VAT Carousel Fraud issues highlighted in the EU Emissions Trading Scheme

Progress within the EU institutions has been slowed by the recent European Parliament elections and by the uncertainty within the Commission due to the failure of Ireland to ratify the Lisbon Agreement. It now appears that the current Commission will continue in a 'caretaker' mode for at least the rest of 2009.

In the meantime, a number of financial irregularities have been noted within the European Emissions Trading Scheme; a suspicion of widespread Missing Trader Fraud on the trades of carbon allowances was recently identified in France, the UK and the Netherlands, as a result of which each of those Member States has taken unilateral action to attempt to stem the fraud. It is widely expected that the Commission will propose a modified Reverse Charge system as an interim measure across all Member States.

RTvat has been in active discussion with the relevant departments within the Commission and other interested stakeholders, proposing that a real-time system applied to this specific area could both eliminate the fraud in very simple and immediate fashion and act as a pilot for a wider application of the technology.