The Complete Guide to EUDR Obligations
An updated overview on requirements for Upstream / Downstream Operators & Traders
While EUDR’s objectives are clear, the regulation itself is notoriously complex, containing precise definitions, layered obligations, and varying requirements depending on the type of actor in the supply chain.
Many businesses, especially those active in international trade, face uncertainty when determining their role under the EUDR and the compliance steps they must take.
This article offers a structured and comprehensive overview of the three key categories – upstream operators, downstream operators, and traders – explaining their specific responsibilities, submission requirements, and available simplifications. By providing this clarity, we aim to help businesses navigate their obligations efficiently and confidently.
What Is The Difference Between Upstream And Downstream?
When the EUDR entered into force in 2023, the terms “upstream” and “downstream” were not explicitly included in the legal text. They only became widely used following the release of updated FAQs and official guidelines, which clarified their meaning within the context of EUDR compliance. These clarifications also introduced specific simplifications for downstream operators.
In traditional supply chain terminology:
Under the EUDR, however, the traditional meaning shifts completely:
In this context, “upstream” and “downstream” specifically refer to categories of operators, i.e. entities responsible for placing relevant commodities or products on the EU market or exporting them from it, or traders.
The three main categories of companies affected by EUDR are in fact upstream operators, downstream operators and traders. By now, you would know what an operator and a trader are, but we will refresh our collective memory and provide you with their definitions, as this will also be helpful afterwards.
In EUDR terms, an operator is a commercial entity that places relevant products or commodities on the EU market for the first time, or exports them from the EU. This includes entities that transform a product with a relevant HS code into another product with a relevant HS code. On the other side, a trader is simply a commercial entity that makes relevant products and commodities available in the European market where they already exist.
The fact that both must qualify as “commercial entities” is no coincidence. For instance, importing a product for personal consumption does not trigger EUDR obligations. Importing with the intent to sell – within a commercial activity – does. The difference mainly lies in the purpose of the action.
Who Are The Upstream Operators?
Upstream operators are the first category of companies falling under the influence of EUDR. You are an upstream operator if:
This first definition comprises the importers, who are the first to place the product in the EU market by bringing it from the outside, and the first placers, who are producing the relevant commodities in the EU (and products) and bringing them to the EU market from within.
The second definition refers to the upstream exporters. This is a very specific group of companies, because the only situation in which the exporters can get their hands on goods in the European market that do not already have a DDS is when they are directly producing those goods and have yet to place them in the market. The peculiarity of this situation is that they do not place the products on the European market, but on markets abroad.
Main EUDR Requirements for Upstream Operators
The EUDR mandates that upstream operators must make sure that the production of the relevant commodities and products does not cause deforestation and is conducted according to the law of the country of production. The evidence supporting these requirements must be provided through a sound due diligence process on the supply chain related to the relevant commodities and products they are importing, exporting or placing on the market for the first time.
Due diligence means collecting the necessary information listed under Article 9 of EUDR, assessing the risk by evaluating the aspects highlighted under Article 10 of EUDR, and finally mitigating the risk as described in Article 11 of EUDR. The final output of the due diligence is the Due Diligence Statement, which must be submitted to the EU Information System TRACES and stored for 5 years.
When do these two types of upstream operators have to submit the Due Diligence Statement (DDS)?
In the case of the importers, they need to produce the Due Diligence Statements before the goods can enter the market. They must submit the DDS to TRACES, selecting the Activity “Import”. Then include the DDS numbers in the EU customs procedure for import, “release for free circulation”.
In the case of the first placers, they will need to have the DDS ready before selling the products to their customers. Hence, it is good practice to insert the reference and verification numbers in the invoice and delivery documents for the European business partners, after submitting them to TRACES as “Domestic” Activity.
In the case of the exporters, they must submit the DDS to TRACES as “Export” Activity and include the DDS numbers when they declare the goods to be placed under the EU customs declaration for export.
Info Point: The customs procedure for importing is called “release for free circulation” or also “customs declaration”. The customs procedure for exporting is simply called “export declaration”.
