Organized Crime in Charge of EU Carbon Trade, Police Say

Report by Raymond Frenken, EUX.TV

First, there was ClimateGate – the scandal with hacked emails suggesting scientists have abused data for research on global warming. Now, another international climate scandal is emerging that may have an impact on the talks in Copenhagen.
Europes top police body Europol, the closest thing that European Union has to the American Fbi, has exposed a massive fraud with the unions official market in carbon credits, the Emission Trading System.

The fraud is costing tax payers in a handful of European countries more than five billion euro – 7 billion dollars – and raises doubts about the effectiveness of carbon trading as a measure to curb emissions.

Europol director Rob Wainwright issued the following statement:
These criminal activities endanger the credibility of the European Union Emission Trading System and lead to the loss of significant tax revenue for governments.

Police authorities in Belgium, Denmark, France, the Netherlands, Spain and the United Kingdom have worked together in what Europol calls a process to identify and disrupt the organised criminal structures behind these fraud schemes.
Lets see if we can explain the scheme, using this graphic provided by Europol.

The fraud is based on a what is tax experts and investigators call as a Carroussel fraud with missing traders. This carroussel generates money by stealing value added tax from governments.
The first step of the criminals is to open a trading account with a national carbon registry, in the name of a newly registered company.

From there, this company buys EU emission allowances in another country on one of the six official carbon exchanges in Europe.

After that, these emission allowances are moved to another country, and subsequently sold to an unregulated broker in yet another country.

This broker then charges VAT on these transactions but does not pay the collected VAT to the tax authorities.
Just before the tax authorities realize that this company owes them huge amounts of VAT, basically a period of a few months, the company and its owners disappear.

A new company is set up, using other front men, to repeat the carroussel. Crime rings that run such schemes can have several dozen or hundreds of companies whose real owners are difficult to trace.

Basically, this type of fraud is possible because European countries continue to disagree on single market tax legislation. Carroussel fraud is a constant feature in the European cross-border market and until recently only happened with shipments of valuable goods such as iPods or flat-panel tvs, not with carbon credits.

Europes tax commissioner, in an interview with EUX.TV, has estimated the damage from these carroussel frauds at more than 60 billion euro per year as Euroean finance minister continue to disagree on effective measures to fight this fraud.
The Emission Trading System system was set up in 2005 as part of Europes efforts to curb emissions of greenhouse gases. That topic now is at the top of the agenda at the UN Climate summit in Copenhagen this week and next. This unprecedented and massive fraud is likely to prove a major embarrasment for EU negotiators.

Possibly related posts:

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  3. Woman Who Invented Credit Default Swaps is One of the Key Architects of Carbon Derivatives, Which Would Be at the Very CENTER of Cap and Trade
  4. Like all bubble’s, carbon market goes bust
  5. Carbon prices say it all: Copenhagen was a failure

7 Responses to “Organized Crime in Charge of EU Carbon Trade, Police Say”

  1. DebinFlorida says:

    Sounds like THE FED is at it double time with a trade off in Carbon Credits AND US DOLLARS. Another Ponzi scheme!

    I don’t feel Anything for Gore, after all , he did’t invent the internet and now he has to listen to us plot against his latest Sham. Don’t you just wonder how much they paid him to push this climate change scheme?

    It is the NWO and we Americans are hardly impressed with Nobel Peace Prize choices. Now we got it and we have every intention of acting before giving up our Sovereignty!

    Our British friends are suffering with Brown throwing them to the wolves as well . The people are waking up. They are looking to Americans and warning us of how they are loosing their freedom and their culture ! The Brits will be facing a terrible winter with downturn of the economy. Pray to God for us all. Happy Hanukah and Merry Christmas !

  2. Anne says:

    I don’t see what the problem is really, let me see if I have understood this correctly. One set of fraudsters have soaked the taxpayers for money via carbon taxes and set up trading in thin air and another smarter bunch have come along and set up another lot of companies trading in thin air and have cut out the first lot of fraudsters … hm, personally I can’t see where a crime has been committed. Maybe they’re bunch of fedup tax payers!

  3. BR says:

    Congratulations on the opening of your site and thank you!

  4. BR says:

    Just found this link at James Delingpole’s UK Telegraph blog via a commenter there. (Click on the word “link”.)

    It alleges that Pachauri, Chairman of the IPCC, has ties to Indian company TATA, and implies he stands to gain from the closing down of a British steel factory and its sale of carbon emission credits to TATA.

    “Indian Conglomerate Tata, currently the world’s largest steelmaker, expects to make £1.25billion from closing the Redcar plant with most of this coming from cashing in on the carbon credits the plant was granted by the European Union under its Emissions Trading Scheme.”

    “In 1974 the Tata Group funded the Tata Engergy Research Institute (TERI) of which Pachauri has been chairman since its foundation. Though business links between Group and TERI are downplayed the two continue work closely together to exploit business opportunities thrown up by climate change.”

    If true, Pachauri should resign in disgrace and be investigated.

  5. Warren Z says:

    The idea of carbon credits is itself a scam.

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