Talk:EU Emissions Annex Wikitext: Difference between revisions
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:(D) If a transfer of {{euaprov|Allowances}} is completed after 4:00 p.m., Central European Time, on a {{euaprov|Delivery Business Day}} or at any time on any day other than a {{euaprov|Delivery Business Day}}, then those {{euaprov|Allowances}} will be deemed to have been delivered at 10:00 a.m., Central European Time, on the next following {{euaprov|Delivery Business Day}}. If a transfer of {{euaprov|Allowances}} is completed before 10:00 a.m., Central European Time, on a {{euaprov|Delivery Business Day}}, then those {{euaprov|Allowances}} will be deemed to have been delivered at 10:00 a.m., Central European Time, on that day. <br> | :(D) If a transfer of {{euaprov|Allowances}} is completed after 4:00 p.m., Central European Time, on a {{euaprov|Delivery Business Day}} or at any time on any day other than a {{euaprov|Delivery Business Day}}, then those {{euaprov|Allowances}} will be deemed to have been delivered at 10:00 a.m., Central European Time, on the next following {{euaprov|Delivery Business Day}}. If a transfer of {{euaprov|Allowances}} is completed before 10:00 a.m., Central European Time, on a {{euaprov|Delivery Business Day}}, then those {{euaprov|Allowances}} will be deemed to have been delivered at 10:00 a.m., Central European Time, on that day. <br> | ||
{{euaprov|(d)(i)(3)}} '''{{euaprov|Netting}}''': If on any date {{euaprov|Allowances}} of the same {{euaprov|Allowance Type}} and {{euaprov|Specified Compliance Period}} would otherwise be deliverable for two or more {{euaprov|EU Emissions Allowance Transaction}}s by each party to the other and, if applicable, between the same pair of {{euaprov|Holding Account}}s of the parties, then, on such date, each party’s obligation to make delivery of any such {{euaprov|Allowances}} will be automatically satisfied and discharged and, if the aggregate amount of {{euaprov|Allowances}} that would otherwise have been deliverable by one party exceeds the aggregate amount of {{euaprov|Allowances}} that would otherwise have been deliverable by the other party, replaced by an obligation upon the party by which the larger aggregate amount would have been deliverable to deliver to the other party the excess of the larger aggregate amount over the smaller aggregate amount. <br> | {{euaprov|(d)(i)(3)}} '''{{euaprov|Netting}}''': If on any date {{euaprov|Allowances}} of the same {{euaprov|Allowance Type}} and {{euaprov|Specified Compliance Period}} would otherwise be deliverable for two or more {{euaprov|EU Emissions Allowance Transaction}}s by each party to the other and, if applicable, between the same pair of {{euaprov|Holding Account}}s of the parties, then, on such date, each party’s obligation to make delivery of any such {{euaprov|Allowances}} will be automatically satisfied and discharged and, if the aggregate amount of {{euaprov|Allowances}} that would otherwise have been deliverable by one party exceeds the aggregate amount of {{euaprov|Allowances}} that would otherwise have been deliverable by the other party, replaced by an obligation upon the party by which the larger aggregate amount would have been deliverable to deliver to the other party the excess of the larger aggregate amount over the smaller aggregate amount. <br> | ||
{{euaprov|(d)(iii)}} '''{{euaprov|Partial Settlement}}''' <br> | {{euaprov|(d)(iii)}} '''{{euaprov|Partial Settlement}}''' <br> | ||
If, on the {{euaprov|Delivery Date}}, {{euaprov|Delivering Party}} delivers to {{euaprov|Receiving Party}} fewer {{euaprov|Allowances}} than the {{euaprov|Allowances to be Delivered}} (such shortfall the “'''{{euaprov|Allowance Shortfall}}'''”), {{euaprov|Receiving Party}}’s obligation to pay under {{euaprov|Physical Settlement}} above shall be reduced by the {{euaprov|Allowance Shortfall}} multiplied by either the {{euaprov|Allowance Purchase Price}} (for an {{euaprov|Allowance Forward Transaction}}) or the {{euaprov|Allowance Strike Price}} (for an {{euaprov|Allowance Option Transaction}}), and “{{euaprov|Failure to Deliver}}” above will apply for the {{euaprov|Allowance