Additional EUDR Requirements for Upstream Operators
Upstream operators also have secondary responsibilities according to the Regulation. These are:
SME Upstream Operators
Under EUDR, SMEs usually have fewer requirements and lower administrative burdens. However, SMEs acting as upstream operators have the same requirements as non-SMEs, including the execution of a full due diligence and the submission of the DDS to TRACES before placing the goods in the market.
Simplified Due Diligence: Sourcing From Low-Risk Countries
The benchmarking system introduced in May 2025 classified global countries into high-, standard- and low-risk. Most countries belong to the low-risk group, which allows for some simplification:
- Operators must still verify that the product complies with all relevant local laws in the country of production. The legality requirement applies regardless of the risk classification.
- Article 3 of the EUDR official text does not exempt companies sourcing from low-risk countries from submitting a due diligence statement.
- Article 13 explicitly mandates that companies must carry out the data collection, including geolocation data (Article 9).
- The same article also states that such companies are not required to conduct a full risk assessment or apply risk mitigation measures. However, they must conduct a parallel assessment and provide documentation demonstrating negligible risk concerning:
- The complexity of the supply chain, whose explanation is a complete section in the EUDR Guidelines,
- The possibility of mixing with materials from standard- or high-risk countries,
- The likelihood of circumvention of the Regulation.
- If this simplified assessment reveals a non-negligible risk, companies are then required to carry out the full due diligence process.
To sum it up, a simplified due diligence is not really much simpler that a full due diligence process. In the next image, we summarise the requirements for your convenience.
In general, it is safe to say that upstream operators have the largest compliance burden compared to the traders and the downstream operators, which will be the topic we will tackle in the next paragraphs.
Who Are The Downstream Operators?
Under the EUDR, downstream operators are those who take over responsibility after the upstream operators and usually deal domestically, although it’s not a hard and fast rule. You are a downstream operator if the commodities or products you source are already covered by at least one valid DDS.
If the goods do not carry a previous Due Diligence Statement, the operator does not qualify as “downstream”, but as “upstream”. Why? Because when the operator acquires the supplied goods, these goods are either already in the market or need to be sourced from outside the EU market.
In the first case, the goods should already have a DDS from the first-placers, while in the second case, they should be covered by the DDS from the importers. Both actors are regarded as “upstream” operators. If the DDS is not present, then it means that the relevant commodity or product is not compliant with the Regulation.
The category of downstream operators is larger and includes several groups. The first group refers to the manufacturers, which are those companies that buy materials subject to EUDR in the EU market and transform them into new relevant products. According to FAQ 3.1.1. of the 4th edition, such companies shall be considered downstream operators if the output of their operations is a product with a new HS code, among those listed in Annex I.On the contrary, if the output does not entail a change in the HS code, e.g., the company buys the coffee beans to roast them, then it must be considered a trader. You can find more information on traders in the paragraphs below.
The second group involves the downstream exporters that bring relevant goods with a previous DDS outside of the EU market. The third group is composed of re-importers, those companies that import products that were originally exported from the EU market.
Main EUDR Requirements for Downstream Operators
According to EUDR, the downstream operator can benefit from a special simplification introduced with the EUDR Guidelines and the FAQs published in April 2025. In reality, the simplified requirements were already explained in Article 4, paragraph 9, in the official text, but the new material brought further clarity and understanding to the matter, establishing the concept of upstream vs. downstream operators.
This simplification consists of allowing non-SME and SME downstream operators to simply reference the previous DDS instead of conducting a full due diligence. They must still ascertain that due diligence was previously carried out by collecting the reference and verification numbers of all previous DDS and verifying their validity in TRACES or using an EUDR solution provider, like RADIX Tree. After the successful validation, downstream operators must submit a new DDS including all previous DDS numbers.
When do these types of downstream operators have to submit the Due Diligence Statement (DDS)?
In the case of the manufacturers, before placing the goods in the market, they must submit the new Due Diligence Statement, choosing Activity “Domestic” in TRACES. Then, they must include the reference and verification numbers received in the invoice and delivery documents for the European business partners.
