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Wednesday, April 28, 2010

Deutsche Bank, others raided in global warming carbon trading scandal

4/28, Bloomberg: "German prosecutors searched Deutsche Bank AG and RWE AG in a raid on 230 offices and homes nationwide to investigate 180 million euros ($238 million) of tax evasion linked to emissions trading.
  • The Frankfurt Chief Prosecutor’s Office said it targeted 150 suspects at 50 companies and has frozen assets. Deutsche Bank, Germany’s largest bank, and RWE, the country’s second- biggest utility, said they are cooperating with the probe and aren’t the focus of the investigations.

The U.K., France, Netherlands are among nations that started investigations last year of “carousel fraud,” where carbon traders collect tax and disappear before turning it in to authorities. Today’s raid was the biggest related to a fraud that may have tainted an estimated 7 percent of carbon trades in last year’s $125 billion market....

  • Europe lost about 5 billion euros in revenue for the 18 months ending in 2009 because of value-added tax fraud in the CO2 market, according to Europol, the law enforcement agency.

“We’re supporting similar investigations in other EU member states,” said Soren Pedersen, spokesman for Europol in the Hague. He declined to elaborate....

  • Deutsche Bank is cooperating with investigators and isn’t the focus of the probe, spokesman Ronald Weichert said by phone.

RWE’s Supply & Trading offices were searched, spokesman Michael Rosen said today. RWE is cooperating and the company “hasn’t been charged and is not under suspicion,” he said today in an e-mailed statement. The investigation concerns one company that had business relations with RWE Supply & Trading in 2009, Rosen said.

  • About 400 million metric tons of emission trades may have been fraudulent last year, or about 7 percent of the total market, including futures transactions, according to estimates from Bloomberg New Energy Finance. BNEF is a unit of Bloomberg LP, the parent of Bloomberg News.

Europol’s estimate would indicate about 27 percent of the market was fraudulent for 18 months ended in 2009, or 1.9 billion tons. The comparison of the BNEF and Europol estimates is based on a value-added tax of 17 percent, an average CO2- permit price of 15.80 euros a ton and 7 billion tons traded in the period.

  • The EU approved measures last month to fight fraud in its emissions market, the world’s largest, by shifting the levy to customers. The law eliminates the need for the supplier to submit the payment to the treasury.

German prosecutors declined to name the 50 companies involved in the raids....

The “VAT-carousel” led to the loss of 180 million euros in tax revenue and prosecutors froze money in accounts that may be linked to wrongdoings, Wittig said. He declined to name the account holders or say how much was frozen."

UN's Climate boss Pachauri and ClimateGate "independent" prosecutor Oxburgh both on Deutsche Bank Climate Advisory Board.

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