Micro and Small Primary Operators (MSPOs) and Simplified Declarations
Key takeaway
Why this category exists
When the original EUDR was published, every operator, no matter how small, was required to submit a full Due Diligence Statement with polygon-mapped geolocation for every shipment. For a small Austrian forest owner who harvests once every 30 years, or a Finnish family farm selling timber to a domestic sawmill, this was wildly disproportionate. The December 2025 amendment created a new category, the Micro or Small Primary Operator (MSPO), with a much simpler regime: a one-time Simplified Declaration (SD) instead of a full DDS, and the option to use a postal address instead of GPS coordinates. This lesson walks through who qualifies, how the SD works, and the edge cases that come up in practice.
The Four Conditions for MSPO Status
An MSPO is a subcategory of operator with simplified reporting obligations. The general rules for operators (such as Art. 4(1) EUDR on due diligence) still apply unless the regulation explicitly says otherwise. To qualify, all four of the following must be true (Art. 2(15a) EUDR; FAQ 3.21, V5):
| # | Condition | What it means in practice |
|---|---|---|
| 1 | Natural person, or micro or small undertaking | An individual farmer, or a company under the size thresholds in the EU Accounting Directive: under 50 employees and under EUR 10 million net turnover (small), or under 10 employees and under EUR 900,000 turnover (micro) |
| 2 | Established in a low-risk country | Primary place of business (or for a company, registered office or main permanent establishment) must be in a country classified as low-risk under EUDR benchmarking |
| 3 | Directly placing on the EU market or exporting | The MSPO sells directly into the EU. Producers selling to an intermediary outside the EU who then places on the EU market are NOT MSPOs (and have no EUDR obligations of their own at all) |
| 4 | Products produced by themselves | "Produced" means grown, harvested, obtained, or raised on their own plots of land or establishments. The MSPO must be a primary producer; resellers and importers do not qualify |
All four conditions must be met. Failing any one of them disqualifies the actor from MSPO status, and the standard operator regime (full DDS, geolocation polygons, etc.) applies instead.
Analogy
MSPO status is like a domestic-trader simplified VAT scheme
Many EU Member States offer a simplified VAT scheme for very small businesses: instead of filing detailed quarterly VAT returns, they file once a year on a flat-rate basis. The scheme is only open to small operators below a turnover threshold who meet specific criteria. The EUDR's MSPO regime works the same way. The four eligibility conditions are the gate; once you are through it, you replace the heavy DDS regime with a one-time SD and the option of a postal address. Step outside any condition (your turnover grows, you start importing, your country gets reclassified) and you fall back into the standard regime.
What the Simplified Declaration Contains
The Simplified Declaration is submitted into the EUDR Information System the same way a DDS is, and gets a declaration identifier (the SD equivalent of a DDS reference number). What makes it "simplified" is two things:
- It is a one-time submission, not per-shipment. As long as the MSPO's business activity does not change in a way that introduces new products, the same SD continues to cover all subsequent placings on the market (Art. 4a(3) EUDR).
- Postal address may replace geolocation. The MSPO can describe the place of production using street address fields (street and house number, zip code, city, country) or cadastral information instead of latitude and longitude polygons (FAQ 3.28, V5).
- Multiple products and plots in one SD. An MSPO running a mixed cattle-and-timber farm can declare both commodities and all relevant plots in a single SD (FAQ 3.29, V5).
The MSPO must still ensure that the products they sell are deforestation-free and legal. The simplification is in the paperwork, not in the underlying obligation: the products themselves must comply with Art. 3 EUDR exactly the same as for any other operator.
Postal Address vs. Geolocation: When to Use Which
The postal address option is open only to MSPOs and only where the address actually corresponds to the geographic location of the plot or establishment. A few specific clarifications from FAQ 3.28 (V5):
- The MSPO can use their own private address if it matches the production location.
- The address must point at the actual plot or establishment, not the MSPO's administrative office. A forest owner cannot give the address of a city office where they only do paperwork; they must give the address of the forest itself (or its cadastral identifier).
