Seven checks.
No exceptions.

Every supplier passes the same verification sequence before listing. Every regulated order triggers a documented compliance workflow. No shortcuts, no adjustments per deal.

Where Merco stops. Merco prepares documents and data. It is not a customs broker or legal compliance advisor. Import declarations, regulatory submissions, and the Article 4 due diligence decision remain with you as EU operator of record.

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.

01

EUDR geo-polygons

EUDR Art. 10

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.

02

DDS drafted and filed

EUDR Art. 4

Due Diligence Statement prepared using supplier-provided geo-data, certifications, and supply-chain declarations. Filed to the TRACES NT portal before any EU market entry. Reference number stored against the order.

03

CSDDD risk score

CSDDD Art. 8

AI-assisted 0-100 environmental and labour risk score across eight CSDDD criteria including living wage, forced labour, environmental harm, and community impact. Score is recalculated at each annual review.

04

Rules of Origin

EU-Mercosur FTA · EU-Colombia FTA

EUR.1 eligibility confirmed per HS code and manufacturing stage. For Mercosur suppliers, double-transformation rule is checked. For Colombia, single-transformation applies under the EU-Colombia FTA. Certificate of origin issued at filing.

05

UFLPA forced-labour check

UFLPA · CSDDD Art. 9

Legal entity and supply-chain participants cross-referenced against the US Uyghur Forced Labor Prevention Act (UFLPA) entity list and OFAC sanctions database. Used as a proxy for EU forced-labour due diligence requirements.

06

Certification audit

Certification-specific

Active certifications validated with issuing bodies: BCI Better Cotton, GOTS, WFTO Fair Trade, VISEC (SENASA Argentina), OEKO-TEX Standard 100, Responsible Wool Standard, ZQ Merino. Expiry dates tracked; renewal alerts issued 60 days before lapse.

07

KYB identity verification

KYB standard

Legal entity confirmed via local business registry (CNPJ Brazil, CUIT Argentina, RUT Uruguay, NIT Colombia). Tax ID, EORI number, and Manufacturer Identification (MID) code verified. Beneficial ownership screened.

Regulatory frameworks

Three frameworks. Specific obligations.

EUDR — EU Deforestation Regulation

In force

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

Mandatory from 2027

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

Active since Jan 2026

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. For most apparel, this is double transformation (yarn to fabric to garment) within Mercosur.

Key obligations

  • HS 6109.10 cotton T-shirts: 10.8% in 2026 (down from 12%)
  • Double-transformation rule: yarn-to-fabric + fabric-to-garment must occur in Mercosur
  • EUR.1 certificate issued by exporting country customs
  • REX (Registered Exporter) system accepted for self-certification
  • Colombia operates under EU-Colombia FTA at 0% since 2013 (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.

Compliance document outputs

Structured. Traceable. Reviewable.

EUDR Due Diligence Statement

Generated
PortalTRACES NT
ReferenceBR-2026-0042-DDS
GFW checkCLEAR · 0.0 ha affected
Doc hashSHA-256 · 8f3a2c1d...e94b

You review and approve before submission. The Article 4 obligation is yours.

EUR.1 Certificate of Origin

Confirmed
HS code6109.10 · Cotton T-shirts
CriterionDouble transformation met
OriginBrazil · GSP-GEN eligible
FTA rate10.8% (2026)

Presented by your customs broker at import. Import duty is the buyer's obligation.

Supplier Verification Report

Verified
KYBCNPJ confirmed · EORI on file
CertsBCI · GOTS · OEKO-TEX
UFLPAEntity check: CLEAR
CSDDDScore: 97 / 100

Recalculated annually. Score documentation is exportable for your CSDDD report.

Lab Test Certificate

Pending upload
StandardOEKO-TEX Standard 100
SupplierCottonline do Brasil
StatusAwaiting upload
Due5 days

Order held until certificate received. Supplier notified automatically.

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).

2026NOW

10.8%

−1.2% vs MFN

2027

9.6%

−2.4% vs MFN

2028

8.4%

−3.6% vs MFN

2029

7.2%

−4.8% vs MFN

2030

6.0%

−6.0% vs MFN

2031

4.8%

−7.2% vs MFN

2032

3.6%

−8.4% vs MFN

2033

2.4%

−9.6% vs MFN

2034

1.2%

−10.8% vs MFN

2035

0%

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.

BCI Better CottonGOTSOEKO-TEX Standard 100AbvtexWFTO Fair TradeResponsible Wool StandardZQ MerinoWoolmarkVISEC Argentina (SENASA)ISO 9001IULTCSREACHGRSInexmodaWRAPTRACES NT (EU)Global Forest WatchUFLPA Entity List
Legal entityMerco Technologies Ltd.
Data ownershipBuyer-owned · exportable at any time
Methodology refsEUDR Art.10 · CSDDD Art.8 · UFLPA guidance
Payment railsStripe Connect · SWIFT bank wires

Suppliers can apply to become verified.

LATAM manufacturers apply via a simple form. Verification includes KYB, certification audit, and EUDR geo-polygon submission.

Apply as a supplier

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.