EUDR Low-Risk Countries: Why Low Risk Does Not Mean Exempt from Compliance

Does sourcing from an EUDR low-risk countries mean your business is exempt from compliance? Not necessarily. When discussing the EU Deforestation Regulation (EUDR), country risk classification is often misunderstood.

A supplier may be based in Canada, the United States or Australia all classified as low-risk countries under the EU’s benchmarking system. Does this mean products sourced from these countries are automatically exempt from EUDR requirements?

No.

A low-risk classification can simplify certain due diligence obligations, but it does not remove a relevant product from the scope of the EUDR. For businesses sourcing timber, pulp, paper, packaging and other regulated commodities, understanding this distinction is essential.

Key Takeaways

• Low-risk does not mean EUDR-exempt: Products covered by the EUDR must still meet the regulation’s requirements, regardless of the country’s risk classification.
• Simplified due diligence is conditional: Eligible operators sourcing exclusively from low-risk countries may benefit from simplified due diligence under Article 13, provided the specified conditions are met.
• Information collection remains mandatory: Businesses must still collect the relevant information required under Article 9, including product details, country of production and applicable geolocation data.
• Supply-chain complexity matters: Operators must consider risks associated with mixing products from different origins, circumvention and complex supply chains.
• Risk signals cannot be ignored: If information indicates a risk of non-compliance, businesses may need to carry out further checks and apply the full due diligence requirements.
• Technology remains important: Digital traceability systems can help businesses maintain supplier records, geolocation data, product information and supporting evidence, even when simplified due diligence applies.

What is EUDR country benchmarking?

Under Article 29 of the EUDR, the European Commission classifies countries into three categories based on the risk of producing relevant commodities associated with deforestation and forest degradation.

The three categories are:

• Low-risk countries: Countries assessed as presenting a low risk of producing relevant commodities that do not comply with EUDR requirements.
• Standard-risk countries: Countries that are not classified as either low or high risk.
• High-risk countries: Countries assessed as presenting a high risk of producing relevant commodities associated with deforestation or forest degradation.

The current European Commission classification identifies four high-risk countries:

• Belarus
• North Korea
• Myanmar
• Russia

Countries such as Canada, the United States, Australia, China and all EU Member States are classified as low risk.

The remaining countries not classified as low or high risk fall under the standard-risk category.

This classification determines the level of due diligence and the risk-based approach to regulatory checks. It does not determine whether a relevant commodity or product is covered by the EUDR.

Explore our blog to understand the country risk categories, their implications for businesses, and how the classification influences the due diligence process.

Read our guide to understand EUDR country risk classifications and make informed sourcing and compliance decisions.

What does low-risk classification actually change?

The main benefit of low-risk classification is the possibility of applying simplified due diligence under Article 13.

Where an operator establishes that all relevant commodities and products originate exclusively from low-risk countries or regions, and has assessed supply-chain complexity and the risks of circumvention or mixing with products of unknown, standard-risk or high-risk origin, it may benefit from simplified due diligence.

Under these conditions, the operator is generally not required to carry out the full risk assessment under Article 10 or risk mitigation measures under Article 11.

However, this does not mean that the operator can skip the entire due diligence process.

Important obligations remain:

• Collect the information required under Article 9.
• Obtain the relevant supplier, product and production information.
• Collect the required geolocation information.
• Maintain a due diligence system.
• Assess supply-chain complexity and the possibility of circumvention or mixing.
• Submit the applicable DDS or simplified declaration, according to the operator’s role and the relevant rules.

If new information indicates a risk of non-compliance, the operator must fulfil the full risk assessment and mitigation obligations.

Explore our blog to understand the EUDR risk assessment process, the key risk factors to consider, and how businesses can strengthen their due diligence workflows.

Read our guide to understand EUDR risk assessment and build a more robust approach to identifying and managing supply chain risks.

Why low-risk sourcing does not eliminate traceability requirements

Consider a European paper manufacturer importing virgin pulp from Canada.

