EUDR Without Confusion: Am I an Operator, Downstream Operator or Trader?

One of the first queries raised by the EUDR is not only which products are affected, but what role each company plays within the supply chain.

This is not a minor issue. Identifying whether an organization acts as an operator, downstream operator or trader determines what information it must collect, what traceability it needs and how it should prepare for the regulation’s requirements.

In many companies, the answer is not unique. The same organization may have different roles depending on the product, origin, supplier or commercial flow. That is why, before reviewing documentation or adapting processes, it is useful to start with a basic question, “What role does my company play within the EUDR?”

Why does your role in the supply chain change your obligations?

The EUDR affects certain commodities and products associated with the risk of deforestation or forest degradation, such as wood, soy, cocoa, coffee, rubber, palm oil and cattle, as well as certain derived products.

However, not all companies have the same obligations. Responsibility depends on the position each actor occupies in the chain: whether it places the product on the EU market for the first time, transforms, exports, distributes or simply makes it available to other customers.

For this reason, correctly interpreting the role is the first step in avoiding two risks: assuming obligations that may not correspond or, more importantly, failing to prepare for those that apply.

What does it mean to be an operator under the EUDR?

Generally, an operator is the actor placing an in-scope product on the EU market, even without importation, meaning when it is produced within the EU itself, or exports it from the EU.

This role may affect, for example, companies that import regulated raw materials or products, manufacturers that place products affected on the EU market or companies that export products included in the regulation from the EU.

The operator usually has a particularly relevant responsibility because it must ensure that the product complies with EUDR requirements before it is commercialized or exported. This involves working with information on origin, traceability, risk assessment and due diligence.

What does it mean to be a downstream operator?

The downstream operator is an important figure for companies that participate in later stages of the supply chain. In other words, organizations that do not necessarily place the raw material or product on the EU market for the first time, but that do transform, commercialize or export affected products that have already gone through a first phase of control or declaration.

This figure seeks to avoid administrative duplication within the chain, but it does not remove the need for control. Downstream companies must be able to link their products with the corresponding prior information, retain references and maintain sufficient traceability to demonstrate that connection.

For many industrial companies, manufacturers, distributors or brands, this is the one area that generates the most questions: it is not always evident where the first operator’s responsibility ends and what documentation the subsequent actor must retain.

What are the responsibilities of a trader?

A trader is the actor who makes products included in the EUDR available on the EU market without necessarily being the actor placing them on the market for the first time.

Its obligations may vary depending on the company’s size and real role in the chain. Traders that are not SMEs may be subject to obligations like those of operators. By contrast, SME traders usually have more limited responsibilities, focused mainly on collecting and retaining information on suppliers, customers and associated references.

That is why it is not enough to define the activity as “distribution” or “commercialization”. It is necessary to review which product is moving, where it comes from, who placed it on the market and what information accompanies each operation.

How do you identify your company’s role?

The most practical way to identify the role is to analyze the product’s journey.

It is advisable to review whether the company places the product on the EU market for the first time, exports, transforms, buys from another European actor or makes it available to downstream customers.

It is also important to confirm whether the product is within the scope, what commodities it contains, which suppliers are involved, what documentation is currently received and the extent to which traceability to origin exists.

This analysis should be carried out by product and supply chain, not only at the corporate level. A company can be an operator in one business line, a trader in another and a downstream operator in a specific operation.

What are the common mistakes when interpreting the EUDR?

One of the most common mistakes is thinking that the EUDR only affects importers of raw materials. Many companies that manufacture, transform, distribute or commercialize derived products may have documentary or traceability obligations.

It is also common to assume that if a supplier has already made a due diligence statement, the company does not need to review anything else. Although responsibility may vary, downstream actors must retain sufficient information and be able to demonstrate the connection with the relevant references.

Another common mistake is waiting until the application date to start collecting data. EUDR traceability requires reviewing suppliers, internal systems, commercial documentation and product flows. In complex chains, this is unlikely to be resolved at the last minute.

How do you prepare before the application date?

The first step should not be to generate documentation in isolation, but to understand the starting point.

This means identifying which products are affected, what role the company plays in each case, what information already exists, what data is missing and which suppliers can provide the necessary traceability.

From there, it is possible to assess the maturity level of the system, detect gaps against EUDR requirements and prioritize actions: from reviewing internal procedures to improving traceability, document management or coordination with suppliers.

This approach makes it possible to move from a one-off reaction to the regulation to more orderly, realistic and sustainable preparation.

How can SGS help?

We can help organizations identify their role within the supply chain, assess the maturity level of their processes against the EUDR and detect gaps in traceability, documentation and supplier management.

Through EUDR gap analysis and specialized traceability and chain of custody services, we provide an independent technical perspective to prepare for compliance in an orderly way.

Understanding whether a company acts as an operator, downstream operator or trader is the first step. Because in EUDR, compliance begins by knowing what role each organization plays within the chain.

For further information, please contact:

Jan Pierre Jarrin Peters
Product Manager EUDR
t: +31 (6) 10881016