In the case of the (downstream) exporters, after selecting the Activity “Export” and submitting the new DDS to TRACES, they will receive the DDS numbers to insert in the EU customs declaration for export.
In the case of the re-importers, they first submit the DDS selecting the “Import” Activity, then attach the new DDS numbers to the EU customs declaration when the company place them under the “release for free circulation”.
Additional EUDR Requirements for Downstream Operators
The EUDR does not require downstream operators to take further steps to check the due diligence of upstream supply chain partners, and this provision excludes downstream operators from collecting data as required in Article 9.
However, the downstream operators will be liable in case of breach of the Regulation, so it is up to them and their risk management procedures to decide whether they want to investigate not only the DDS validity but also the data collected, the reports that the upstream operators must make public according to Article 12, paragraph 3, any past audits, and other publicly available data.
If there are ascertained concerns that the previous due diligence was not appropriately executed and that the goods are non-compliant with the Regulation, they must immediately alert the competent authorities of the Member State where they’re based.
SME Downstream Operators
Although European regulations try to protect SMEs from high administrative burdens, in the case of EUDR, upstream SMEs cannot benefit from any simplification. The reason might be due to the impossibility, once the goods are already in the European market, of tracking the supply chain back effectively.
However, SME downstream operators must only comply with a few basic requirements. They need to retain the reference and verification numbers of the DDS received by the upstream supply chain partners and make sure to pass them along the supply chain.
They don’t need to conduct due diligence or submit any DDS to TRACES. They must keep records of the reference and verification numbers received and pass them along. Also in this case, they need to store this data for 5 years.
Who Are The Traders?
In this chapter, we will discuss the requirements for the last category of companies affected by EUDR: the traders.
The EUDR define those companies that operate domestically within the European borders as traders. In this case, companies are not bringing the goods inside or outside the EU market, and they are not placing them for the first time or manufacturing them into new relevant products.
They just limit themselves to moving relevant commodities and products along the supply chain until they reach the final consumers. Basically, this category refers to dealers, distributors, and retailers.
EUDR Requirements for Non-SME & SME Traders
The requirements for non-SME and SME traders are closely aligned with those of the non-SME and SME downstream operators. The non-SME traders share the same obligations as non-SME downstream operators, meaning that they need to ascertain that the due diligence was executed upstream, conduct any additional checks they see fit based on the supply chain complexity and fragmentation, and finally submit the DDS referencing all previous DDS received from upstream business partners.
On the contrary, SME traders follow the path of SME downstream operators, meaning that they only need to collect the reference and verification numbers of the upstream DDS and pass them to the downstream business partners.
Right Categorisation as Key to Correct Compliance
It would be naïve of us to assume that each company cover just one specific role. In a globalised world, where international supply chains are sophisticated and deeply intertwined, we know that it is more likely that a company covers multiple different roles than a single one.
Even so, this article helps you determine your company’s position and the actions required to ensure compliance with the EU Deforestation Regulation. The obligations are not interchangeable and cannot be merged; they are cumulative. Therefore, a company acting as both an upstream and a downstream operator must comply with the full set of requirements attached to each role.
However, correctly identifying whether a company is upstream, downstream, or a trader is not always straightforward. Understanding the nuances is essential, as misclassification can lead to non-compliance and potential penalties. Clear categorisation, combined with a well-implemented due diligence process, is the cornerstone of meeting EUDR requirements and maintaining optimised and lawful trade operations.
We summarise below the main takeaways:
RADIX Tree as your EUDR Solution
RADIX Tree is an end-to-end solution that enables you to reach supply chain compliance from start to finish without the need for further integrations, partners or contracts.
The platform enables the automated collection and reporting of data. It also provides templates and instructions on which documents are required in each situation, thus reducing the effort and costs for the operator.
Above all, RADIX Tree is the smart tool that minimises the financial impact of supply chain compliance because it offers service packages to suit the size of your business – individually expandable and customisable.
