farms where they were fed, grazing lands, and slaughterhouses, It is not enough to provide the geolocation of the land where the calf was born. 

If an operator (or trader that is not an SME) placing a commodity on the EU market is unable to obtain the information required by the Regulation from upstream suppliers, they must refrain from placing the relevant products on the market or exporting them as that would result in a violation of the Regulation, which could lead to potential sanctions. 

There is no exception for the traceability requirement via geolocation. The operators also have to assess the complexity of the relevant supply chain and the risk of circumvention of the Regulation and the risk of mixing with products of unknown origin or origin in high-risk or standard-risk countries or parts thereof (Art. 13).  If the operator obtains or is made aware of any relevant information that would point to a risk that the relevant products do not comply with the Regulation or that the Regulation is circumvented, the operator shall fulfil all of the obligations under Articles 10 and 11 and shall immediately communicate any relevant information to the competent authority. 

Relevant commodities and relevant products cannot be placed on the market or exported unless they have been produced in accordance with the relevant legislation of the country of production as per the requirement set out in Art. 3(b). 

The obligations under Art. 3 are cumulative: the legality requirement (Art 3(b)) has to be fulfilled in addition to the ‘deforestation-free’ requirement (Aricle3(a)) and the requirement for the commodities or products to be covered by a due diligence statement (Art.3(c)). 

There are no legal obligations applicable to non-EU countries. This Regulation sets out obligations for operators and traders (see chapter 2 of the Regulation) as well as for the EU member states and their competent authorities (see chapter 3 of the Regulation). 

However, many countries around the world have taken action to enhance deforestation-free supply chains, strengthen public traceability systems on relevant commodities, etc., thereby facilitating the tasks of companies under this Regulation. This is welcome, as such developments can greatly help operators and traders to comply with their obligations.