The EU Deforestation Regulation (EUDR) is a new law aimed at fighting deforestation by ensuring that certain commodities and products are deforestation-free and legally produced. 

For traders, businesses that buy and resell products within the EU without any transformation, EUDR compliance becomes mandatory in 2025, with large and medium companies needing to comply by December 30, 2025 and small and micro enterprises by June 30, 2026. This means that any operator or trader placing regulated products on the EU market or exporting from it must be able to prove the products are not linked to recent deforestation.

Traders play a crucial role in this system, bearing the responsibility to maintain and pass on traceability information across the supply chain. Their role is even more critical given how fragmented commodity markets are, often involving multiple layers of intermediaries before products reach the end market. In this guide, we break down what EUDR means for traders and outline practical steps from identifying your role to preparing for audits to help you meet the new requirements.

Who is considered a trader under EUDR?

Definition of traders according to EUDR

Under EUDR, traders are defined as companies making available in-scope products in the EU market after they have already been placed on the market by someone else. In simple terms, if you buy and sell regulated commodities within the EU (without being the first importer, producer, exporter or manufacturer), you are a trader. The difference lies in your role in the supply chain. Operators handle the initial entry of goods (as defined in HS codes), whereas traders handle goods after that initial entry (typically as distributors, wholesalers, or retailers sourcing from EU-based suppliers). 

Examples of traders

To illustrate, here are two real-world examples of traders:

• A small German wholesaler purchases unroasted coffee beans from a Dutch importer (who has already fulfilled their EUDR obligations as an operator) and resells them to local coffee roasters. Because the product was already placed on the market by the importer, the wholesaler is acting as a trader.
• A major EU supermarket chain buys chocolate bars from a domestic manufacturer and sells them in its stores. The manufacturer placed the product on the market first, so the supermarket is a trader in this transaction even though it is the one offering the product to the final consumer.

Here is a practical checklist to check if you are considered a trader or operator under the EUDR.

What are the reporting obligations for traders under EUDR?

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Even though traders don’t carry the full due diligence process that operators do, EUDR still places important reporting and traceability obligations on them. The exact responsibilities vary depending on your company’s size.

Non-SME traders

If you’re not a SME, EUDR effectively treats you similar to a downstream operator. In fact, non-SME traders have the same core obligations as large operators. 

Your responsibilities in a nutshell:

• You must establish and maintain a due diligence system
• You must submit a due diligence statement for all the products you sell
• You must retain all compliance documentation for at least five years

​​However, non-SME traders may benefit from a simplified form of due diligence. If you can ascertain that your upstream supplier has conducted proper due diligence, you can reuse and reference their DDS in your own submission. Even when referencing an upstream DDS, you

remain legally liable if the due diligence was incomplete or incorrect, so it’s in your interest to assess suppliers carefully and document why you trusted their DDS.

SME traders

EUDR offers small traders a lighter load. SME traders are not required to conduct due diligence or submit their own DDS as long as the product was already covered by a DDS. However, they have critical traceability responsibilities. 

In a nutshell as an SME trader you must:

• Collect and keep information about your suppliers, buyers and products, including the name/address of the supplier and buyer, and the reference number of the supplier’s DDS
• Pass this information to customers or authorities on request
• Keep transaction records for at least 5 years

In essence, the law expects small traders to preserve the chain-of-custody information. If an SME trader suspects that a product might not be compliant (for example, if proper documentation is missing or there are red flags), they are obligated to notify authorities immediately. 

No trader, regardless of size, is allowed to knowingly deal in non-compliant goods. Selling a product you know (or should know) is linked to illegal deforestation would violate EUDR. 

Traders essentially serve as the compliance bridge in the supply chain: by the time a product reaches an end user, there should be a clear digital trail back to a compliant source. This means robust record-keeping and the ability to produce documentation upon request.

Step-by-step reporting process for traders

Complying with the EUDR as a trader involves a mix of verification, documentation, and internal coordination. Below is a step-by-step guide tailored for both SME and non-SME traders, with notes on what can be skipped by SMEs.

Step 1: Identify your role and obligations

Start by verifying that you’re acting as a trader. Then confirm whether you qualify as an SME under the EUDR definition. This distinction is critical: SMEs have limited obligations, while non-SME traders must follow due diligence steps similar to operators. This determines which of the next steps apply to you.

Step 2: Understand your suppliers and EUDR products

List all products and commodities you trade and check which ones fall under the EUDR scope. Then, map your supply chain for those products. Understand who your suppliers are, where the products come from, and what your upstream supply chain looks like. This foundation is key to traceability, managing risks of non compliance and audit readiness.

Step 3: Set up your internal due diligence or traceability system

Your internal systems should match your size and obligations.

