As sustainability directives put increasing pressure on businesses, many turn to carbon offsetting, which allows a business to stay within its regulatory requirements.

What is carbon offsetting?

Being a sustainable business brings benefits beyond helping the planet. As regulators impose stringent conditions on carbon emissions, businesses must remain compliant. On the other hand, consumers now value sustainability when they shop, meaning large carbon emissions can hurt a business’s reputation.

Carbon credit offsetting allows a business to purchase the opportunity to emit an amount of carbon. The purchase theoretically offsets the carbon emission as the proceeds support sustainability initiatives. It is treated as a debt. This debt can be bought and sold as a ‘carbon credit’.

What is a ‘carbon credit’ fraud?

The prosecution will usually accuse the suspect of a charge of fraud by false representation, under the Fraud Act 2006.

Elements of the offence of fraud by false representation are that the individual:

• makes a false representation (meaning an incorrect statement);
• dishonestly (knowing the statement is incorrect or will misdirect another);
• with intent to make a gain for himself or another, to cause loss to another or to expose another to risk of loss.

The offence is triggered as soon as the false representation is made. It does not matter whether the rest of any potential fraud is carried out.

What are the commonly prosecuted carbon credit frauds?

Selling carbon credits is not an offence on its own. There must be an extra criminal factor, usually dishonesty, in the sale to attract criminal liability.

• Mis-selling: For example, fraud by false representation charges sometimes materialise when a salesman mis-sells carbon credits or exaggerates the potential benefits of an investment opportunity. All investment carries risk, but there is a fine line between stressing the potential investment upside and dishonestly misrepresenting the whole investment.

• Falsifying documents: Linked to fraud by false representation is an offence of creating an ‘instrument for the use in fraud’, which includes falsifying documents. Carbon credit salespeople must be sure that the credit they are selling is genuine and they do not knowingly interfere with the certificates of ownership. They may find themselves under investigation if they do.  

• Phishing Scam: As the carbon credits are so valuable, they are at risk of being stolen. ‘Phishing’ scams encourage the disclosure of sensitive information, which includes the access keys to a company’s carbon credits.

Occasionally, companies can be embarrassed by unknowingly purchasing carbon credits linked to mistreatment of officials or members of the public in developing countries.

Are carbon credits regulated in the UK?

Carbon credits are currently not regulated in the UK. Carbon credits do not have the level of cross-border regulation of a more mature commodity like gas or oil. Since most of the carbon credit producers are based overseas, the UK has no jurisdiction to regulate them.  

What will happen if I am arrested for Carbon Credit fraud? 

If you are arrested for this offence, you will be taken to a police station for the purpose of being interviewed under caution. Among other rights you have the right to be represented at this interview by a solicitor free of charge. This is usually a duty solicitor nominated by the police. You also have however the right to nominate a solicitor of your choice. The solicitor will be able to obtain some information from the investigators about why you have been arrested and will be able to discuss this with you and provide you with advice prior to the interview.

ABV Solicitors have expert fraud solicitors able to attend the police station on short notice nationwide.

What should I do if I receive a letter from a crime enforcement agency such as the police, HMRC, FCA or SFO requesting me to contact them to arrange a voluntary interview? 

Upon receipt of such a letter it is critical that you seek the assistance of a solicitor immediately. ABV Solicitors will allocate a specialist fraud solicitor for you and make arrangements on your behalf to liaise with the investigators and facilitate an interview at your convenience.

This will allow sufficient time for you to arrange a face-to-face meeting with a specialist solicitor in advance of any interview so you can be advised, and fully prepared on what to expect.

We are here to fully support you and those concerned during this difficult time. Obtaining immediate legal advice can make all the difference to the outcome of the investigation.

What if I am released under investigation or released on bail for Carbon Credit fraud and need a solicitor or wish for a second opinion?

This can be an extremely stressful time for you, your family and your business.

You may have already been interviewed and released on bail or released under investigation. You may have not used a solicitor at all during your interview or are not confident with the solicitor who represented you and require a specialist solicitor with experience in this area.

Whatever the situation, ABV Solicitors have a dedicated team of experts who are experienced in this field and who can provide you with sound advice and assistance.

What if I am charged for Carbon Credit fraud?

If you have been charged with Carbon Credit fraud you must seek the assistance of a defence specialist immediately. ABV Solicitors have a dedicated Fraud and Financial Crime department consisting of experienced solicitors who are specialist in this field.

ABV Solicitors can provide immediate advice and assistance and assist you and your business during this stressful time.

Restraint Orders and Account Freezing Orders 

Law enforcement agencies such as the police, HMRC, FCA or SFO often use ancillary powers in addition to making arrests and search warrants. These include applying for Restraint Orders or Account Freezing Orders under the Proceeds of Crime Act 2002.

The purpose of this is to prevent those under suspicion to dissipate assets which may have been acquired through the commission of committing offences.

These Orders are draconian and can cause severe disruption to the lives of individuals and those connected to them including their businesses.

ABV Solicitors have a dedicated team of experts within their Fraud and Financial Crime Department who specialise in tackling these Orders.

If any of the above circumstances apply to you or someone you know contact ABV Solicitors Fraud and Financial Crime Department immediately on 0344 587 9996 or visit our website at www.abvsolicitors.co.uk

ABV Solicitors are available 24/7 and offer their professional expertise and assistance nationwide.