Canada is classified as a low-risk country. The manufacturer may therefore be eligible for simplified due diligence if the conditions under Article 13 are met.

However, the manufacturer still needs to establish the relevant information about the product and its origin.

This may include:

• Supplier and product identification.
• Quantity and country of production.
• Required production geolocation.
• Relevant wood species information.
• Supporting information on legal production.
• Records demonstrating the supply chain’s origin and integrity.

A purchase order stating “Canadian origin – low risk” does not provide all the information required under Article 9.

Country benchmarking simplifies the applicable due diligence steps; it does not replace the underlying information requirements.

What happens when low-risk and standard-risk materials are mixed?

This is where the practical challenge becomes more significant.

A manufacturer may source virgin pulp from Canada and combine it with pulp from another country classified as standard risk.

Alternatively, a trader may consolidate materials from suppliers whose original sourcing locations are not fully documented.

In these situations, the operator cannot assume that the entire product qualifies for simplified due diligence merely because one supplier or one component originates in a low-risk country.

Article 13 specifically requires operators to assess the risk of mixing with products of unknown origin or origin in standard-risk or high-risk countries.

Where the operator cannot establish that all relevant commodities and products originate exclusively from low-risk countries or regions, the conditions for simplified due diligence may not be satisfied.

This makes material-level traceability important, particularly for businesses dealing with multiple sourcing regions, suppliers and production batches.

What this means for North American pulp and paper suppliers

North America is an important sourcing region for businesses purchasing wood, pulp and paper products.

The low-risk classification of Canada and the United States can offer a simplified due diligence pathway for eligible sourcing operations.

However, European importers and manufacturers should not treat country classification as a substitute for supplier data management.

They should establish processes to:

• Verify sourcing origin: Confirm where the relevant wood commodity was produced rather than relying only on the supplier’s registered address or dispatch location.
• Collect geolocation information: Maintain the required coordinates or polygon information associated with relevant production plots.
• Maintain species information: Capture the common and scientific names of relevant wood species where required.
• Track material movement: Connect incoming wood and pulp shipments with procurement, inventory and production records.
• Assess mixing risks: Establish whether materials from unknown, standard-risk or high-risk origins have entered the supply chain.
• Retain supporting evidence: Keep supplier declarations, sourcing information and relevant records available for competent-authority checks.

Low-risk sourcing versus standard-risk sourcing

The distinction can be summarised as follows:

The distinction is therefore not between regulated and unregulated products. It is between different levels of due diligence under the same regulatory framework.

How digital traceability supports low-risk and standard-risk sourcing

Even when a business qualifies for simplified due diligence, it still needs reliable information about suppliers, products and sourcing origins.

For businesses operating across multiple countries, this information can become difficult to manage through spreadsheets, email and disconnected ERP systems.

Digital traceability can help businesses:

• Maintain centralised supplier and sourcing records.
• Capture and validate plot-level geolocation.
• Record relevant wood species and product information.
• Connect procurement and incoming material batches.
• Track material movement across processing and manufacturing.
• Identify and document the origin of mixed inputs.
• Maintain due diligence evidence and declaration references.

TraceX EUDR Solutions helps businesses connect supplier onboarding, geospatial information, procurement, inventory, manufacturing and batch-level traceability through digital workflows.

This supports businesses in organising the information needed to apply the appropriate EUDR due diligence process, whether their sourcing originates in low-risk, standard-risk or high-risk countries.

Conclusion: Low-risk sourcing is not a substitute for EUDR readiness

The EUDR country benchmarking system is designed to make due diligence proportionate to the risk associated with different sourcing origins.

For businesses sourcing from low-risk countries, Article 13 can reduce the need for full risk assessment and mitigation when its conditions are satisfied.

But the core information requirements remain.

A business cannot treat low-risk country classification as an exemption from product scope, supplier information, geolocation or applicable declaration requirements.

For European importers, pulp producers, paper manufacturers and timber businesses, the priority should be to maintain visibility into the origin and movement of relevant materials.

Low-risk sourcing may simplify due diligence. It does not eliminate the need to know where your products came from.

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