Police dismantle vast carbon credit fraud

Le Mondereports that UK police have dismantled an extensive network specializing in carbon credit fraud. On Wednesday 19 August, nine people were arrested on charges of misappropriating £38 million (44 million euros). According to the French daily, "Participants in the fraud took advantage of the fact that VAT is charged on carbon credits throughout the EU, but not in the United Kingdom. They bought tons of British CO2 credits, sold them on in other countries, and pocketed huge sums of VAT that should have been declared to tax authorities. " The EU's decision to impose emissions ceilings on private companies has led to an explosion in the market for greenhouse gas credits. Companies who do not use up all of their carbon credits are allowed to sell them to other companies who have exceeded their quotas. In September, the European Commission will announce changes to itsVAT Directive to combat the problem of fraud.