|The surrender of allowances initiated in error - the only reversible transaction pursuant to the draft of the Commission Regulation establishing a Union Registry of emission allowances - Page 2|
|Monday, 05 September 2011 05:27|
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But the second invention, i.e. 24-hour delay in effecting transfers (despite that at the first glance it seems that it could be evenly useful (through providing, in particular, additional time for examination for the correctness of all data pertaining to the registry process)), after analysing of the regulatory language used in the Regulation leads to the conclusion that the said delay was designed for substantially different purpose than the correction of errors in allowances registry submissions.
So, when it comes to the specific rules for the said 24-hour-delay, the Regulation provides that for all transfers of allowances and Kyoto units, an out of band confirmation shall be required by the Union Registry before the transfer can be initiated. The transfer will be able to be initiated only between 08:00 and 18:00 Central European Time from Monday until Friday and if all additional authorised representatives (the joint participation of at least two persons will be required, with the exception for transfers to an account on the trusted account list of the account holder), whose approval is required, have confirmed the transaction.
Upon initiation, a notification shall be sent to all account representatives indicating the proposed initiation of the transfer. For all transfers of allowances and Kyoto units, a delay of 24 hours, apply between initiation and the transfer being communicated for finalisation.
Article 36(5) of the Regulation provides literally that during the 24-hour delay ‘an account representative may propose to the national administrator the cancellation of the transfer on the grounds of a suspicion that the transfer was initiated fraudulently’. Such a wording may create some doubts as regards the issue whether an account representative may propose to the national administrator the cancellation of the transfer on the grounds of a erroneously or mistakenly initiated transfer. The explicit wording of the provision at issue points to the inadmissibility of such a request (erroneously or mistakenly initiated transfer is not mentioned literally in the Regulation as a lawful ground for the cancellation, the only premise listed is the ‘suspicion that the transfer was initiated fraudulently’.
The question arise whether there is a regulatory gap in that regard in the Regulation or maybe the above-mentioned provisions are the product of the conscious legislative assumption and the follow-up to the finality of transfers principle. It should be noted, however, that the finality of transfer principle refers to the ‘unwinding of a transaction that has become final and irrevocable under this Regulation’ (Article 37(2) of the Regulation). There arises, however, serious doubt whether, in principle, the transaction becomes - before the expiry of the 24-hours delay – ‘final and irrevocable’ under the Regulation. Above-mentioned circumstances point to the need for the re-consideration for the scope of allowable grounds for request made under Article 36(5) of the Regulation for the cancellation of the transfer. It seems that there are no demonstrable and significant obstacles for more extensive catalogue of premises for the cancellation of the transfer during 24-hour delay (than the only existing so far ‘suspicion that the transfer was initiated fraudulently’).
Clearing this ambiguity would be very helpful in the practical running of the emissions registry and day-to-day operations on registry accounts.