Due Diligence Statements and the Information System
The declaration that unlocks the market
The due diligence statement is the formal legal declaration an operator submits before placing a relevant product on the EU market or exporting it. It is submitted electronically through the EUDR Information System (EUDR IS), receives a unique reference number, and links the product to the operator's due diligence process. Without a valid statement, no product may legally enter the EU market.
What Is a Due Diligence Statement?
Under Article 4 of the EUDR, operators must submit a due diligence statement through the EUDR Information System before each placement on the EU market or export. The statement is not simply a self-declaration that a product is compliant: it is a legally binding declaration that:
- Due diligence has been exercised in accordance with the regulation.
- No or only negligible risk of non-compliance was found (or, if non-negligible risk was found, that it has been mitigated to a negligible level).
- The product covered by the statement is deforestation-free and legally produced.
Operators are legally responsible for the accuracy of their due diligence statements. A false or inaccurate statement exposes the operator to the full range of penalties under the regulation, including fines of up to 4% of annual turnover, confiscation of goods, and market access prohibition. The statement is therefore not a box-ticking exercise but a representation of legal accountability.
The EUDR Information System
The EUDR Information System (EUDR IS) was launched on 4 December 2024 and serves as the central electronic platform for all due diligence statement submissions. It is operated by the European Commission and accessible via the EU's official digital services infrastructure. Its key functions include:
- Statement submission: Operators and non-SME traders submit their due diligence statements through the system, which generates a unique alphanumeric reference number for each validated statement.
- Reference number issuance: Each valid statement receives a unique reference number that must accompany the product through the supply chain. Downstream traders (including SME traders) must keep this reference number and be able to link their supply to the original statement.
- Customs integration: The system interfaces with EU customs IT systems (the Single Window environment). Customs authorities can verify whether a product entering the EU has a corresponding valid due diligence statement before it clears customs.
- Authority access: Competent authorities in all 27 Member States can access the system to verify statements, cross-check information, and support enforcement activities.
- Transparency layer: Certain information about submitted statements is made publicly accessible, supporting transparency and enabling civil society to monitor compliance patterns.
The EUDR IS as a passport control system for commodities
Think of the EUDR Information System as the equivalent of passport control for commodities entering the EU. Just as every person crossing an EU border must present a valid passport that is checked against databases, every relevant commodity entering the EU market must be accompanied by a valid due diligence statement reference number that can be verified against the central EUDR IS database. A commodity without a matching statement is like a person without a passport: it cannot legally cross the threshold.
What Information Is Included in the Statement
The due diligence statement submitted through the EUDR IS must include the information collected in Step 1 of the due diligence process, specifically:
- Product description (type, HS codes, quantity)
- Country of production
- Geolocation data for all production plots
- Dates or time ranges of production
- Supplier and customer information
- A declaration that due diligence has been exercised and no or negligible risk found
This information is stored in the EUDR IS and associated with the unique reference number. Operators must retain all underlying due diligence documentation (the evidence behind the statement) for at least five years and make it available to competent authorities upon request.
How the Reference Number Flows Through the Supply Chain
Once an operator submits a due diligence statement and receives a reference number, that number must accompany the product through subsequent supply chain steps. The flow works as follows:
| Party | Action with Reference Number |
|---|---|
| Operator (importer/first placer) | Submits DDS, receives unique reference number |
| Non-SME trader (downstream) | Must conduct own due diligence and submit own DDS; must reference the original operator's DDS number |
| SME trader (downstream) | Must collect and keep the reference number(s) from supplier(s); must be able to trace products to original DDS |
| Competent authorities | Can verify statements, trace products back to original DDS, and cross-check geolocation data against satellite monitoring |
Annual Reporting for Non-SME Operators
Article 33 of the EUDR requires non-SME operators and non-SME traders to make publicly available an annual report on their due diligence systems. The report must describe:
- The due diligence system established and maintained during the year.
- The measures taken to comply with the regulation, including risk assessment and mitigation activities.
- Where relevant, the outcome of the due diligence (the general level of risk found in the supply chain and how it was addressed).
This annual reporting requirement serves two functions: it creates accountability and transparency, allowing civil society and investors to assess how seriously operators take their EUDR obligations, and it provides competent authorities with a basis for deciding which operators to prioritise for compliance checks.
A due diligence statement for a palm oil shipment
A German food manufacturer imports 500 tonnes of palm oil from Malaysia. Before the shipment clears EU customs, the manufacturer submits a due diligence statement through the EUDR IS declaring: (1) the product is crude palm oil, 500 tonnes, HS code 1511.10, produced in Sarawak, Malaysia; (2) geolocation polygons for 12 supplier plantations are attached; (3) due diligence has been exercised; (4) risk was assessed as negligible based on plantation-level satellite imagery verification and the operator's established risk assessment system. The EUDR IS issues reference number DDS-EU-2026-00123456. This number accompanies the shipment. The customs system verifies the number when the shipment arrives at the Port of Rotterdam before clearing it for entry.
What Happens at Customs
The EUDR IS integration with EU customs systems is a practical enforcement mechanism that operates at the point of importation. When a shipment of a relevant product arrives at an EU port, the importer (operator) must already have submitted a valid due diligence statement. The customs declaration must reference the due diligence statement reference number.
Customs authorities verify the existence and validity of the referenced statement in the EUDR IS. If no valid statement exists, the shipment can be held pending compliance verification. This integration means that EUDR compliance is not merely a paperwork obligation checked after the fact: it is a gate that shipments must pass through in the customs system.
The EUDR Recitals acknowledge the possibility of technical difficulties with the EUDR IS. In the event of a system outage or malfunction, the Commission is responsible for ensuring continuity of operations or providing alternative means of statement submission. Operators are not penalised for system failures beyond their control, but they must demonstrate their good-faith effort to submit statements as soon as the system becomes available.
For practical purposes, operators are advised not to rely on submitting statements at the last minute before customs clearance. Building adequate lead time into compliance workflows, and maintaining complete due diligence documentation that can be made available to authorities even during system disruptions, is strongly recommended by EC guidance documents.
Key Takeaways
- 1The due diligence statement is a legally binding declaration submitted through the EUDR Information System before each market placement or export, declaring that due diligence has been exercised and no or negligible risk found
- 2The EUDR Information System, launched 4 December 2024, serves as the central platform for statement submission, reference number issuance, customs integration, and competent authority access
- 3Each valid due diligence statement receives a unique reference number that must flow through the supply chain: non-SME traders submit their own statements referencing the original, SME traders must keep the reference numbers
- 4Integration with EU customs IT systems means no relevant product can clear EU customs without a verified due diligence statement reference number, making compliance a practical gate at the point of import
- 5Non-SME operators and traders must publish annual reports on their due diligence systems, creating public accountability and a basis for competent authority compliance prioritisation