Downstream Operators

Who are the downstream operators under EUDR? 

Under the EU Deforestation Regulation, a downstream operator is a company that receives products already covered by a Due Diligence Statement (DDS) and places them further on the EU market or exports them. 

These typically include: 

• Manufacturers 

• Processors 

• Retailers 

• Traders 

Unlike upstream operators, downstream operators do not need to conduct full due diligence, but they still have critical compliance responsibilities. 

Do downstream operators need to conduct due diligence under EUDR? 

No, downstream operators are not required to conduct full due diligence or submit a DDS, provided the product they handle is already covered by a valid DDS from an upstream operator. 

However, this does not mean they are exempt from compliance. They must: 

• Ensure the DDS exists and is valid 

• Retain and manage relevant information 

• Maintain traceability across transactions 

Key point: 

Downstream operators rely on upstream due diligence but must still verify and document compliance. 

What are the key obligations of downstream operators? 

Even without full due diligence requirements, downstream operators must: 

Maintain Traceability 

• Keep records of suppliers and customers 

• Ensure products can be linked to DDS reference numbers 

Retain Documentation 

• Store DDS references and transaction data 

• Maintain records for at least five years 

Monitor Compliance Risks 

• Identify and act on any signs of non-compliance 

• Notify authorities if risks are detected 

This ensures continuity of compliance across the supply chain 

What is a DDS reference number, and why is it important? 

A DDS reference number is a unique identifier generated when a Due Diligence Statement is submitted. 

Downstream operators must: 

• Collect DDS reference numbers from suppliers 

• Link them to products and transactions 

Without a valid DDS reference: 

The product cannot be legally placed on the EU market 

Are downstream operators liable for non-compliance? 

Yes. While they rely on upstream operators for due diligence, downstream operators can still face consequences if: 

• They fail to verify DDS references 

• They ignore signs of risk or non-compliance 

• They cannot provide the required documentation during audits 

In short: 

Reduced responsibility does not mean zero liability 

What is the difference between upstream and downstream operators? 

The key difference lies in who performs due diligence but both must maintain traceability. 

What challenges do downstream operators face under EUDR? 

Downstream operators face several practical challenges: 

Limited Visibility 

• Reliance on upstream data 

• Difficulty validating supplier claims 

Data Management 

• Handling DDS references across multiple suppliers 

• Ensuring consistency in documentation 

Risk Exposure 

• Hidden risks in multi-tier supply chains 

• Incomplete or inaccurate supplier data 

These challenges make data validation and traceability critical 

How can downstream operators ensure compliance? 

To stay compliant, downstream operators should: 

• Implement systems to capture and manage DDS references 

• Maintain end-to-end traceability across transactions 

• Establish processes to monitor supplier compliance 

• Use digital tools to centralize and validate data 

The goal is to move from: 
Passive reliance on suppliers 
Active verification and control 

Do SMEs have different obligations as downstream operators? 

Yes. Small and medium enterprises (SMEs) benefit from simplified obligations under EUDR. 

They are generally required to: 

• Collect and store basic information 

• Maintain supplier and customer records 

However, they must still: 

• Ensure traceability 

• Cooperate with authorities if needed 

Simplified does not mean exempt 

How does traceability impact downstream operators? 

Traceability is central to downstream compliance. It ensures that: 

• Products can be linked to verified sources 

• DDS references are correctly applied 

• Supply chain transparency is maintained 

Without traceability: 

Downstream operators cannot prove compliance even if upstream due diligence exists 

Key Takeaway 

Downstream operators under EUDR may not conduct due diligence, but they play a critical role in maintaining traceability, verifying compliance, and ensuring the integrity of the supply chain.