Opinion of the Advocate General — ECLI:EU:C:2025:372
Date: 2025-05-22
Language of the case: Hungarian
Procedure: Reference for a preliminary ruling
Origin: Hungary

Translation C-117/24 – 1 
Case C-117/24 
Request for a preliminary ruling 
Date lodged: 
14 February 2024 
Referring court: 
Fővárosi Törvényszék (Hungary) 
Date of the decision to refer: 
1 February 2024 
Applicant: 
JYSK Kereskedelmi Kft. 
Defendant: 
Nemzeti Élelmiszerlánc-biztonsági Hivatal 
  
…  
Applicant: JYSK Kereskedelmi Kft. (… Ecser, Hungary …) 
…  
Defendant: Nemzeti Élelmiszerlánc-biztonsági Hivatal (National 
Food Chain Safety Office) (… Budapest …) 
…  
Subject matter of the 
dispute: 
Administrative proceedings concerning a decision … 
imposing a fine in respect of forest protection 
DECISION 
The Fővárosi Törvényszék (Budapest High Court, Hungary) hereby refers a 
question to the Court of Justice of the European Union for a preliminary ruling on 
the interpretation of Article 4(2) and (3) of Regulation (EU) No 995/2010 of the 
European Parliament and of the Council. 
EN 
REQUEST FOR A PRELIMINARY RULING OF 1. 2. 2024 – CASE C-117/24 
 
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The Budapest High Court refers the following question to the Court of Justice of 
the European Union for a preliminary ruling: 
Should Article 4(2) and (3) of Regulation (EU) No 995/2010, read in 
conjunction with Article 6(1) of that regulation, be interpreted as meaning 
that it is consistent with those provisions for the operator to have access to 
the elements, referred to in Article 6(1) of the regulation, of the due diligence 
system maintained and evaluated by its parent undertaking or used by its 
parent undertaking and established by a monitoring organisation within the 
meaning of Article 8 [of that regulation]? 
… [Considerations of national procedural law] 
Basis 
1 The Budapest High Court, as an administrative court hearing a forest protection 
action, asks the Court of Justice of the European Union (‘the Court of Justice’), 
under Article 267 TFEU, to interpret the provisions of EU law required to reach a 
decision in the main proceedings. 
Subject matter of the main proceedings and relevant facts 
2 The applicant is an operator within the meaning of Article 2(c) of Regulation (EU) 
No 995/2010 (‘the regulation’), which is placing timber and timber products on 
the internal market for the first time. The applicant is wholly owned by LLG A/S, 
a company registered in Denmark (‘the parent undertaking’). 
3 In 2023, the defendant, as the competent authority designated to enforce the 
regulation, carried out a check at the applicant’s premises in which, inter alia, it 
examined whether the applicant had a due diligence system within the meaning of 
Articles 4(2) and 6(1) of the regulation (‘due diligence system’). 
4 The due diligence system used by the applicant was found to have been 
established by its parent undertaking and was largely based on risk analyses 
carried out by Preferred by Natúré, a monitoring organisation within the meaning 
of Article 8. During the checking procedure, the applicant was able to extract the 
data stored in the due diligence system relating to each timber product and submit 
them to the defendant, and it is therefore demonstrated that the applicant also has 
access to various elements of that system. With regard to the risk analysis, the 
applicant itself acknowledged that this had been carried out in part by the parent 
undertaking. 
5 As a result of this checking procedure, the defendant issued Decision 
No 6100/2466-24/2023 of 26 May 2023 ordering the applicant to pay, inter alia, a 
fine by way of forest protection for infringement of Articles 4(2) and 6(1) of the 
regulation and to put in place a due diligence system in full. It justified the 
abovementioned obligations by pointing out that, as established on the basis of the 
JYSK 
 
