Negligible Risk Under EUDR

Under the EU Deforestation Regulation (EUDR), “Negligible Risk” is the central legal threshold that determines whether a regulated commodity can be placed on the EU market. 

If risk is assessed as more than negligible, the product cannot legally enter or remain on the EU market. 

Definition of Negligible Risk 

Negligible Risk refers to a level of risk where, after conducting due diligence, an operator concludes that there is no or only a minimal, insignificant likelihood that a product: 

• Is linked to deforestation after 31 December 2020 

• Is linked to forest degradation 

• Was produced in violation of applicable local laws 

The regulation does not allow “acceptable risk.” 
Only negligible risk qualifies for market access. 

Why Negligible Risk Is Central to EUDR Compliance 

Negligible Risk is the legal decision point in the due diligence process. 

The workflow under EUDR is: 

1. Collect information 

2. Conduct risk assessment 

3. Apply mitigation measures (if needed) 

4. Conclude whether risk is negligible 

5. Submit Due Diligence Statement 

Without a defensible negligible risk conclusion, submission cannot occur. 

Legal Basis of Negligible Risk 

The concept is embedded in Article 10 of the regulation, which requires operators to: 

• Assess risk of non-compliance 

• Ensure risk is negligible 

• Apply mitigation measures if risk exceeds negligible levels 

This requirement applies to all regulated commodities. 

What Negligible Risk Is NOT 

Negligible risk does not mean: 

• Zero theoretical risk 

• Blind reliance on certifications 

• Supplier self-declarations 

• Regional assumptions 

• Low-risk country status 

It requires documented, evidence-based justification. 

Core Risk Areas Evaluated 

Negligible risk must be evaluated across: 

1. Deforestation Risk 

Was the land deforested after 31 December 2020? 

2. Legal Production Risk 

Was the commodity produced in compliance with local laws? 

3. Country Risk Benchmarking 

Is the producing country classified as low, standard, or high risk? 

4. Supply Chain Traceability Risk 

Is traceability sufficient to link the commodity to production plots? 

Each area influences the final negligible risk conclusion. 

Factors That Influence Risk Determination 

Regulators expect operators to consider: 

• Accuracy of geolocation data 

• Satellite verification evidence 

• Proximity to protected forests 

• Known deforestation hotspots 

• Governance indicators 

• Corruption indices 

• Supplier reliability 

• Documentation completeness 

Risk must be assessed case-by-case. 

Deforestation Risk & Negligibility 

To establish a negligible deforestation risk, operators must: 

• Obtain farm-level polygon geolocation 

• Overlay polygons with forest cover baselines 

• Verify no deforestation occurred after the cutoff date 

• Document satellite evidence 

Missing or inaccurate geolocation invalidates negligible risk conclusions. 

Legal Production & Negligibility 

Operators must confirm compliance with: 

• Land-use rights 

• Environmental regulations 

• Labor laws 

• Tax compliance 

Weak documentation or unverifiable permits elevate risk beyond negligible. 

Country Benchmarking Impact 

Country classification affects scrutiny level: 

• Low-risk countries: simplified checks 

• Standard-risk countries: full risk assessment 

• High-risk countries: enhanced scrutiny 

However, even low-risk sourcing requires documentation and assessment. 

Country classification alone does not guarantee negligible risk. 

Documentation Requirements for Negligible Risk 

To justify negligible risk, operators must retain: 

• Supplier information 

• Commodity details 

• Polygon geolocation files 

• Satellite verification records 

• Risk scoring documentation 

• Mitigation records (if applicable) 

• Final risk conclusion rationale 

Documentation must be retained for at least five years. 

Misconceptions About Negligible Risk 

Myth 1: Certification guarantees negligible risk 

Reality: Certification supports evaluation but does not replace risk assessment. 

Myth 2: Low-risk country means automatic compliance 

Reality: Documentation and assessment are still required. 

Myth 3: One-time assessment is sufficient 

Reality: Risk must be reviewed regularly and when new information emerges. 

Role of the EU Deforestation Observatory (EUDO) 

The EU Deforestation Observatory provides: 

• Country benchmarking data 

• Forest monitoring information 

• Deforestation trend analysis 

Operators may reference this data during risk assessment but remain responsible for independent evaluation. 

Practical Example 

Scenario: 

An operator sourcing cocoa obtains: 

• Verified polygon boundaries 

• Satellite confirmation of no post-2020 deforestation 

• Valid land tenure documentation 

• Clear batch traceability 

Risk assessment concludes negligible risk. 

Due Diligence Statement is submitted. 

If later satellite data reveals land-use change, risk must be reassessed.

Frequently Asked Questions (FAQ’s)