EUDR prison penalties: overview
- Intentional EUDR breaches can trigger prison sentences across most Member States
- Environmental Crime Directive classifies serious EUDR violations as criminal offences
- Germany proposes five-year sentences, rising for severe damage
- Ireland’s draft rules include prison terms for key offences
- Enforcement may vary despite strict penalties available under law
Penalties for breaching the the European Union Deforestation Regulation (EUDR) may go beyond the financial. In fact, such breaches may carry prison sentences for individuals deemed responsible.
The regulation requires any product containing the commodities it covers, including cocoa, coffee, palm oil, soy, rubber, wood and cattle, to be traceable to its source. The deadline for compliance with these strictures is currently 30 December this year.
Those that intentionally breach this legislation will face prison sentences of up to five years in the majority of EU Member States.
Where will penalties apply?
For most Member States, the most serious breaches of the EUDR will carry prison sentences. This is due mainly to the EU’s legislation on environmental crimes.
The Environmental Crime Directive stipulates that placing EUDR-relevant commodities on the market or exporting them in breach of the regulation constitutes a criminal offence, explains Katia Merten-Lentz, partner at law firm Food Law Science and Partners. Some Member States, such as Ireland and Denmark, are not bound by this directive.
Such harmonisation of penalties is rather unusual, says Bregt Raus, managing associate at law firm Altius, as these decisions are usually left up to the Member States themselves.
Nevertheless, EU treaties allow it to harmonise criminal law when it “proves essential to the effective implementation of an EU policy”, says Raus. This puts EUDR infringements in the same category as illegal waste shipments or serious industrial pollution, he explains.
What are the penalties?
The Environmental Crime Directive specifies that a maximum prison sentence for putting EUDR-relevant commodities on the EU market in breach of the regulation must be at least five years, explains Thomas Delille, partner at law firm Squire Patton Boggs. This means that while courts can impose shorter sentences, a maximum of at least five years in prison must be written into law.
Several countries have drawn up legislation on penalties.
A draft bill in Germany lays out a maximum prison sentence of five years, or a fine, for intentionally placing non-compliant products on the market or exporting them. The bill, Merten-Lentz outlines, specifically differentiates between administrative failures and criminal breaches.
Furthermore, gross negligence could carry up to three years in prison, while intentional offences causing particularly serious environmental damage could carry a prison sentence of up to ten years.
The individuals who could be liable are directors or managers, depending on their involvement.
Ireland, which is exempt from the Environmental Crime Directive, has nevertheless drafted legislation that includes prison sentences, according to Merten-Lentz.
Trading non-compliant products, obstructing inspectors or failing to carry out due diligence or submit the required declaration could carry up to three years in prison. Other offences, such as failure to keep due diligence statements for five years, carry only a fine.
If these offences are committed by a ‘body corporate’, explains Nayelly Landeros Rivera, associate at Squire Patton Boggs, a director, manager, secretary or other officer could be personally criminally liable where the offence was committed with their consent, connivance or approval, or was down to their wilful neglect. Equivalent liability could apply to members who manage company affairs.
Ireland has not yet enacted this legislation, she points out. Therefore, these penalties may change.
Will they actually be enforced?
One caveat to the above is whether they will actually be enforced. Current trends suggest that prison sentences will not be handed out, says Marie Escorneboueu, associate in environmental and chemicals law at Squire Patton Boggs.
“If some Member States usually foresee imprisonment as a potential sanction for a breach of an EU Regulation, the extent to which such sanction is effectively enforced highly depends on national courts’ practices. There is currently no particular trend from EU national courts to sanction regulatory breaches of EU regulations such as the EUDR with imprisonments.”
Nevertheless, she suggests, the Environmental Crime Directive may lead to stricter enforcement of EUDR breaches.
In short, intentional breaches of the EUDR can carry serious penalties for those involved. Breaches could not only affect a company’s bottom line, but remove the freedom of the individuals deemed responsible.
