How the EUDR defines SMEs
The EUDR uses the EU definition of small and medium-sized enterprises from Commission Recommendation 2003/361/EC. An SME is an enterprise with fewer than 250 employees and either annual turnover not exceeding EUR 50 million or a balance sheet total not exceeding EUR 43 million. This definition applies to the legal entity as a whole, including linked enterprises and partner enterprises where applicable. A subsidiary of a large group is not an SME even if the subsidiary itself employs fewer than 250 people.
Micro-enterprises (fewer than 10 employees and turnover or balance sheet total not exceeding EUR 2 million) are a subset of SMEs and receive the same treatment under the EUDR. The regulation does not create an additional tier for micro-enterprises beyond the SME category.
The SME trader obligation: what it actually requires
Article 5 of Regulation (EU) 2023/1115 sets out the obligation for SME traders. An SME trader that makes relevant products available on the EU market must: keep records of the DDS reference numbers for all products it makes available, ensure that it can provide those reference numbers to the downstream parties to whom it supplies, and provide the reference numbers to authorities on request.
This is a significantly lighter obligation than full due diligence. The SME trader does not collect geolocation data, does not conduct a risk assessment, and does not submit a DDS. The DDS was submitted by the operator upstream. The SME trader's role is to be the link that passes the reference number down the supply chain and maintains the record that authorities can audit.
The practical implication is that an SME trader's EUDR compliance is entirely dependent on its upstream operator having correctly completed due diligence and submitted a valid DDS. An SME trader cannot cure a compliance gap in its operator's supply chain. If the upstream DDS is invalid or was never submitted, the SME trader holds a reference number that does not represent compliant goods.
SME operators: no reduction in obligation
The distinction between operator and trader is determined by position in the supply chain, not by company size. An SME that imports EUDR-covered goods from outside the EU and places them on the EU market for the first time is an operator, not a trader. The operator obligation applies in full: information collection including geolocation, risk assessment, risk mitigation where necessary, and DDS submission.
Many SMEs in the food, beverage, and timber sectors import directly and are therefore operators. A small roastery that imports green coffee beans is an operator. A specialty food importer sourcing cocoa directly from an origin country is an operator. These companies cannot claim the SME trader simplification because they are not traders in the EUDR sense.
The question to ask is: am I the first person to place this product on the EU market in its current form? If yes, you are an operator. If someone else already placed it on the EU market and submitted a DDS, and you are redistributing or reselling it downstream, you may be a trader. The DDS reference number existing upstream is the practical indicator of whether operator-level due diligence has already been completed for the goods.
Simplified due diligence for low-risk sourcing
Article 13 provides for simplified due diligence that is available to all operators, including both large companies and SMEs, when sourcing from countries classified as low risk by the Commission's benchmarking system. Under simplified due diligence, the operator collects the required product information and submits a DDS, but is not required to carry out the risk assessment that would otherwise sit between information collection and DDS submission.
For an SME operator sourcing all or most of its commodities from low-risk countries, this simplification materially reduces the compliance workload. The information collection step (including geolocation) still applies. The DDS must still be submitted. The five-year record-keeping obligation still applies. What is removed is the structured analysis of deforestation risk that would otherwise be required.
The combination of simplified due diligence (available for low-risk sourcing) and the SME trader simplification (available for downstream distributors) means that the EUDR compliance burden is most concentrated on operators with non-low-risk supply chains. For a discussion of how country risk classifications work, see our article on EUDR country risk classifications. For the full compliance framework, see our guide on EUDR compliance for EU importers.
Commission support for SME operators
Article 15 of the regulation provides that member states may offer technical assistance and guidance to operators, and the Commission may provide guidance in collaboration with member states. In practice this has produced guidance documents, technical support for using the EUDR Information System, and explanatory materials on geolocation data requirements. The Commission's EUDR guidance portal provides templates and explanatory materials specifically addressed at operators with limited compliance infrastructure. Dutch Customs and the Netherlands Enterprise Agency (RVO) provide national-level guidance and support for Dutch operators navigating EUDR compliance.