In short: under Regulation (EU) 2023/1115 on deforestation-free products (EUDR), the legal duty — filing a due diligence statement with geolocation data on the EU Information System — sits with the EU importer (the operator), not directly with the Vietnamese supplier. In practice, however, importers push this duty down the supply chain through contract terms: they will require Vietnamese suppliers to warrant deforestation-free sourcing, provide plot coordinates, accept audit rights, indemnify breaches and accept termination rights. Suppliers who read these clauses carefully at negotiation stage avoid contractual penalties later.
Why Vietnamese suppliers are caught by EUDR even though the duty sits in the EU
EUDR covers 7 commodity groups (cattle, cocoa, coffee, oil palm, rubber, soya, wood) with three conditions: deforestation-free (cut-off 31 December 2020), produced legally under the country of production’s laws, and a due diligence statement. Application dates: 30 December 2025 for medium and large companies, 30 June 2026 for micro and small enterprises. Vietnam is classified low-risk under Regulation (EU) 2025/1093 — meaning the importer’s due diligence is simplified, but NOT waived. To complete the statement, the importer must have supply-chain data — and the contract is the legal tool for obtaining it.
A checklist of the six clause groups suppliers will see
First, representations and warranties: the goods do not originate from land deforested after 31 December 2020 and were produced legally under Vietnamese law. Second, information duties: geolocation coordinates of production plots (polygons for plots over 4 ha), declaration reference numbers, legality documents (land-use certificates, harvesting permits). Third, audit rights: the importer or a third party may review records and even inspect on site — negotiate frequency, who bears the cost and notice periods. Fourth, indemnity: the supplier compensates losses when a breach causes the importer to be fined — the riskiest clause, needing a liability cap. Fifth, termination rights upon unremedied EUDR breach. Sixth, a duty to notify supply-chain changes (sourcing region or sub-supplier changes).
Negotiating points Vietnamese suppliers should hold
Do not sign the importer’s draft verbatim. Four points to negotiate: (1) cap indemnity as a proportion of contract value instead of unlimited liability; (2) a reasonable cure period (e.g. 30–60 days) before the buyer may terminate; (3) audit costs: the requesting party pays, unless a breach is found; (4) “breach” must be tied to a competent authority’s finding or independent verification, not the buyer’s unilateral assessment. With Vietnam’s low-risk status, suppliers have leverage to negotiate lighter terms than suppliers from high-risk countries.
Build the data infrastructure now
Contract clauses are only workable with real data behind them. Businesses should build now: a map of sourcing plots with coordinates; land and harvesting legal files; and lot-level traceability from plot to export container. Building this system once costs far less than losing contracts or paying breach penalties later.
Frequently Asked Questions
- Must Vietnamese suppliers file the EUDR declaration?
- Not directly. Filing the due diligence statement on the EU Information System is the EU importer’s (operator’s) duty. But the importer will require your data (coordinates, legality documents) through contract clauses to fulfil it.
- Vietnam is low-risk — is it exempt from EUDR?
- No. Low-risk classification (under Regulation (EU) 2025/1093) only lets the importer use simplified due diligence; goods must still meet the three conditions: deforestation-free, legal, declared.
- Can EUDR indemnity clauses in contracts be limited?
- Yes, and they should be negotiated. Propose a cap as a proportion of contract value, tie “breach” to a competent authority finding or independent verification, and secure a cure period before termination.
- What about smallholder plots without polygon coordinates?
- EUDR requires coordinates; plots over 4 ha need surrounding polygons. Businesses should help supply-chain smallholders measure and collect coordinates — exactly what the importer will check through audit rights.
This article has been quality-reviewed by the FLAW AI Legal Council