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available evidence, the applicant did not have a due diligence system deployed on 
its own behalf established in relation to the business it undertakes, as required by 
the regulation, and neither did it use a due diligence system established by a 
monitoring organisation within the meaning of Article 8 of the regulation. In the 
defendant’s view, in order to comply with the above provisions of the regulation, 
the due diligence system must be maintained by the applicant, which has the status 
of operator, and not by its parent undertaking. 
Arguments of the parties 
6 In its application, the applicant is seeking the annulment of the abovementioned 
decision. It argues that this due diligence system maintained by its parent 
undertaking can be considered as its own due diligence system and thus fulfils the 
obligation laid down in Article 4(2) and (3) and Article 6(1) of the regulation. 
Specifically, the relevant provisions of the regulation impose on it the obligation 
to use a due diligence system, not the obligation to set up such a system. It asserts 
the fact – which it has substantiated through documentary evidence – that the 
competent German federal authority had checked in 2021, at the registered office 
of the German subsidiary, the legality of the due diligence system established by 
its parent undertaking and deployed in all European subsidiaries and that that 
check, unlike those carried out by the Hungarian authority, had not found any 
infringement and had recognised that the due diligence system in question 
complied with the requirements of Article 4(2) of the regulation. The applicant 
argues that this circumstance also supports the view that, since it is applying the 
due diligence system established by the parent undertaking, the obligation under 
Article 4(2) and (3) and Article 6(1) of the regulation should be regarded as 
having been fulfilled. 
7 The defendant contends that the action should be dismissed. It attaches decisive 
importance to the fact that the applicant carries out activities involving importing 
into the territory of the European Union not only through the parent undertaking 
but also directly, which is why it has the status of an operator under the regulation. 
It does not dispute the fact that the parent undertaking has a due diligence system, 
but, rather, argues that the applicant, in its capacity as operator, cannot be 
exempted from the obligation of maintaining such a system in accordance with 
Article 4(2) and (3) of the regulation. According to the defendant, it is the parent 
undertaking’s business decision how to manage the import of timber and timber 
products, but if it assigns autonomous tasks to its subsidiaries as importers, it 
follows from the relevant provisions of the regulation that, in such a case, those 
subsidiaries must maintain due diligence systems. 
Relevant legal provisions 
8 Article 4(2) and (3) of the Regulation: 
REQUEST FOR A PRELIMINARY RULING OF 1. 2. 2024 – CASE C-117/24 
 
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‘2. Operators shall exercise due diligence when placing timber or timber 
products on the market. To that end, they shall use a framework of procedures and 
measures, hereinafter referred to as a “due diligence system”, as set out in 
Article 6. 
3. Each operator shall maintain and regularly evaluate the due diligence 
system which it uses, except where the operator makes use of a due diligence 
system established by a monitoring organisation referred to in Article 8. Existing 
supervision systems under national legislation and any voluntary chain of custody 
mechanism which fulfil the requirements of this Regulation may be used as a basis 
for the due diligence system.’ 
9 Article 6(1) of the Regulation: 
‘1. The due diligence system referred to in Article 4(2) shall contain the 
following elements: 
(a) measures and procedures providing access to the following information 
concerning the operator’s supply of timber or timber products placed on the 
market: 
– description, including the trade name and type of product as well as 
the common name of tree species and, where applicable, its full 
scientific name, 
– country of harvest, and where applicable: 
i) sub-national region where the timber was harvested, and 
ii) concession of harvest, 
– quantity (expressed in volume, weight or number of units), 
– name and address of the supplier to the operator, 
– name and address of the trader to whom the timber and timber 
products have been supplied, 
– documents or other information indicating compliance of those timber 
and timber products with the applicable legislation; 
(b) risk assessment procedures enabling the operator to analyse and evaluate 
the risk of illegally harvested timber or timber products derived from such 
timber being placed on the market. 
Such procedures shall take into account the information set out in point (a) 
as well as relevant risk assessment criteria, including: 
JYSK 
 
