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Viewpoints
Climate change research is the least of the ETS's troubles The EU's Emissions Trading Scheme (ETS) has had a tough time in the past six months. Some might say that is only to be expected. The UN's December meeting in Copenhagen did not result in a binding agreement for companies worldwide to reduce their emissions - far from it. Questions over the research that lies behind the Intergovernmental Panel on Climate Change (IPCC) caused a media storm - along with ammunition for the determined group that believes climate change is all just hot air. But those big questions were not behind the ETS's troubles. No, it's the basics of business that seem to be at fault here. The ETS has been the focus of fraudulent "missing trader" deals, where goods are sold and resold across international borders. The VAT charged and due to the appropriate government disappears along with the trader (hence the name). This is an old scam. Mobile phones used to be trucked around Europe and sold over and over again to complete the fraud. All that has happened since then is that the goods used as the "carrier" have got smaller - using chips instead of entire phones, for example - and the value of the goods has increased. That makes the ETS perfect: no physical transport of goods is required and trades can be done at the click of a mouse. It appears to have been a joy for fraudsters - Europol estimates €5 billion has been lost to fraud and up to 90 per cent of trades in some markets were bogus. This year, the new problem is "phishing". Fake emails invited traders to click through to a site where they would upload their login details. Which, in some cases, they dutifully did. The result: more bogus trades. In all the furore over climate change, some market basics seem to have been forgotten. Know your counterparty. Do your due diligence. Don't fall for phishing emails. Europol suggests gas and electricity markets might be next in line for the fraudsters. That's a more difficult proposition for them. Many energy trades are VAT exempt in any case, and there is a requirement for delivery of energy and gas at the end of the line. But that just makes the scam more difficult, not impossible. Traders should remember the old adage: buyer beware. Source: Disconnector © Faversham House Group Ltd 2010. News articles may be copied or forwarded
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