“For four and a half years it was possible to use false identities to trade CO2 allowances from the Danish registry because the Danish Environmental Protection Agency and the Danish Energy Agency did not require documentation of the account owners’ identity, even though this was against EU rules.”
A carbon trading tax scam that has cost E.U. countries billions of dollars was possible partly because of lax regulations in Denmark, the country’s National Audit Office said in a report this week.
“The Environment Ministry and the Climate and Energy Ministry did not perform satisfactorily from January 2005 to December 2009,” the state auditors wrote in a scathing report. “The actions of Danish Energy Agency have attracted VAT fraudsters to Denmark and have affected the scope of VAT carousel fraud in other E.U. countries,” they said.
Criminals committed value-added tax fraud by selling E.U. carbon permits and collecting VAT from buyers, then disappearing before transferring the money to the relevant tax authorities. The money was usually parked in non-E.U. bank accounts that are hard to trace. The fraud could be repeated several times in different E.U. countries, hence the “carousel” name…