The European Union Deforestation Regulation (EUDR) is an initiative aimed at combating deforestation and forest degradation. The regulation introduces supply chain due diligence requirements for certain commodities, including coffee, cocoa, and their related products, whether they are imported into, supplied within, or exported from the EU. The aim of the legislation is to ensure that these products are both 'deforestation-free' and 'produced in accordance with the relevant legislation of the country of production'*.

The EUDR places specific obligations upon “operators” who import or process materials into covered products within the EU or export them as well as “traders” supplying covered products within the EU. These requirements are designed to demonstrate covered products entering, circulating within, or leaving the EU market are:

• Originated from land that has not been deforested after December 31, 2020.
• Produced in accordance with the relevant legislation of the country of production.
• Accompanied by a due diligence statement.

The due diligence process involves collecting specific prescribed information, including the precise geolocation of the plots of land where the relevant commodities were produced. For commodities originating from countries or regions not classified as low risk by the European Commission (EC), operators are required to perform additional risk assessments. If necessary, they must also undertake risk mitigation activities to ensure there is no or only a negligible risk of non-compliance with the EUDR.

In addition to these core requirements, the EUDR also mandates specific protocols related to due diligence processes and systems, record keeping, and data transparency. To enforce these regulations, National Competent Authorities (NCAs) of EU Member States are tasked with conducting checks within their territories to verify compliance among operators and traders.

The consequences of non-compliance with the EUDR are severe. Penalties can include fines of up to 4% of a company's total turnover within the EU, confiscation of relevant products, and temporary prohibitions on importing, supplying, or exporting relevant products to, within, or from the EU.

ICE CoT has been designed to help traders and operators comply with the EUDR while supporting continued trade-ability of cocoa and coffee.

*The terms ‘deforestation-free’ and ‘relevant legislation of the country of production’ are defined in the EUDR. Deforestation-free refers to land not subject to deforestation (conversion of forest to agricultural use) after 31 December 2020. Relevant legislation refers to laws applicable in the country of production concerning the legal status of the area of production in terms of: (a) land use rights; (b) environmental protection; (c) forest-related rules, including forest management and bio-diversity conservation, where directly related to wood harvesting; (d) third parties’ rights; (e) labour rights; (f) human rights protected under international law; (g) the principle of free, prior and informed consent (FPIC), including as set out in the UN Declaration on the Rights of Indigenous Peoples; (h) tax, anti-corruption, trade and customs regulations.

ICE Benchmark Administration (IBA) has implemented an ICE CoT Membership process towards ensuring that users of ICE CoT are of good standing

To become a Member of ICE CoT an applicant must:

1. Complete an ICE CoT application form and associated documentation;
2. Undergo due diligence and a review by the ICE CoT Membership Committee; and
3. Execute a User Agreement

If you are interested in becoming a member of ICE CoT please click here.

IBA is responsible for ensuring that there is appropriate governance over ICE CoT and has established the ICE CoT Advisory and Oversight Committee to provide ongoing direction and oversight of the service.

The Committee is comprised of an independent Chairperson and a broad range of experts and representatives from across the cocoa and coffee industries.

The Committee’s terms of reference include:

1. Providing guidance on the design principles and implementation of ICE CoT in the context of the needs of market participants for compliance with the EUDR, including due diligence, data collection and verification, risk assessment and mitigation, and in supporting the transfer of products along the supply-chain;
2. Overseeing, reviewing and commenting on the design and implementation of ICE CoT, and in particular the methodologies for the validation checks for farm-origin data and for physical-flow traceability data in respect of cocoa and coffee and processed cocoa and coffee products;
3. Providing an important and authoritative voice in respect of ICE CoT, to include assisting IBA in the formulation of feedback to regulatory and governmental organisations in the EU and globally regarding deforestation legislation, and to support ICE CoT in any discussions with industry associations and NGOs; and
4. Overseeing the work of the ICE CoT Technical Working Group and any other working group or sub-committee appointed by the Committee.

ICE CoT Advisory and Oversight Committee Composition and Disclosures of Conflicts of Interest

ICE CoT Advisory and Oversight Committee Terms of Reference

Oversight Committee Meeting Minutes

Further details on IBA’s general governance structure, including IBA’s independent Board of Directors, whistleblowing policy and other policies are available on IBA’s Governance page.

IBA has received from EY and published an independent assurance report in relation to the description and design effectiveness of IBA's control procedures that relate to the ICE CoT platform in supporting its users with their due diligence and other obligations under EUDR as at a point in time.