Guide to Transferring Units Overseas

December 2011

This guide is for Primary Representatives who wish to transfer Kyoto units from a New Zealand Emission Unit Register (NZEUR) holding account to an account in an overseas registry.

Preconditions

Access to a computer with internet access so as to navigate to www.eur.govt.nz.
Access to your email account to retrieve the transaction authorisation code required to authorise the transfer.
An approved holding account with sufficient Kyoto units to enable the transfer of units to an overseas registry account
Details of the overseas acquiring account, including the holding account number and overseas registry (party) identifier (for example, NZ for New Zealand, CH for Switzerland) - you should obtain and confirm these details with the overseas party to whom you are transferring the units before undertaking the transaction
Make sure you read the Guide to Kyoto Rules and Units for background information when intending to transfer units overseas.

Key Points

For accounts where primary representatives have been assigned roles as preparers and approvers, transactions must first be prepared by a preparer and then approved by an approver
Overseas transfer transactions are only proposed transactions when you submit them
The International Transaction Log (ITL) will validate your transaction before passing to the relevant acquiring overseas registry, who will undertake their own validation checks before accepting the transaction
The transfer only takes a few seconds if there are no discrepancies - but make sure you check the status of your transaction – don’t assume it has been completed!
When transferring units coming from numerous unit serial ranges in your account - only 75 different blocks of units may be selected in a single transfer transaction.
A Transaction Authorisation Code is required when approving the transfer of units from an NZEUR holding account. This applies to all transfers to domestic and international accounts, but excludes transfers (surrenders) to Crown accounts. When a transfer is prepared a unique authorisation code is immediately emailed to primary representatives authorised to approve unit transfers. Approvers are required to enter the authorisation code in addition to their password when authorising a transaction. The authorisation code is unique to an individual transaction and expires 24 hours after the transfer was prepared. The transaction is terminated and it needs to be prepared again.

CHECK THE ACCOUNT NUMBER BEFORE MAKING THE TRANSFER OVERSEAS

It is the transferring account holder's (transferor) responsibility to make sure they enter the correct acquiring account (transferee) details when undertaking the unit transfer. Below are some suggested steps to help check the acquiring account details and account number:

Under the Kyoto Protocol each national registry is required to make publicly available a list of authorised account holders (the only exception to this would be if local laws did not allow this level of disclosure). Therefore, the transferor could access the national registry's website to check the acquiring account details including the account number. For example, if the transferor goes to the Japanese national registry website through the following link:

1. United Nations Registry website
2. Click "Japan"
3. This takes the transferor to the list of publicly available information: http://www.registry.go.jp/account_info_en.html
4. From here the transferor can check the acquiring account details and account number.

The transferor could ask the acquiring overseas registry (through the transferee) to provide a certified copy of the acquiring account details and account number. In most cases they would probably direct the transferor to their public home page, if this information is already publicly available.
You could undertake a test run of the transaction by transferring 1 unit to the acquiring account and then checking with the transferee that the unit has been received in the correct account.

Convert New Zealand Units into New Zealand Assigned Amount Units for Transfer Overseas

New Zealand Units (NZUs) cannot be transferred directly to accounts in registries other than the New Zealand Registry. However, the Climate Change Response Act 2002 allows for account holders to exchange NZUs for NZ-originated AAUs (AAUs issued by New Zealand), which can be transferred overseas.

During the transitional period 1 July 2010 to 31 May 2013, only those NZUs transferred for forestry removal activities or under the forestry allocation plan will be eligible for conversion into NZ originated AAUs for subsequent transfer (“export”) to an overseas registry. The Registry has “tagged” NZUs as “exportable” or “not exportable” to enable account holders to distinguish which NZU’s are eligible for export.