- For cattle, the postal address must refer to all establishments where the cattle have been kept, not just the final farm.
Worked example
Worked example: Austrian small forest owner
Anna runs a 30-hectare family forest in Austria, a low-risk country under EUDR benchmarking. She is a natural person, qualifies as a small undertaking, sells her logs directly to a German sawmill (export to the EU market across borders), and the wood is harvested by her on her own land. All four MSPO conditions are met.
Before her first placement on the EU market, Anna submits one Simplified Declaration into the EUDR IS. She gives the cadastral identifier of her forest parcels instead of GPS polygons, declares "wood, HS 4403" as the relevant product, and adds her own address as the address of the establishment. The SD gets a declaration identifier.
For the next 30 years (until her next harvest), she does not need to do anything else, as long as the business does not change. When she sells logs to the sawmill, she communicates the declaration identifier to the sawmill (which is a downstream operator) so the sawmill can keep it in its records.
When the SD Must Be Updated or Replaced
An SD remains valid as long as the underlying business reality is unchanged. But there are situations where the MSPO must submit a fresh SD or update the existing one (Art. 4a(3) EUDR; FAQ 3.27, V5):
- New product, new SD. If the MSPO starts placing on the market a product that was not in the original SD, a new SD must be submitted before the first placing of the new product. Worked example from FAQ 3.27: an Austrian farmer with a soybean and cattle SD now wants to buy adjacent forest and sell wood. Wood has a different HS code from soy or cattle and is not covered by the existing SD, so a new SD is required for the wood.
- New plots. If the MSPO harvests from new plots not declared in the SD, the SD should be updated so that the geolocation or postal address remains accurate. Discrepancies between declared plots and actual plots will draw enforcement attention.
- Quantity changes. The SD may be updated if quantities change, but it does not have to be (FAQ 3.27, V5).
- Misrepresentation. If a Competent Authority detects that an MSPO submitted estimates designed to misclassify a non-MSPO operator as an MSPO (e.g. understating turnover or workforce), this is treated as a breach of the regulation with the usual penalty exposure.
Mixed Business: When Only Part of Your Activity Is in Scope
A common real-world situation: a company processes wood (in scope of EUDR) but also runs a transport service for metal pieces (not in scope). Should the metal-pieces revenue count when working out whether the company crosses the small-undertaking thresholds? The answer is no: only the part of the business related to the relevant commodities and products is taken into account (FAQ 3.25, V5).
Worked example
Mixed business example (FAQ 3.25, V5)
A company processes and markets wood products (Annex I, in scope) and also offers transport services for metal pieces (out of scope). It generates 70% of its annual net turnover from wood and 30% from metal transport. When the company assesses whether it qualifies as an MSPO, only the 70% from wood counts toward the size thresholds. The 30% from metal transport is excluded.
If the wood-only figures (turnover, employees, balance sheet) fall below the small-undertaking thresholds, the company can claim MSPO status for its wood activity even though the combined business would not qualify. The company must keep accounting records that transparently allocate revenue, costs, and headcount to the in-scope segment, because Competent Authorities can ask for this evidence.
Cooperatives and Associations as MSPOs
A cooperative or producer association can play one of two roles under the EUDR (FAQ 3.20 and 3.22, V5):
- The cooperative itself is the operator (or MSPO). This applies when the cooperative actually places the product on the EU market in its own name and meets the production requirement (e.g. by harvesting standing timber). If it also meets the four MSPO conditions, it can submit a single SD covering all members' production.
- The cooperative acts as an authorised representative for its members. The cooperative submits DDS or SDs on behalf of individual member-operators (under Art. 6 EUDR). To do this, the cooperative must be EU-established. Legal responsibility for compliance still sits with each individual member-operator.
For smallholder schemes, the second model is often more practical: each smallholder remains the legal operator, but the cooperative does the actual paperwork in the EUDR IS. This avoids forcing each individual smallholder to register and submit declarations themselves.
