The new law requires companies selling products in the EU to ensure that their products have not contributed to deforestation or forest degradation, to combat climate change and biodiversity loss.
The law does not ban any countries or commodities, but companies must obtain a “due diligence” statement from their supplier confirming that their products do not come from deforested land or have contributed to forest degradation, including primary forests.
The law also requires companies to ensure that their products comply with relevant legislation in the country of production and respect the rights of indigenous people. The products covered by the law include cattle, cocoa, coffee, palm oil, soya, wood, rubber, charcoal, printed paper products, and several palm oil derivatives.
The Commission will classify countries as low-, standard-, or high-risk and apply risk-based controls accordingly. Penalties for non-compliance will be proportionate and dissuasive, with a maximum fine of at least 4% of the non-compliant operator or trader’s total annual turnover in the EU. The law was passed with 552 votes in favor, 44 against, and 43 abstentions.