Nová legislativa EU v rámci boje s odlesňováním - část devátá: vážně musím?

New EU legislation to combat deforestation - part nine: do I really have to?

The Regulation poses considerable challenges (see, for example, episodes on obligations or penalties). The scope of the Regulation, which can be expected to evolve continuously, the obligations that go far beyond routine care, or the information systems that are still not available, present a daunting task. This raises the question for many of us as to whether navigating the intricate labyrinth of the EUDR is truly necessary. And the answer? Probably yes.

Unlike other European Union regulations, the EUDR does not contain a de minimis exemption. No matter how small (or large) the number of relevant products or commodities appearing within your business, you need to be wary. If the other prerequisites of the regulation are met, any amount of relevant commodity can give rise to extensive obligations.

However, the Regulation does contain certain exemptions - the most discussed being recycled products and packaging materials.

The general exemption from the scope is (in the words of the Regulation) goods if they are produced entirely from material that has completed its lifecycle and would otherwise have been discarded as waste. The word exclusively is a “problem” - for example, the production of recycled paper generally uses non-recycled components (albeit in small proportions). In such case, since the goods are not made exclusively from recycled material, the EUDR requirements, including due diligence, will need to be met in relation to the non-recycled components. Making full use of this exemption may therefore be particularly difficult.

Another exemption, this time of a specific nature, is packaging materials. First of all, it is important to clarify which packaging materials are covered by this exemption - while the Regulation only mentions the exemption in relation to a specific group of packaging materials made of wood, some of the European Commission's materials also foresee an exemption for packaging materials made of cardboard, paper or paperboard.

In any case, these packaging materials must be used (again in the words of the Regulation) exclusively as packing material to support, protect or carry another product and must not perform any other function. Even the fulfilment of this exemption can prove complicated - if the material, in other respects purely packaging, gives the product a 'substantial character' (such as decorative or gift boxes), then it performs that other function and falls within the scope of the Regulation.

Like the Regulation itself, its exemptions - and exemptions from the exemptions - raise a number of interpretative issues. We will keep an eye on how the competent authorities, both Czech and EU, will deal with them.

If you would like more detailed information, please contact the authors of this article or other members of the EY team with whom you work.

Authors:

Jan Turek

Veronika Juhasová