Seven checks.
No exceptions.
Every supplier passes the same verification sequence before listing. Every regulated order triggers a documented compliance workflow — covering EUDR for EU-bound goods and UFLPA forensic chain-of-custody for US-bound goods. No shortcuts, no adjustments per deal.
Where Merco stops. Merco prepares documents and data. It is not a customs broker or legal compliance advisor. For EU-bound goods, the Article 4 due diligence decision remains with you as EU operator of record. For US-bound goods, the UFLPA rebuttable presumption obligation and CBP Form 3461 entry rests with the importer of record.
Live knowledge graph preview
Full supply chain traceability, rendered in real time.
Every verified supplier in Merco generates an n-tier knowledge graph stored in Neo4j. Raw origin nodes (Tier 4) are organic — representing the farm, forest, or livestock source. Downstream nodes are hard-edged corporate entities. Green animated edges carry the EUDR-verified material flow from origin to assembly. Buyers access the live graph after registration. The preview below is a real read-only instance of the data model buyers use to verify EUDR and UFLPA chain-of-custody.
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Supplier verification methodology
Seven checks before a supplier is listed.
The criteria are fixed. They are not adjusted per deal or negotiated with suppliers. Every factory passes this sequence before their first listing appears on Merco. Click any check to expand.
Compliance Methodology (printable)WGS84 farm-boundary coordinates submitted by the supplier and cross-referenced against Global Forest Watch (GFW) Hansen deforestation data. Zero tolerance: any deforestation after Dec 31 2020 blocks listing.
Merco handles
Merco collects polygon coordinates from suppliers, runs the GFW cross-reference, and stores the verification result against the supplier record. Polygons are rechecked at each annual review.
Your responsibility
You remain the EU operator of record. The Article 10 obligation to verify geo-data rests with you. Merco prepares and cross-references — you approve.
Regulatory frameworks
Three frameworks. Specific obligations.
EUDR — EU Deforestation Regulation
Regulation (EU) 2023/1115
Applies to seven commodity categories including cattle, cocoa, coffee, palm oil, soy, wood, and rubber. EU operators must file a Due Diligence Statement (DDS) before placing regulated goods on the EU market. Failure to comply risks fines of up to 4% of annual EU turnover and market access suspension.
Key obligations
- Applies to cattle-derived leather from Argentina
- Cotton and synthetic textiles: exempt from EUDR scope
- DDS filed via TRACES NT portal before import
- Geo-polygon data required for each farm in the supply chain
- Article 4 obligation rests with the EU operator of record
What Merco does
Merco handles geo-polygon collection, GFW cross-reference, DDS drafting, and TRACES NT filing. You review and approve each document before submission. The Article 4 due diligence decision remains yours as EU operator.
CSDDD — Corporate Sustainability Due Diligence Directive
Directive (EU) 2024/1760
Applies to EU companies with more than 1,000 employees and net worldwide turnover above EUR 450 million. Requires documented supply chain due diligence covering environmental and human rights risks. Smaller companies phased in over 2028–2029.
Key obligations
- Requires documented supplier risk assessments
- Living wage, forced labour, environmental criteria scored
- Board-level accountability for due diligence processes
- Third-party audits recommended for high-risk suppliers
- Annual reporting required once in scope
What Merco does
Merco generates a CSDDD risk score (0–100) for each verified supplier across eight criteria. Score documentation is exportable for your annual due diligence report. Merco does not constitute an independent audit or legal certification.
EU-Mercosur FTA — Rules of Origin
EU-Mercosur Association Agreement
The EU-Mercosur Free Trade Agreement entered into force in January 2026. Apparel HS 61/62 duties phase from 12% MFN to 0% over 10 years. To claim preferential rates, goods must meet Rules of Origin criteria.
Key obligations
- HS 6109.10 cotton T-shirts: 10.8% in 2026 (down from 12%)
- Double-transformation rule: yarn-to-fabric + fabric-to-garment within Mercosur
- EUR.1 certificate issued by exporting country customs
- REX system accepted for self-certification
- Colombia at 0% since 2013 via EU-Colombia FTA (single transformation)
What Merco does
Merco confirms EUR.1 eligibility at HS code level and generates the supporting documentation for your customs broker to present at import. Import duty payment and customs declarations remain the buyer's responsibility.
UFLPA — Uyghur Forced Labor Prevention Act
19 U.S.C. § 1307 · CBP Operational Guidance
Enforced by US Customs and Border Protection (CBP). Establishes a rebuttable presumption that any goods mined, produced, or manufactured wholly or in part by entities on the UFLPA entity list are made with forced labor and are prohibited from US entry. CBP aggressively targets LATAM textile supply chains due to potential upstream material sourcing exposure. The burden of proof falls on the importer of record — not CBP.
Key obligations
- Rebuttable presumption: CBP presumes forced labor unless the importer proves otherwise
- LATAM textile supply chains targeted for upstream fiber sourcing exposure
- Goods detained at port pending full supply-chain documentation
- Transaction Certificates required to prove material provenance at each tier
- ABRAPA bale-level traceability links Brazilian cotton lots to Tier 4 farm origin
What Merco does
Merco cross-references each supplier's legal entity and known upstream material sources against the UFLPA entity list and OFAC database at onboarding and before each US-destined order. Transaction Certificate chains are mapped to identify any upstream exposure. ABRAPA blockchain data is used to link specific Brazilian cotton bales to farm-of-origin for CBP evidentiary packages.
Compliance document outputs
Structured. Traceable. Reviewable.
Four document types generated per compliant order. Each is stored against the order record and exportable at any time.
EUDR Due Diligence Statement
Merco compliance output
You review and approve before submission. The Article 4 obligation is yours.
EU-Mercosur FTA · HS 61/62 apparel
Tariff phase-out schedule.
12% MFN baseline phased to 0% over 10 years from January 2026. Double-transformation Rules of Origin apply. Colombia operates separately at 0% via EU-Colombia FTA (since 2013).
−1.2% vs MFN
−2.4% vs MFN
−3.6% vs MFN
−4.8% vs MFN
−6.0% vs MFN
−7.2% vs MFN
−8.4% vs MFN
−9.6% vs MFN
−10.8% vs MFN
Full elimination
Applies to apparel HS 61/62 from Brazil, Argentina, Uruguay, and Paraguay. Importers are responsible for declaring correct origin and filing EUR.1 certificates at customs. Merco calculates the applicable rate at order time.
Referenced standards
Certifications and data sources.
Compliance Methodology Document
Share this 12-page methodology overview with your legal or compliance team. Covers all seven checks, data sources, and responsibility boundaries.
Frequently asked questions
Suppliers can apply to become verified.
LATAM manufacturers apply via a simple form. Verification includes KYB, certification audit, and EUDR geo-polygon submission.
Ready to run your first compliant LATAM sourcing lane?
Submit a brief and receive a verified supplier shortlist with EUDR and ROO status pre-checked.