The possibility “for freezing allowances and accounts” is specified in more detail in Articles 70, 71 and 73 of the Commission’s proposal for the Registry Regulation amendment and amounts to three differing legal measures with distinct premises, effects and entities authorised to use them, i.e.:
- suspension of all access by authorised representatives,
- suspension of access to allowances or Kyoto units,
- suspension of processes.
The communication revealed by the European Commission signalled that on 17 June 2011 the Climate Change Committee backed proposals to enhance the integrity and the security of the registries system underpinning the EU Emissions Trading System. Pursuant to the press release, if the regulation is endorsed by the Parliament and the Council, registry administrators and law enforcement authorities will be able to detect fraud more easily.
Some important aspects of the Commission’s legislative proposal as regards the Registry Regulation changes were analysed in “The draft of the Commission Regulation establishing a Union Registry – the finality of transfers rules and other details for the new security measures revealed”.
It is however worth highlighting (after the said communication) that competent authorities will now be able to respond quickly in case of fraud, for instance by “freezing allowances and accounts in case of a suspicious transaction”.
The envisioned possibility for freezing allowances and accounts is worth of specific underlining. The current lack of legal basis for such an action was the one of the main reasons for the freezing the entire registry systems in the recent spate of cyberattacks. Even if only a contained number of allowances in only one national registry system was attacked, it was necessary to freeze entire registry system (see, nearby, Article 69 of the Commission Regulation No 2216/2004 of 21 December 2004 for a standardised and secured system of registries pursuant to Directive 2003/87/EC of the European Parliament and of the Council and Decision No 280/2004/EC of the European Parliament and of the Council).
Suspension of access
The Central Administrator may suspend access to the Community independent transaction log and a registry administrator may suspend access to his registry if there is a breach of security of the Community independent transaction log or of a registry which threatens the integrity of the Community independent transaction log or of a registry or the integrity of the registries system and the back-up facilities under Article 68 are similarly affected.
This serious shortcoming will no longer be in place. The possibility mentioned in the Communication “for freezing allowances and accounts” is specified in more detail in Articles 70, 71 and 73 of the Commission’s proposal for the Registry Regulation amendment (hereinafter referred to as the “Proposal”) and amounts to three differing legal measures with distinct premises, effects and entities authorised to use them i.e.:
- suspension of all access by authorised representatives,
- suspension of access to allowances or Kyoto units,
- suspension of processes.
Suspension of all access by authorised representatives
Legal basis:
the legal basis for such a measure is Article 70 of the Proposal.
Premises:
the suspension of all access by authorised representatives might take place where there exists a reasonable suspicion that there is a breach of security of the Union Registry or the EUTL or that there exists a serious security risk to the Union Registry or the EUTL that threatens the integrity of the system, which includes the back-up facilities.
The entity entitled to take the measure and a procedure:
the entity authorised to apply the said instrument is the European Commission, the Commission may instruct the Central Administrator of The Union Registry to suspend access to the Union Registry or the EUTL or any part thereof. The notice of such a suspension must be clearly displayed on the public area of the EUTL's web site and should include the likely duration of the suspension.