Account holders can request to convert eligible NZUs into NZ originated AAUs directly online by accessing the Transaction menu item “NZU to AAU Conversions (Transfer Overseas). Please note that this request will be subject to the:

• ITL validation rules, that is, if the ITL rejects the overseas transaction, then the transaction will be terminated, or
• Commitment Period Reserve

Common Questions and Answers

Who can transfer units from a holding account? Only a Primary Representative on a holding account that contains units can transfer units from that account. For accounts where primary representatives have been assigned roles as preparers and approvers, transactions must first be prepared by a preparer and then approved by an approver before the transfer of units will be completed.
How long will it take for my overseas transfer to take effect? In most circumstances, if there are no discrepancies proposed transfers will be processed in real time. However, the UN central administrator’s registry, the International Transaction Log (ITL), may take up to 24 hours to finalise a transaction from the time the ITL receives an acceptable transaction proposal from a registry. This is to enable inspection and approval by the ITL and the overseas registry.
Do I have to do my transfer online? Yes.
Will transferring units cost me anything? There is no transaction fee for transferring units.
What is a Transaction Authorisation Code? A Transaction Authorisation Code is an additional layer of security to protect your user account from on-line fraud. You are required to submit a Transaction Authorisation Code when approving the transfer of units from your NZEUR holding account. This applies to all transfers to domestic and international accounts, but excludes surrenders to Crown accounts. When a transfer is prepared, a unique authorisation code is immediately emailed to primary representatives authorised to approve unit transfers. Primary representatives (approvers) will need to access their email account to retrieve the authorisation code from the email received titled NZEUR – Transaction Authorisation Required. Approvers are required to enter the authorisation code in addition to their password when authorising a transaction. The authorisation code is unique to an individual transaction and expires 24 hours after the transfer was prepared. The transaction is terminated and it needs to be prepared again.
What is a BLOCK of units? Each unit has a unique serial number. A block of units has a sequential set of serial numbers assigned to each unit in block. A block of units can be made up of 1 unit or many units. Transfers involve selecting a unit, a block or several blocks of units to transfer.
What is the difference between transferring accounts and acquiring accounts? The transferring account is the holding account out of which units are being transferred. The acquiring account is the holding account into which the units are being transferred. In this case, the account will be held in the relevant overseas registry. Holding Accounts must be opened before they will be able to acquire units.
What happens if I make a mistake? It is very important that you do NOT make a mistake when completing the transfer of units to an account in an overseas registry. Once the transaction has been completed and registered in the NZEUR it cannot be cancelled or changed. Should units be mistakenly transferred by you to the wrong account then you will have to liaise directly with the overseas acquiring account holder to resolve the transfer error and have the units transferred back to the transferring account.
Can I print off a confirmation receipt of my transfer? Yes, the best way is to use the ‘Print as PDF’ or ‘Print as HTML’ options offered at the top of the relevant page. Also, each of the primary representatives on the account will be sent email confirmation that the transaction has been registered and completed in the NZEUR.
Can I transfer NZUs into an overseas account? No, NZUs are not recognised by overseas registries – it is New Zealand’s domestic unit of trade. You would have to undertake a conversion transaction, which converts the NZUs (exportable) into Assigned Unit Amounts (AAUs). The equivalent number of AAUs (type of Kyoto unit) would then be transferred to the overseas account.
Are there any other restrictions on the transfer of Kyoto units to an overseas registry?
As Registries may have different rules for accepting units, some restrictions may apply to the transfer of units to overseas registries (for example New Zealand does not accept any units arising from nuclear energy). Account holders should check for specific rules of transfer with the respective overseas registry before undertaking the transfer.

Account holders will not be able to transfer Kyoto units internationally if their transfer would cause the minimum number of Kyoto units held within the NZEUR to fall below the Commitment Period Reserve (CPR). In New Zealand’s case we must at all times hold 90% of our initial assigned amount of 309,564,733 in the NZEUR. The current status of the CPR level is available on the home page of www.eur.govt.nz.

What do I do if my transaction is terminated by the ITL? Open the transaction details and look at the ITL messages to check what corrective actions need to take place. The most common codes and reasons why transactions may be terminated are:

Messages from non-European registries

5902 - Acquiring account does not exist (usually you will get this message when the account number has been entered in the wrong format)
5903 - Acquiring account is not eligible to receive units
5904 - Transaction inconsistent with Party Policy (when a transaction with units that is blocked by the other registry)
5905 - Transaction rejected by the account holder
5906 - Account has been closed.

Messages from European registries

7020 - the specified account identification code does not exist in the acquiring registry

This guide is based on the law at the date of issuance. The information in this guide does not alter the laws of New Zealand or other official guidelines or requirements. Readers of this guide should take specific advice from qualified professional people before undertaking any action following information received from this guide.