Environment Agency intensifies crackdown on waste export fraud
Regulator warns of dramatic rise in illegal claims for Packaging Export Recovery Notes
The EA says it has been ramping up its efforts to combat criminals who falsely claim packaging export recovery notes (PERNs), either by misrepresenting non-existent waste, non-UK sourced waste, or waste that has already been claimed.
This fraudulent activity is part of a wider issue of waste crime, which is estimated to cost the UK economy approximately £1 billion annually.
Misuse of Packaging Export Recycling Notes
At the heart of this fraudulent activity is the misuse of PERNs, which are evidence that recyclable packaging has been sent abroad for reprocessing. However, the Environment Agency has found that rogue operators are exploiting the system by falsifying documents, which not only undermines legitimate businesses but also results in illegal waste being exported and often dumped overseas, causing environmental harm.
Domestic reprocessors have long argued that the current system for managing PERNs is flawed, as it creates an uneven playing field with Packaging Recovery Notes (PRNs) issued for recyclable material processed in the UK. The contention has been that non-target contamination in packaging exported for recycling is not deducted from the PERN tonnage, whereas this is the case for PRNs. This issue is exacerbated by the fact that domestic reprocessors are unlikely to take highly contaminated recyclate, creating the pressure for this material to be sent to destinations that do not place stringent checks on the level of contamination.
Further to this, the EA continues to be challenged by the ongoing issue of containers stuffed with baled waste at the back and baled recycling at the front, not only claiming PERNs but also avoiding disposal charges (including landfill tax).
Jon Ashcroft, Producer Responsibility Regulatory Services Operations Manager at the Environment Agency, stated: "Waste crime has an extremely harmful impact on our environment and the Environment Agency is determined to crack down on it, working with law enforcement agencies to disrupt organised crime, arrest suspects and secure convictions."
The Environment Agency's crackdown has already yielded significant results. During 2024, 17 individuals were arrested for fraud and money laundering in connection with PERN frauds. Account Freezing Orders have led to the forfeiture of £665,000, and in May 2024, a suspect was arrested at Birmingham International Airport upon entering the UK from Spain.
To meet the growing challenge, the agency has increased its dedicated team of investigators fourfold. This team is supported by the Environment Agency's Economic Crime Unit, which includes Accredited Financial Investigators, Intelligence Officers, and money laundering experts.
International collaboration and prevention strategies
The fight against waste export fraud extends beyond UK borders. The Environment Agency is collaborating with international partners to gather evidence and intelligence. For example, EA investigators were recently deployed to Vilnius, Lithuania, to collect evidence as part of an ongoing investigation in collaboration with the Lithuanian Department of Environmental Protection.
In addition to enforcement actions, the Environment Agency is focusing on prevention and disruption strategies. In 2023, the agency received 435 applications for accreditation and approved 386. The number of applications refused and withdrawn in 2023 was over three times higher compared to 2022, a trend that has continued into 2024.
The Environment Agency encourages anyone who suspects fraudulent activity in the waste export industry to report it. Concerns can be directed to [email protected] or anonymously to Crimestoppers.
