UPDATE 1-Probe under way in alleged French CO2 VAT fraud

Thu Jun 11, 2009 5:18pm IST

* Noone under official investigation yet-prosecutor's office

* BlueNext unaware of an investigation related to exchange

* BlueNext reiterates no evidence of fraud on exchange

(Adds BlueNext reaction, background)

PARIS/LONDON, June 11 (Reuters) - The Paris prosecutor's office confirmed on Thursday a probe was under way into a suspected multi-million euros value-added tax (VAT) fraud in the French carbon emissions market.

"An inquiry is under way but we are not yet about to place people under official investigation," a source at the Paris prosecutor's office said.

The French Budget Ministry has made carbon permits exempt from VAT in order to prevent a potential scam linked to a French emissions exchange, a government source said on Monday.

A ministry source said there had been no evidence of a VAT fraud despite rumours circulating that a recent surge in volumes in the European Union emissions permits traded over BlueNext, Europe's main exchange for spot permit trading, was suspicious.

Through carousel fraud, also called missing trader fraud, fraudsters import goods VAT-free from other countries, and then sell the goods to domestic buyers, charging them VAT. The sellers then disappear without paying the collected tax to the government collection authorities.

A BlueNext spokesman told Reuters on Thursday there was no evidence VAT fraud was occurring over its exchange and that the rumours were "unsubstantiated", adding he was unaware of any investigation relating specifically to the exchange.

He said he had not been contacted by any authorities, including the Paris prosecutor's office, about the matter.

BlueNext, a joint venture between NYSE Euronext NYX.PA and Caisse des Depots, halted spot trading on Monday.

Last Thursday and Friday, the French national emissions registry was closed for what it called "technical reasons."

BlueNext resumed trade on Wednesday, with the spot contracts exempt from France's 19.6 percent VAT.

Some 2.5 million carbon credits were traded on Wednesday versus a record 20 million credits traded on June 2 and a daily average of 9.4 million in the past 4 weeks.

The exchange had traded just over 800,000 credits by 1100 GMT on Thursday. (Reporting by Muriel Boselli in Paris and Michael Szabo in London; editing by James Jukwey)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage