Carbon tax fraudsters exploit loopholes

LONDON: A patchwork of unilateral actions by a few European Union nations to prevent suspected tax fraud in carbon permit trading could serve only to push the activity into neighboring states.

A Reuters investigation into suspected carousel tax fraud exposed a mixture of tax loopholes, lack of regulatory oversight and easy market access that could open the EU's $90 billion emissions trading scheme to abuse.

Investment banks and brokers said they are worried they may have to foot unpaid tax bills left after any fraud or face legal action for having traded unknowingly with anyone charged.