Search for "EUDR penalties" and you'll probably find the same figure repeated everywhere: a 4% fine.

The problem is that this number, on its own, doesn't tell the whole story.

The EUDR sets out a sequence of measures that can take place both before and after a financial penalty is imposed. It starts with an opportunity to correct the issue and, if the non-compliance persists, can ultimately lead to your goods being stopped from entering or leaving the EU market.

Understanding that entire process is what helps you avoid penalties—not simply knowing how high the fine could be.

In our previous article, we explained how to determine whether your product falls within the scope of the EUDR. This time, we'll look at what happens if your product is covered but your business isn't ready in time.

Before Any Penalty: The Regulation Gives You the Chance to Correct the Issue

This is one of the most important aspects of the EUDR, and it's often overlooked.

The regulation is not designed to punish businesses at the first sign of non-compliance.

Under Article 24, if a competent authority identifies a breach of the regulation, it must first require the company to take corrective measures within a specified timeframe.

Only if those corrective measures are not implemented—or if the non-compliance continues after the deadline—can the authority proceed with enforcement actions and apply the penalties available under the national legislation of the relevant Member State.

That doesn't mean businesses can afford to leave compliance until the last minute.

It means the system is designed to encourage businesses to correct problems before they become sanctions.

The penalties come when companies have been given the opportunity to comply—and fail to do so.

Financial Penalties: What the Regulation Actually Says

This is where many articles get the details wrong.

Article 25 does not state that every company will receive a 4% fine.

Instead, it requires Member States to ensure that the maximum financial penalty is at least 4% of the company's annual turnover within the European Union during the previous financial year.

In other words, 4% is the minimum ceiling that national legislation must provide—not the automatic penalty every business will receive.

The actual fine depends on several factors, including:

• The environmental damage caused.
• The value of the products concerned.
• The economic benefit obtained through the infringement.

The regulation is explicit about its objective: penalties must remove any economic advantage gained from non-compliance, and they should become more severe in cases of repeated infringements.

In practical terms, the larger the business and the more serious or repeated the breach, the greater the financial risk.

The goal isn't simply to issue fines—it's to ensure that non-compliance never becomes the cheaper option.

Beyond the Fine: Confiscation, Market Restrictions and Public Funding

Financial penalties are only part of the picture.

Under Article 25, competent authorities may also impose additional measures, including:

• Confiscation of the products concerned and any revenue generated from their sale.
• Temporary exclusion from public procurement procedures.
• Temporary exclusion from access to public funding, including grants and financial support schemes.
• Prohibition on placing non-compliant products on the EU market, or exporting them from the EU.

For SMEs that work with public authorities—or rely on public funding to support growth—these consequences can be just as significant as the financial penalty itself.

The Operational Risk Few Businesses Talk About: Customs Delays

This is probably the least discussed consequence of the EUDR—and often the first one businesses experience.

Without the reference number of a valid Due Diligence Statement (DDS), your products may not clear customs.

You don't have to wait for a formal penalty to feel the impact of non-compliance.

An incomplete or missing due diligence file can delay imports or exports immediately, leaving goods stuck at the border and generating additional storage, logistics and operational costs.

In practice, this is often the first real consequence of failing to comply with the EUDR—long before any formal enforcement procedure begins.

Who Enforces the EUDR?

Each EU Member State is responsible for appointing one or more competent authorities to monitor and enforce compliance with the regulation.

In Spain, this responsibility lies with the Ministry for the Ecological Transition and the Demographic Challenge (MITECO), through its Directorate-General for Biodiversity, Forests and Desertification.

As we explained in the previous article, the EUDR requires every Member State to carry out a minimum number of compliance checks each year.

The number of inspections depends largely on the risk classification of the country of origin of the relevant commodity. Products sourced from higher-risk countries are subject to a greater level of scrutiny.

For businesses, this means that compliance isn't just a legal requirement—it's something that authorities are expected to verify through regular inspections.

The Risk the Regulation Doesn't Mention: Your Business Relationships

Not every consequence of EUDR non-compliance appears in the legal text.

One of the biggest risks is your relationship with customers and suppliers.

Across the EU, more and more companies are requiring their suppliers to demonstrate EUDR compliance before they are willing to do business with them.

Even if your company never receives a formal penalty, failing to provide the required documentation when requested may be enough to lose a customer—or prevent you from winning a new one.

In many industries, EUDR compliance is quickly becoming more than a legal obligation. It's becoming a commercial requirement.

How to Avoid Getting to This Point

Every consequence we've covered—corrective measures, financial penalties, confiscation, customs delays and restrictions on selling products—has the same root cause:

Not having your due diligence system ready when it's needed.

The good news is that you don't need a perfect system from day one.

What you do need is a practical, reliable process that's in place before an inspection takes place or a customer asks you to demonstrate compliance.

At Deslioo, we help SMEs build that process from the ground up—without turning compliance into a complex, year-long project.

In Summary: You Still Have Time, But You Don't Have an Excuse

The EUDR is designed to help businesses comply—not to catch them out.

That's why the regulation provides an opportunity to correct issues before penalties are imposed.

The smartest approach is to use that time now.

Preparing your due diligence system well in advance means reaching the compliance deadline with confidence—avoiding last-minute paperwork, difficult conversations with customers, unnecessary delays and the risk of discovering too late that something important is missing.