EUDR penalties and enforcement: what a failed check costs

What member states must provide for

Article 25 requires penalties that are effective, proportionate and dissuasive, and it specifies what the national regimes must include.

• Fines ≥ 4% Of total annual EU-wide turnover, as a maximum that national law must at least reach. Fines must also be proportionate to the environmental damage and the value of the commodities involved.
• Confiscation Goods & revenue Both the non-compliant products and the revenues obtained from them can be confiscated. Selling the consignment before an authority reaches you does not resolve the exposure.
• Exclusion Up to 12 months Temporary exclusion from public procurement processes and from access to public funding, including tenders, grants and concessions.
• Market prohibition Temporary ban A temporary prohibition on placing or making available relevant products on the market, and, for serious or repeated infringement, a bar on using simplified due diligence.

Member states also have to publish the names of legal persons penalised for infringements. For a company selling to European retailers or consumers, that reputational mechanism is often the more consequential one.

How often you get checked

Article 16 sets minimum annual check rates, and they scale with the country risk classification of where you source from, not with your own size or history.

These are floors, not targets, and they are not the only trigger. Authorities must also act on substantiated concerns: any natural or legal person can submit one, with supporting evidence, and the authority has to assess it. NGOs have been explicit that they intend to use this route, and they have plot-level satellite data of their own.

The border is the real enforcement point. Customs authorities are integrated with the information system. A consignment without a valid due-diligence statement reference does not clear. In commercial terms a held container, demurrage, a missed contract, a spoiled lot, usually costs more and hurts sooner than any fine that arrives eighteen months later.

What authorities can do during a check

• Examine your documentation: the due-diligence system, risk assessments, mitigation records and supporting evidence.
• Examine the goods, including sampling and laboratory testing to verify species or origin. Isotope and DNA testing on timber is established practice and is being applied to other commodities.
• Conduct on-site inspections, including of premises and, where relevant, field verification.
• Take interim measures: suspending the placing of a product, or seizing it, while a check is under way.
• Require corrective action: bringing the product into compliance, withdrawing or recalling it, or having it destroyed or donated for public interest purposes.

The two failure modes that actually get people

In practice, enforcement risk concentrates in two places, and neither is deliberate wrongdoing.

• Undocumented good work. A team investigates a satellite alert, satisfies itself the plot is fine, and files. Eighteen months later nobody can reconstruct what was looked at or who decided. The conclusion was right; the file cannot show it. This is the single most common weakness and it is entirely avoidable.
• Inherited exposure. A downstream operator references an upstream statement without ascertaining that due diligence was genuinely exercised. If the upstream plot data was approximated, the liability travels with the reference number. "My supplier gave me the number" is not a defence.

National variation

The floors are set at EU level; the detail is national. Each member state designates its own competent authority, sets its own penalty schedule within those floors, and decides how it will run checks. The BLE in Germany, the NVWA in the Netherlands, Ruokavirasto in Finland and Skogsstyrelsen in Sweden will not run identical programmes, and the practical experience of being inspected will differ.

If you place products in several member states, you are dealing with several regimes at once. Country pages covering each authority are in preparation.

Related

• Country benchmarking, which check rate applies
• Record-keeping: what you must be able to produce
• What a defensible determination looks like