As an element of the European Green Deal, the European Parliament and the EU Council adopted on 31 May 2023 the new Regulation (EU) 2023/1115 (“EU Deforestation Regulation” or “EUDR”) that seeks to prevent EU consumption from contributing to worldwide deforestation and forest degradation caused by agricultural expansion associated with the commodities in question as already reported by the ECS Compliance News. The EU Deforestation Regulation will be implemented in the EU from January 2025. The EUDR impacts cocoa, coffee, palm oil, rubber, soya, cattle, wood, and coffee, in addition to the goods manufactured from these materials, including coffee capsules, furniture, automobile tyres, and coffee capsules. Beginning in 2025, the placement or exportation of these raw materials and finished goods from the EU will be restricted to those that were not manufactured in regions that underwent deforestation after 2020, or that are otherwise unrelated to deforest degradation.

Additionally, Swiss firms that wish to export to the EU the raw materials and finished goods impacted by the EUDR will be required to comply with the new regulations. This is the case irrespective of Switzerland’s decision to adopt the EUDR fully or partially or abstain from doing so in its legislation. Switzerland exported to the EU approximately CHF 4 billion worth of EUDR-subject raw materials and finished goods in 2022. In total, the value of exports (EU and non-EU) was approximately CHF 7.5 billion.

The Federal Council deliberated on this subject during its meeting on 14 February 2024. The Federal Council will abstain from amending Swiss law for the time being, provided that mutual recognition with the European Union remains unattainable. Companies run the risk of encountering parallel regulations and duplicating efforts in the absence of mutual recognition. Organisations whose products are not designed for the European Union market and are thus exempt from the EUDR can prevent a substantial supplementary cost by abstaining from adaptation. By the summer of 2024, the Federal Council will conduct a comprehensive evaluation of the situation considering a regulatory impact assessment.

Nevertheless, the Federal Council acknowledges that Swiss companies impacted by the EUDR will bear a greater burden. Its primary objectives are to examine support measures for the affected industries and businesses and to continue the dialogue between the Federal Government and the business community regarding this subject. Additionally, it seeks clarification from the EU Commission regarding the prerequisites for establishing a connection to the EU information system and for the reciprocal acknowledgment of relevant regulations. In addition, the Federal Council wishes to specify which legal modifications would be required to harmonise Swiss law with the EUDR. The Federal Council has declared that it will give an update on the progress of these clarifications following the end of the summer break.