Introduction
The EU Deforestation Regulation ('EUDR') was published in the Official Journal on 9 June 2023 and entered into force on 29 June 2023,marking the start of its implementation phase. As the EU legislator has adopted a decentralized enforcement approach, Member States need to set up the necessary legal frameworks to fulfil their enforcement duties under the EUDR. As will be discussed below, Belgium has taken a first important step in that regard by recently amending its Product Standards Law to impose penalties on companies that fail to comply with the EUDR. Additionally, we will briefly consider the recent opposition from Member States regarding the EUDR's proposed implementation schedule.
Obligations deriving from the EUDR for industry, the Commission and Member States
The EUDR – whose core purpose is to reduce the EU's consumption of products linked to deforestation or forest degradation – places significant responsibility in particular on industry stakeholders. This responsibility is reflected in concrete due diligence obligations whose scope is specifically defined. The EUDR only applies to specific "relevant commodities" (i.e. cattle, cocoa, coffee, oil palm, soya, rubber, and wood) and "relevant products" listed in Annex I that contain, are fed with, or made using these commodities. The EUDR prohibits companies placing these commodities or products on the EU market, or exporting them from the EU, unless they are deforestation-free, produced in accordance with the production country's relevant legislation and covered by a due diligence statement. To this end, companies must develop a due diligence system that varies depending on the level of risk in the producing country. They are also subject to border controls and risk significant penalties if they are found to violate their obligations.
The European Commission has been granted delegated and implementing powers to further 'flesh out' the EUDR. For instance, by 30 December 2024, the Commission is required to establish an information system containing companies' due diligence statements. Additionally, the Commission will need to classify countries or regions based on their level of deforestation risk, identifying them as low or high risk.
Part of the EUDR concerns 'obligations of Member States and their competent authorities'. It obliges Member States, for example, to conduct checks within their territory to determine if companies comply with the EUDR, to collaborate with the competent authorities and customs authorities of other Member States and the Commission, and to report each year on their application of the EUDR. As part of fulfilling these obligations, Belgium has now amended its laws to include provisions for corrective measures and penalties for EUDR violations. Previously, Belgium had already informed the Commission that it had designated the Federal Public Service Health, Food Chain Safety and Environment ('FPS Health'), as the competent authority responsible for fulfilling the EUDR's obligations.
If you would like to know more about the EU Deforestation Regulation's substantive provisions, have a look at our previous blogpost and webinar recording.
Belgium amends its Product Standards Law
A new 'Law containing various provisions on the economy' was published in the Belgian State Gazette on 31 May 2024. It makes various changes to the Belgian Code of Economic Law and several other laws relating to the Belgian economic legal framework. One of these laws is the Law of 21 December 1998 on product standards to promote sustainable production and consumption patterns and to protect the environment, public health and workers ('Product Standards Law'). It serves as a framework law that provides the legal basis for enacting product standards and determines which authority supervises compliance with these standards. The Law containing various provisions on the economy introduces the following amendments to the Product Standard Law in light of the EUDR's enforcement:
- From 30 December 2024, confiscated products covered by the EUDR, except for cattle, may be sold or donated to a suitable legal entity for research purposes or the public interest through an administrative measure. The products may also be destroyed if they have little to no value for a potential public sale or donation. The exclusion of cattle was recommended by the Council of State, which reviewed the draft Law and noted that this is an agricultural matter that falls within the Regions' competences. The Council of State applied the same reasoning to "other agricultural and livestock products" but this was not expressly included in the final legislative text.
- Anyone who violates the substantive provisions of the EUDR, excluding matters related to export and cattle, is subject to imprisonment from eight days to three years and/or a fine between 160 euros and 4,000,000 euros. The EUDR's inclusion in the Product Standards Law's scope also means that a criminal court may impose additional penalties. For example, and only for repeated violations, this could be the temporary shutdown of the establishment in question. To protect public health and/or the environment, a criminal court may also order the recall of the infringing product, its destruction at the offender's expense or the forfeiture of an illegally-obtained pecuniary advantage. In accordance with the EUDR, these measures will apply from 30 December 2024. They can only be applied to micro- and small undertakings from 30 June 2025. The legislator's rationale for excluding export matters is unclear given the Council of State's recognition of the federal government's competence to impose export bans.
- EUDR violations are subject to either criminal prosecution or an administrative fine. The procedure is initiated by a civil servant writing up an official report and transferring it to the public prosecutor and a jurist-civil servant (a civil servant appointed by the King who has a master's degree in law), the former having the discretion to prosecute. The prosecutor has three months to notify the jurist-civil servant of his/her decision. If the prosecutor does not pursue charges or does not notify them in time, then the jurist-civil servant may impose an administrative fine. The person concerned will be given the opportunity to put forward their defence. If the administrative fine is not paid on time, then the jurist-civil servant will seek payment through the appropriate court, which, for persons not established in Belgium, is the Brussels court.
A (too little, too) late 'rebellion'?
Austria's agriculture and economy ministers reportedly urged the Commission to postpone the EUDR's implementation, citing "insurmountable challenges" for national authorities and industries. In particular, reference was made to concerns that the Commission is considering postponing the release of countries' risk ratings until 2025, with all countries being designated a "standard" level of risk until the methodology is implemented. Austria's plea has apparently gained support from several other Member States, who are not only advocating for a delay but also for exempting small European farms and producers in countries with low deforestation risks from due diligence obligations. Additionally, doubts have arisen about the Commission's ability to establish in time the IT system required for registering companies' due diligence information.
However, even if the Commission agrees to a delay, it seems to lack the unilateral power to push it through. Changing the EUDR's implementation timeline would normally require an amendment of the text, thus needing approval from the European Parliament and the Council. Given the Parliament's previous strong support for the EUDR, it is unlikely to agree to such a delay. The Council may also be reluctant to amend the text, as the EUDR falls under the competence of national environment ministers, who are generally supportive of the legislation, rather than the agriculture ministers. Therefore, it currently seems unlikely that the EUDR's implementation will be delayed.
Conclusion
Belgium's amendments to its Product Standards Law constitute an important step under its enforcement obligations to make the EUDR work. It will be interesting to see, once the EUDR starts to apply, how strict the enforcement by the Belgian authorities will be. Despite challenges and opposition from certain Member States seeking delays and exemptions, the broader support within the European Parliament and among environmental ministers suggests that the EUDR's implementation timeline is likely to proceed as planned. As Belgium and other Member States continue to put in place their enforcement mechanisms, industry stakeholders should make sure to comply with the EUDR's due diligence requirements and ensure sustainable practices across the supply chain.
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