Article Index


If the covered entity fails to transfer allowances equal to the untimely surrender obligation to its compliance account within the said period ARB:

 

1) identifies holding accounts controlled by affiliates of the deficient covered entity to which the covered entity has transferred compliance instruments during the compliance period for which a compliance obligation remains unfilled; and

 

2) prevents transfers from the identified holding accounts, and retrieves allowances from those accounts to meet the untimely surrender obligation.

 

In order to have removed the restrictions on transfers from the holding accounts controlled by the covered entity and affiliated entities they must meet surrender obligations.

 

The above-described measures seem reasonable. In the absence of analogous system protections in the EUETS Directive the enforcement procedures may turn out to be less effective. There are already precedents as regards the attitude that the group of the affiliated companies should be treated for some purposes as a single economic unit. The company legal autonomy is infringed in this way on the ground of many legal procedures. If such a measure were introduced in the EUETS, the compliance obligation under the emission trading scheme wouldn’t be an exception in this field.