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– assurance of compliance with applicable legislation, which may 
include certification or other third-party-verified schemes which cover 
compliance with applicable legislation, 
– prevalence of illegal harvesting of specific tree species, 
– prevalence of illegal harvesting or practices in the country of harvest 
and/or sub-national region where the timber was harvested, including 
consideration of the prevalence of armed conflict, 
– sanctions imposed by the UN Security Council or the Council of the 
European Union on timber imports or exports, 
– complexity of the supply chain of timber and timber products; 
(c) except where the risk identified in course of the risk assessment procedures 
referred to in point (b) is negligible, risk mitigation procedures which 
consist of a set of measures and procedures that are adequate and 
proportionate to minimise effectively that risk and which may include 
requiring additional information or documents and/or requiring third party 
verification.’ 
Statement of the reasons for the request for a preliminary ruling 
10 In the present dispute, the Budapest High Court is asking whether the applicant’s 
practice with regard to the due diligence system complies with Article 4(2) and (3) 
of the regulation, read in conjunction with Article 6(1) of that regulation, and thus 
whether the applicant should be regarded as complying with the obligations laid 
down in those provisions of the regulation when it applies a due diligence system 
maintained by its parent undertaking. 
11 The Budapest High Court has not found any cases in the case-law of the Court of 
Justice in which that Court has interpreted Article 4(2) and (3) of the regulation. It 
therefore considered it necessary to refer the matter to the Court of Justice for a 
preliminary ruling in order to ascertain what specific obligations are imposed on 
operators in relation to the due diligence system. 
12 It is important to note that the applicant is considered to be an operator placing 
timber and timber products on the internal market for the first time, and thus 
carrying out an activity as an independent importer, without any involvement by 
the parent undertaking. According to the regulation, the applicant is therefore 
subject to a number of obligations relating to the due diligence system in respect 
of timber and timber products that it places on the market and that have been 
obtained outside the European Union. 
13 However, the Budapest High Court believes that the scope of these obligations is 
not clear. Article 4(2) of the regulation imposes an obligation on the operator to 
REQUEST FOR A PRELIMINARY RULING OF 1. 2. 2024 – CASE C-117/24 
 
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‘use’ the due diligence system, while Article 4(3) requires the operator to 
‘maintain’ and ‘regularly evaluate’ such a system. 
14 The (non-legally binding) document entitled ‘Commission Notice of 12.2.2016 – 
Guidance document for the EU Timber Regulation’ serves as a reference when 
interpreting the regulation. According to this document, an operator has an 
obligation ‘to gather information about the timber and timber products it is 
handling and about its suppliers in order to carry out a full risk assessment’. 
Furthermore, ‘it is important that an operator that uses its own due diligence 
system evaluates this system at regular intervals to ensure that those responsible 
are following the procedures that apply to them and that the desired outcome is 
being achieved’. However, it is also unclear from the guidance document whether 
[a system] that is not maintained directly by the operator, but rather by its parent 
undertaking, can be considered an operator’s own due diligence system. 
15 According to the Budapest High Court, if the requirement arising for the operator 
from Article 4(2) and (3) of that regulation consists exclusively in the use of a due 
diligence system by means of which data are collected and risks are assessed and 
reduced in relation to timber and timber products placed on the market for the first 
time by that operator in the territory of the European Union, the applicant cannot 
be regarded as not having a due diligence system in accordance with the 
regulation. In such a case, the fine imposed on this ground as forest protection 
would be unlawful and this part of the administrative decision should be set aside. 
Conversely, if it follows from Article 4(2) and (3) of the regulation that the 
applicant is required to have a due diligence system in place on its behalf 
established expressly in relation to the business it carries out, the findings in the 
administrative decision would be in accordance with the law and the action should 
be dismissed on that point. 
16 The applicant’s parent undertaking, which is active in the sale of timber products, 
has subsidiaries throughout Europe that are considered to be operators and that, 
according to the applicant, also use the due diligence system maintained by the 
parent undertaking in the same way as the applicant. In the present dispute, the 
applicant has submitted the results of the check carried out at the German 
subsidiary’s head office by the competent German federal authority, according to 
which – as stated by the applicant – the same due diligence system was found to 
comply with Article 4(2) of the regulation. It is therefore important at European 
level to determine whether, based on the legal interpretation given by the Court of 
Justice, the operation of these subsidiaries complies with the regulation in relation 
to the due diligence system. 
17 For those reasons, the Budapest High Court asks the Court of Justice to interpret 
whether the practice of the applicant operator, whereby it is not the applicant itself 
but rather its parent undertaking that carries out the tasks associated with 
maintenance and evaluation of the due diligence system in such a way as to enable 
the applicant to have access to the elements of that system, is in compliance with 
Article 4(2) and (3) of the regulation. 
JYSK 
 
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18 … 
19 … [Considerations of national procedural law] 
Budapest, 1 February 2024 
[signatures]