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Corruption of Bribery
Chapter 6 : Corruption in the “Carbon World”
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electronically via various gateways to the International Transaction Log (ITL) run by the UNFCCC
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and the EU Transaction Log run for ETS (EUTL) and to commercially operated trading platforms
(see page xx).
To say the “Registry System” is a mess would be an understatement:
Between 2008 and 2011 there have been three major revisions: all “knee jerk” reactions
to errors, phishing and hacking and a fourth is currently being considered
Although specifications were provided by the EU, each National Registry developed
individually, using different platforms, protocols, security, due diligence and security
standards
Kyoto comes to an end in December 2012, but National Registries have to remain
connected to the ITL until 2015, running in parallel with a new EU wide (“Union”) registry.
At that time National Registries could be abandoned. There will, in fact, be three different
systems in operation at the same time and two or maybe even three Transaction Logs
In 2012, aviation will come under the ETS and will be based on a new form of a non‐Kyoto
credit called an Aviation AEUA. This means that these are recognised by the EUTL but not
the ITL
The EU was remarkably resistant to tracking down or recovering stolen credits
The Third and Fourth Registry Regulations, supported by the Markets and Financial Directive is
supposed to address some of the above and other problems including improved security, better
data transfer standards, imposing delays over delivery, out of hours shut down and out of
bounds confirmation of transactions deemed to be suspicious as well as a “reverse charge” rule
“for VAT which puts the obligation for tax on buyers , hopefully eliminating carousel frauds.
In March 2010, the Hungarian government sold 800,000 CERS (at 7 Euros a tonne) which had been surrendered
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by LCP Operators and cancelled in the ETS to Hungarian Energy Power Kft (HEP). HEP sold them to Microdyne ,
a Cypriot company operating from London, which then resold them to a Hong Kong broker who sold them via
BlueNext at between €11.5 and €12 a tonne to European brokers and bankers who were apparently unaware that
the credits had no standing in the ETS. BlueNext reacted by shutting down the exchange so that systems could
be upgraded to prevent recycling of CERS. The fact that this risk was not properly assessed when the system was
designed is typical of carelessness in the “Carbon World”.
Hungarian officials claimed that everything was kosher because they had believed the credits would be used for
Kyoto compliance purposes in the Japanese Registry. Although there was more than a shade of chest beating no
one seemed to question the stupidity, poor controls or carelessness of allowing retired ETS credits to be used in
other regimes for Kyoto compliance purposes.
92 Primarily the “International Transaction Log” that records only AAUs, CERS etc.
93 Primarily the Community International Transaction Log that records EUAs, CERS etc.
94 Managed by one Anvar Kasimov, an Israeli National appointed in May 2010 and about to be struck off
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the Carbon World for Gower.docx | NATIONAL REGISTRIES & INTERNATIONAL
LOGS
