The EU’s sustainability laws, such as the CSRD, CSDDD, and European Union Deforestation Regulation (EUDR) all impose obligations on non-EU companies. Those obligations arise through parent company reporting, supply chain due diligence, and other means. The prospect of US companies owing obligations to the EU has angered the current administration, which is pressuring the EU to drop these “extraterritorial” provisions. However, the other side of the aisle recently spoke out as 32 House Democrats recently issued a letter to the European Commission President urging the EU to stay the course on the EUDR. A recent Ropes & Gray memo summarizes the letter:
“In addition to encouraging the European Commission to maintain the current text and implementation timeline of the EUDR, the letter encourages the rejection of a “no risk” country designation. The letter asserts the EUDR needs to move forward “as is” to, among other reasons, (1) discourage forest loss and degradation, (2) not disadvantage those US and other companies that have prepared for compliance and (3) avoid uncertainty, inefficiencies and inconsistencies across covered industries.”
So far, the administration’s pressures haven’t resulted in concrete relief from the EU. The EU is currently weighing whether to adopt a “no risk” designation for certain countries, which would exempt them from compliance. If a “no risk” designation is adopted, the administration is expecting the U.S. to fall within that exception. It’s unclear what impact a letter from a handful of lawmakers from the out-of-power party might have on the EU. Although it does signal to sustainability proponents that they do have some allies within the U.S. Congress.
Our members can learn more about the EUDR here.
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