Non-SME traders need to establish a documented due diligence system, including:

• A process for verifying the suppliers
• A process for collecting and verifying supplier DDS
• Recordkeeping for at least five years
• Defined responsibilities and escalation paths
• Risk-monitoring mechanisms in cases where it is not safe to trust the suppliers

SME traders don’t need a formal system but must have a clear, accessible way to:

• Access and store DDS reference numbers and supplier/buyer details
• Pass along that data when asked

Step 4: (skip if SME) Conduct a supplier maturity assessment 

Non-SME traders must “ascertain” that due diligence was properly conducted by their supplier but the law doesn’t define exactly how to do this. We recommend conducting a supplier maturity assessment to evaluate their EUDR readiness. 

Key non exhaustive criteria include:

• History of non-compliance or violations
• Availability of a valid DDS
• Results of an EUDR readiness checklist
• Validity of the data included in the DDS

This assessment helps you decide whether to trust and reuse the supplier’s DDS or dig deeper. If the maturity assessment cannot provide sufficient confidence that the supplier’s due diligence was properly conducted then we recommend continuing with the full process and carry out a proper due diligence yourself. 

Step 5: Collect the required dataAll traders need to collect data, but the scope depends on your size. Regardless of your company’s size you must collect data on:

• Name and address of your supplier
• Reference number and verification number of the supplier’s DDS
• Name and address of your customer

If you are a non-SME trader reusing an upstream DDS, in addition to the above,you need to collect:

• Information confirming you can trust your supplier’s due diligence process
• Periodic validations of the DDS provided by your suppliers

Step 6: Submit your due diligence statement (skip if SME)

Before you sell a product, you must submit a DDS via the EU’s Information System. If you’re reusing a supplier’s DDS, you will reference it in your own DDS, vouching for its credibility.

Step 7: Maintain traceability across your supply chainTraceability is at the heart of EUDR. Whether you're an SME or not, you must be able to track every product you trade back to its origin and prove it.

Here’s what that looks like in practice:

• Record every transaction: Know where the product came from, who supplied it, and what DDS covers it.
• Link each product batch to its DDS: Make sure every shipment or stock unit is traceable to a compliant source.
• Avoid mixing: You cannot mix products that are EUDR-compliant with those that aren’t or with products that don’t have a clear origin or DDS. If you store or repack goods, track them carefully to avoid contamination.

Tip: Build your system around “trace-back” logic. Ask yourself: if someone picked this product off a shelf, could you trace it all the way back to the farm or forest where it was grown or harvested?

For SME traders, setting up a traceability system can be relatively straightforward. A well-organized database is often enough as long as it clearly links supplier names, DDS references, and product batches. 

However, for non-SME traders, the scale and complexity of operations typically require a more structured approach. Larger businesses may need to adopt dedicated supply chain or compliance software that connects products with their corresponding DDS and if needed geolocation data, and supporting documentation in one centralized system. 

Important: Remember that you must store all traceability records for at least five years, and be ready to share them if requested during an audit.

Step 8. Prepare for audits and adapt your processes

EUDR audits aren’t hypothetical, they’re part of the enforcement plan. As a trader, being prepared means knowing where your documents are, how to access them quickly, and showing that your systems work in practice.

Here’s what authorities will typically check:

• Can you trace a product back to its source using a valid DDS?
• Are your supplier details and documentation stored properly?
• If you're a non-SME, have you submitted your DDS for all shipments?

For non-SME traders, audits will also look at your due diligence system so keep it documented and updated. For SMEs, the focus is on traceability: as long as you can provide the right supplier and DDS information, you’re on solid ground.

Tip: Use audit preparation as an opportunity to improve your internal processes. The better your documentation flows today, the easier compliance will be tomorrow.

Common mistakes traders can make and how to avoid them

Even well-intentioned traders can stumble when it comes to EUDR compliance. Below are some of the most frequent misconceptions we’ve observed along with practical ways to avoid them.

Mistake 1: Trusting suppliers blindly

Assuming that suppliers are fully compliant without conducting your own checks can be detrimental. EUDR places the responsibility on each company to ensure that the products they trade are deforestation-free and legally sourced.

How to avoid it: Implement a supplier maturity assessment to evaluate the reliability of your suppliers' due diligence processes. This includes checking for past compliance violations and ensuring that documentation is available, complete and credible.

Mistake 2: Failing to verify supplier data

Even after you have assessed your supplier’s reliability, relying solely on the data they provide without independent verification can still be risky. Blind trust isn't enough; traders must actively confirm the accuracy and completeness of the data received.

How to avoid it: When reusing a due diligence statement, perform spot checks on the data it contains. This may include verifying coordinates, checking document consistency, or requesting clarifications from the supplier where needed.

