EU regulations on deforestation-free products and implications for Viet Nam

Violations of the EUDR may result in the confiscation of goods, administrative fines, or market bans. More seriously, they may damage the reputation of enterprises and the trading relationships of both the firms and their countries of origin in the EU market.

In addition to timber, at-risk products linked to forests, such as coffee, cocoa, palm oil, rubber, soya, beef and leather, are subject to the regulation. Certain derivative products, including paper, wooden furniture, plywood and chocolate, also fall within the scope of the EUDR.

According to the European Union, the aim of the EUDR is to prevent the import or consumption of such products in the EU market, to promote transparent supply chains with traceable origins, and to protect the environment for indigenous peoples and local communities.

According to the Customs Department, timber and timber products exported to the EU market account for only 3.4% of Viet Nam’s total exports in this sector. In addition, derivative goods relevant to the EUDR, such as coffee and rubber, each reach export values of billions of US dollars. This is therefore considered a potential market, and compliance is essential to ensure stable domestic production.

Accordingly, enterprises exporting or importing products into the EU must ensure that their goods are not linked to deforestation or forest degradation after December 31, 2020; comply with the laws of the country of production; provide precise geographical information on where the products were produced or harvested; and establish a due diligence system (DDS) to ensure legality.

Organisations, enterprises and individuals exporting or importing goods into the EU are obliged to collect and store all data related to their products, such as the type and quantity of goods, the geographical coordinates of the place of extraction or production, and the country of production; to carry out risk assessment, analysis and classification; and to submit a statement of compliance to the EU information system before the products are placed on the market.

The EUDR sets out principles and requirements for the DDS to ensure that relevant goods carry no or no significant risk of deforestation, forest degradation or legal violations from December 31, 2020 onwards.

The DDS consists of three core steps: information gathering, risk assessment and risk mitigation. It is based on the principles of prevention rather than remediation, evidence-based assessment, clear traceability, continuity, transparency and accountability.

According to the Viet Nam Academy of Forest Sciences (VAFS), the EUDR classifies three levels of risk -low, standard and high - for the application of the DDS. Viet Nam falls within the low-risk category and may apply a simplified DDS where no warning signs are detected. Thus, Vietnamese enterprises exporting forest-related products to the EU need only comply with the simplified DDS requirements. However, failure to comply fully with EUDR warnings may result in the country being flagged for increased risk and subject to a higher level of DDS.

Dr Nguyen Van Bich of the Silviculture Research Institute under the VAFS noted that there are four groups of risks that may trigger DDS warnings: legal risks, social risks, environmental risks and traceability risks. To mitigate these, supporting tools such as forest management and monitoring systems, together with simple toolkits for assessing risk levels, are needed. Based on this, the relevant authorities will consider and issue DDS decisions and declarations.

To facilitate compliance with the EUDR, the Viet Nam Forest Certification Office (VFCO) has issued detailed guidance on the responsibilities of all stakeholders, from individuals and households involved in forest planting and protection to processing and exporting enterprises.

Accordingly, each stakeholder must thoroughly understand and fully carry out the required declaration procedures in order to ensure DDS compliance for timber and related products exported to the EU, thereby avoiding passivity and minimising risks in commercial activities within this market.

Link to the original article