Mid-Year Size Changes: The Two-Year Rule
An MSPO can stop being an MSPO if the business grows. Equally, a non-MSPO can become an MSPO if the business shrinks. To prevent companies from flipping back and forth based on a single unusual year, the EUDR applies a two-consecutive-financial-years rule (FAQ 3.24, V5):
- An MSPO that exceeds the small-undertaking thresholds for two consecutive years becomes a standard operator from the financial year following the second year. From that point on, full DDS submission is required for every placing on the market.
- An MSPO that subsequently falls back below the thresholds for two consecutive years can return to the SD regime from the year after.
- The same rule applies in reverse for a non-MSPO that shrinks: only after two consecutive years below the thresholds does it qualify as an MSPO and may use a one-time SD.
Irregular or Fluctuating Production
The SD asks for a one-off "estimated annual quantity of relevant products." For producers with irregular harvests (e.g. a forest harvested every 30 years), the rule is straightforward (FAQ 3.30, V5): only the years in which products are actually placed on the market count. A 30-year-cycle forest owner declares the quantity for the harvest year, not zero for the other 29 years.
If a multi-year harvest plan is required by national law (e.g. a 10-year plan in the Czech Republic), the annual estimate can be derived from the plan: either the highest annual estimate or the total quantity divided by the number of years. If neither past data nor a multi-year plan is available (e.g. a brand-new operation), the operator may use the average yield from a comparable plot of land. Whatever method is used, the operator must be able to justify it to the Competent Authority.
Some MSPOs do both: they sell their own production AND they import products from a different source. In that case, the same legal person wears two hats simultaneously (FAQ 3.23, V5). For the imported products, they are a normal operator and must submit a full DDS for each shipment. For their own domestically-produced products, they remain an MSPO and can use the one-time SD with a postal address. Due diligence applies to both flows; only the form of the declaration differs.
For example: a Finnish small farmer grows her own timber (MSPO scope, SD with postal address) AND imports occasional batches of cocoa for a side business (operator scope, full DDS with geolocation polygons for every cocoa shipment). The two flows must be kept separate in her records, but she can manage both through the same EUDR IS account.
Key Takeaways
- An MSPO is a natural person or a micro/small undertaking, established in a low-risk country, who directly places on the EU market products they themselves produced. All four conditions must be met
- The MSPO regime replaces the per-shipment DDS with a one-time Simplified Declaration that can use a postal address instead of GPS geolocation polygons. Multiple products and plots can be combined in one SD
- Postal address must point at the actual production location, not an administrative office. For cattle, all establishments where the animals were kept must be covered
- The SD must be replaced when a new product enters the business; updated when plots change; and may be updated when quantities change. Misrepresentation to qualify as an MSPO is a breach of the regulation
- For mixed businesses, only the part related to in-scope commodities counts toward the small-undertaking thresholds. Transparent accounting allocation is required and may be checked
- Cooperatives can either be the MSPO themselves (if they place products on the market) or act as authorised representatives submitting SDs on behalf of individual member-operators (FAQ 3.20, V5)
- MSPO status changes only after two consecutive financial years above or below the thresholds, in either direction, preventing year-to-year flipping
- A person can be both MSPO (for their own production) and standard operator (for imported products) simultaneously, with each flow handled under its respective regime
Knowledge Check
Test what you just learned
5 questions · check each one as you go
Which of the following is NOT one of the four conditions for qualifying as a Micro or Small Primary Operator (MSPO) under the EUDR?
What is the practical effect of MSPO status on declaration requirements?
An MSPO produces both cattle and timber. How should this be declared?
A small wood-processing company earns 70% of its revenue from wood (in scope) and 30% from transporting metal pieces (out of scope). When working out whether it crosses the small-undertaking thresholds for MSPO purposes, which figures count?
An MSPO whose business has been the same for years now plans to start placing on the EU market a new wood product not covered by its existing SD. What must the MSPO do?