Mistake 3: Misunderstanding SME obligations

Some traders mistakenly believe that being classified as an SME exempts them from all EUDR requirements. While SMEs have reduced obligations, they are still required to maintain traceability and provide information upon request.

How to avoid it: Regularly assess your company’s capacity to collect and share EUDR-related information. Even as an SME, you must retain key records and be ready to prove traceability at any time.

Mistake 4: Incomplete record-keeping

Disorganized or missing records can lead to compliance failures. EUDR mandates that traders maintain detailed records of their supply chains, including supplier identities, due diligence statements and transactions history for at least five years.

How to avoid it: Utilize digital tools to automate data collection and storage. Make sure each product is clearly linked to its DDS and supplier. Keep files easily retrievable for audits

Mistake 5: Underestimating regulatory scrutiny for non-SME traders

Non-SME traders sometimes assume they will face lighter oversight than operators. On the contrary, EUDR explicitly treats non-SME traders as equivalent to operators because of their significant influence in the market

How to avoid it: If  you're a non-SME, treat EUDR compliance with the same level of depth as a downstream operator would. This includes maintaining up-to-date records and ensuring all compliance measures are thoroughly followed and documented.

How to prepare for EUDR audits as a trader

EUDR compliance doesn’t end when you’ve collected documents or filed a DDS. Audits are a key part of enforcement and being prepared means building internal processes that reflect your responsibilities and can stand up to scrutiny.

Here are the key actions traders should take when preparing for an EUDR audit:

1. Assign clear responsibilities

Start by making EUDR compliance someone’s job or several people’s. Appoint an overall EUDR lead or compliance officer but also make sure to involve key teams where relevant. For example the following teams are usually playing a crucial role in implementing EUDR:

• Procurement: Makes decisions on which suppliers to use
• Operations: Collects and verifies the data, manages traceability and storage processes.
• Admin or finance: Can support with documentation and archiving.

Shared responsibility keeps compliance embedded across your business not siloed in one team.

2. Set up a due diligence or traceability system

Do not assume compliance will happen without any changes. Set up an internal due diligence system that reflects your obligations based on the steps above. Non-SME traders must have a documented due diligence system, including data collection, supplier assessment, recordkeeping, and DDS submissions. SME traders need a clear traceability process even without submitting DDS, you must store supplier info and DDS references and be able to retrieve them on request.

3. Understand what auditors will look for

Auditors will typically focus on five key areas. First, they’ll check your recordkeeping. Are your documents complete and accessible? Second, if you’re a non-SME, they’ll assess how you “ascertained” that your upstream supplier’s DDS was credible. Third, they’ll look at whether your due diligence system (or traceability system, for SMEs) is actually in place and functioning. Auditors may also review a few sample orders, asking you to walk through the compliance journey of a product from end sale back to origin. 

4. Organize and safeguard your documentation.

Create a central repository whether it’s a compliance platform, an ERP function, or a structured folder system where each document is clearly labeled and linked to the relevant product and supplier. Backup everything and ensure all records are retained for at least five years. If someone leaves your team, your audit trail should still be intact.

5. Run mock audits and regular checks

Simulate audit scenarios quarterly or bi-annually where you:

• Pick a product and trace it from shelf to source.
• Have your team retrieve all linked documents, including DDS and supplier info.
• Identify any slowdowns, missing records, or unclear responsibilities.

These dry runs can build confidence and surface weaknesses before an actual inspection.

6. Fix what’s missing and keep improving

Audit preparation isn’t a one-time effort. If you identify weak points during internal reviews, like inconsistent supplier data or gaps in file storage, and fix them right away. If your company is growing and approaching the SME threshold, start planning to implement a full due diligence system. The best time to strengthen your process is before an audit notice arrives.

Use this short checklist to review your EUDR audit readiness  and ensure nothing slips through the cracks.

Traceability starts and stays with traders

Traders are more than just intermediaries in the supply chain, they’re essential links in ensuring that EUDR compliance holds from origin to end market. In many cases, products pass through multiple traders before reaching their final destination. That means the responsibility to maintain and pass on traceability often rests with you.

The regulation makes it clear: every actor must play their part to keep deforestation-linked commodities out of the EU market. For traders, this means storing and sharing the right data and, for non-SMEs, ensuring due diligence is done properly.

This is where digital tools can make all the difference. A well-designed system can connect your shipment data with product details, supplier and buyer information, and due diligence records all in one place. It simplifies how you track, store, and retrieve compliance documents. It also ensures you can send the right information downstream or present it during audits without delay or confusion.

Explore Coolset's reporting software solutions and see how we can help you with EUDR reporting.