EU CLEANS UP EMISSIONS MRKTS

Offices raided and 21 held as EU probe into carbon trading fraud intensifies; Denmark criticised for slow reaction after apparently being targeted in alleged 'carousel' scam
Felicity Carus, 1 May 2010 (UK Guardian)

"British tax authorities have arrested 21 people after raiding homes and offices across Europe as part of a crackdown on alleged carbon-trading fraud…Some 450 staff took part in raids…across the continent…[in] an ongoing investigation into alleged carbon-trading fraud, which is estimated to have cost €5bn in unpaid taxes.

"Deutsche Bank and energy company RWE were among 230 offices and homes raided this week by German authorities. Four arrests followed…In a linked operation in the UK, eight people were arrested in Scotland and 13 in England…"

click thru for the live feed

"Pressure to stamp out suspected fraudulent activity on the EU emissions trading scheme (ETS) has increased in recent months. Denmark appears to have been particularly vulnerable to so-called carousel fraud and has had to slash the number of accounts on its carbon registry, which allows traders to buy and sell pollution permits within the ETS from 1,200 to 140. Most of the remaining accounts are barred from trading as the investigation continues…after the Danish authorities imposed tight new registration requirements…

"A total of 58 people across Europe have now either been arrested or charged in connection with alleged carbon-trading fraud in the last nine months…Carousel fraud, also called missing-trader fraud, involves bogus traders buying pollution permits in the EU emissions trading scheme in one country without paying VAT. They sell them on in another country with VAT added, but pocket the difference, rather than pay the VAT to the relevant tax authorities. With the profit made, the trader goes missing…"

click thru for the live feed

"The Danish authorities were asked to change their registration procedures by the European commission in July last year…[after] Danish tax authorities had notified the ministry that ‘especially Denmark is now the target for VAT fraud’…At around the same time, Britain, France and the Netherlands scrapped VAT on carbon trading after concerns about carousel fraud on the carbon markets. Soon after, on 19 August, seven arrests were made…

"The Danish Energy Agency tightened registration procedures for new accounts, requesting passport ID and VAT numbers, from last summer. But existing account holders were not required to provide the documents…In December last year, the DEA finally began to request this information…"