Regulation No.2023/1115 on the Prevention of Deforestation and Rules for Companies Exporting Products to the European Union 02 October 2024

One of the primary causes of deforestation is the expansion of agricultural land for the production of agricultural products and livestock activities. The European Union published Regulation No. 2023/1115 on the Prevention of Deforestation in the Official Journal of the European Union on June 29, 2023, aimed at preventing deforestation and forest degradation.

Definition of Deforestation

Under the relevant Regulation, deforestation is defined as the conversion of forest areas to agricultural use and for livestock rearing, whether human-induced or not.

Which Products are Covered by the Regulation?
 

The products covered by the Regulation are listed in Annex I and include palm oil, cattle, soy, coffee, cocoa, timber/wood products, and rubber, as well as derived products such as meat, furniture, or chocolate. Importantly, these products fall within the scope of the Regulation as long as they enter the European Market, regardless of where they are produced.

The Regulation will apply to products produced as of June 29, 2023; however, timber and timber products produced before this date and placed on the EU market will be exempted starting from December 31, 2027.

Obligations Under the Regulation:

1. Due Diligence Obligation
 

According to Article 3 of the Regulation, products intended for placement on the EU market or for export must not contribute to deforestation, must be produced in accordance with the national legislation of the relevant country, and a due diligence declaration must be prepared for products listed in Annex I.

2. Due Diligence Declaration

The due diligence declaration must be prepared by the operator and retained for a period of five years. Upon request from the competent authorities, this declaration must be provided to the relevant institution. When preparing the due diligence declaration, exporters must ensure that the information forming the basis of the declaration is collected, assess whether the information contributes to deforestation, and confirm compliance with national legislation while mitigating potential risks.
 

3. Who is Responsible for the Due Diligence Obligation?
 

For exporters based in Turkey, there is no requirement to prepare a due diligence declaration. However, operators who place the relevant products on the EU market or exports them are required to submit a due diligence declaration. Therefore, although the obligation to prepare a declaration does not apply to exporters based in Turkey, information specified in Article 9 of the Regulation must be provided to the EU-based operator due to the export of the product to the EU market.

4. When Will the Due Diligence Obligation Apply?
 

The due diligence obligation will come into effect for non-SME operators/importers on December 30, 2024. For micro and small enterprises, it will take effect on June 30, 2025.

5. What Information Must be Provided?
 

• Product description, including the general and scientific names of the tree for wood products, and a list of all products covered by the legislation contained in the product.
• Product quantity (kg).
• Place of production.
• Production coordinates of all products covered by the legislation used in the production process, production date, and coordinates of all establishments where cattle and products containing cattle are located. (If deforestation/forest degradation is detected for any input used in the production of products made from different inputs, the product will be deemed non-compliant with the legislation.)
• Names and contact information of suppliers from whom products covered by the legislation are sourced.
• Names and contact information of individuals/establishments providing products covered by the legislation.
• Verifiable sufficient data confirming that the products covered by the legislation did not cause deforestation.
• Verifiable sufficient data confirming that the products covered by the legislation were produced in compliance with the relevant national legislation.
   

Sanctions
 

Are any sanctions anticipated?

Pursuant to Article 25 of the Regulation, the authority to determine the sanctions applicable to operators and traders is granted to the member states of the European Union.
 

The applicable sanctions are as follows:

• A monetary penalty amounting to at least 4% of the annual turnover obtained by the company within the EU.
• Seizure of the relevant products and revenue obtained from their sale.
• A 12-month prohibition on public procurement and access to public resources.
• A temporary ban on the placement of products covered by the legislation on the market by the relevant operator.
• Failure to implement the simplified due diligence procedure.
   

It is important to note that these sanctions will not be directly imposed on Turkish companies engaged in the trade or production of relevant products within Turkey. However, it is crucial for ompanies / individuals exporting these products from Turkey to provide the necessary information to operators and traders based in Europe to ensure compliance with the relevant legislation.