EU Council, Parliament Reach Deal on Diligence Trade Rules to Limit Deforestation
The European Council and Parliament struck a provisional deal to minimize deforestation and forest degradation risk for EU imports and exports, the council announced. The deal, if formally adopted by both bodies, would set mandatory due diligence rules for all traders who "place, make available or export" palm oil, beef, timber, coffee, cocoa, rubber and soy from the EU market.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Derived products, including chocolate, furniture, printed paper and certain palm oil derivatives, would also be subject to the due diligence rules. The EU would carry out a review in two years to see if other products should be covered. Only products produced on land that has not been subject to deforestation or forest degradation after Dec. 31, 2020, would be allowed into or out of the EU.
The due diligence obligations would require operators to trace the goods they are selling back to the plot of land where they were produced. The rules avoid duplication of obligations and would allow small operators to rely on larger operators to prepare the due diligence declarations, the council said. The council and parliament agreed to a benchmarking system to grade third and EU countries' level of risk pertaining to deforestation and forest degradation. This risk level would set the level of obligations for operators and member states' authorities to carry out, including inspections and controls.
The agreement installs "effective, proportionate and dissuasive penalties." Fines would be set at a mark of at least 4% of the operators' annual turnover in the EU and "include a temporary exclusion from public procurement processes and from access to public funding."