Shortfall}} (with references to {{euaprov|Number of Allowances}} (in the case of an {{euaprov|Allowance Forward Transaction}}) and {{euaprov|Allowances to be Delivered}} (in the case of an {{euaprov|Allowance Option Transaction}}) being read as references to the {{euaprov|Allowance Shortfall}}). <br> | If, on the {{euaprov|Delivery Date}}, {{euaprov|Delivering Party}} delivers to {{euaprov|Receiving Party}} fewer {{euaprov|Allowances}} than the {{euaprov|Allowances to be Delivered}} (such shortfall the “'''{{euaprov|Allowance Shortfall}}'''”), {{euaprov|Receiving Party}}’s obligation to pay under {{euaprov|Physical Settlement}} above shall be reduced by the {{euaprov|Allowance Shortfall}} multiplied by either the {{euaprov|Allowance Purchase Price}} (for an {{euaprov|Allowance Forward Transaction}}) or the {{euaprov|Allowance Strike Price}} (for an {{euaprov|Allowance Option Transaction}}), and “{{euaprov|Failure to Deliver}}” above will apply for the {{euaprov|Allowance Shortfall}} (with references to {{euaprov|Number of Allowances}} (in the case of an {{euaprov|Allowance Forward Transaction}}) and {{euaprov|Allowances to be Delivered}} (in the case of an {{euaprov|Allowance Option Transaction}}) being read as references to the {{euaprov|Allowance Shortfall}}). <br> | ||
{{euaprov|(d)(iv)}} '''{{euaprov|Abandonment of Scheme}}'''<br> | {{euaprov|(d)(iv)}} '''{{euaprov|Abandonment of Scheme}}'''<br> | ||
(1) If before the {{euaprov|Delivery Date}} the Scheme is, because of official written public pronouncement by the European Community, no longer scheduled to proceed or is to be discontinued, either party may, by written notice to the other party, terminate the relevant {{euaprov|EU Emissions Allowance Transaction}}, in which case neither party shall have any further delivery or payment obligations under or for that {{euaprov|EU Emissions Allowance Transaction}} (other than for any payment due by one party in connection with delivery obligations already performed by the other party) and | (1) If before the {{euaprov|Delivery Date}} the Scheme is, because of official written public pronouncement by the European Community, no longer scheduled to proceed or is to be discontinued, either party may, by written notice to the other party, terminate the relevant {{euaprov|EU Emissions Allowance Transaction}}, in which case neither party shall have any further delivery or payment obligations under or for that {{euaprov|EU Emissions Allowance Transaction}} (other than for any payment due by one party in connection with delivery obligations already performed by the other party) and, a payment shall not be due under Section {{isdaprov|6(e)}} of the {{isdaprov|Agreement}} or otherwise for such termination. <br> | ||
(2) If there is a termination under sub-clause (1) {{euaprov|Delivering Party}} must promptly refund to {{euaprov|Receiving Party}} any amount that may have been paid by {{euaprov|Receiving Party}} for the {{euaprov|EU Emissions Allowance Transaction}} that is an {{euaprov|Allowance Forward Transaction}} or a {{euaprov|Call}} and {{euaprov|Receiving Party}} must promptly refund to {{euaprov|Delivering Party}} any amount that may have been paid by {{euaprov|Delivering Party}} for an {{euaprov|EU Emissions Allowance Transaction}} which is a {{euaprov|Put}} together with interest on that amount in the same currency as that amount from the date that amount was paid until the date of termination of the {{euaprov|EU Emissions Allowance Transaction}} under sub-clause (1), at the rate certified by the party required to refund the amount to be a rate offered to such party by a major bank in a relevant interbank market for overnight deposits in the applicable currency, such bank to be selected in good faith by that party for purposes of obtaining a representative rate that will reasonably reflect conditions prevailing at the time in the relevant market. <br> | (2) If there is a termination under sub-clause (1) {{euaprov|Delivering Party}} must promptly refund to {{euaprov|Receiving Party}} any amount that may have been paid by {{euaprov|Receiving Party}} for the {{euaprov|EU Emissions Allowance Transaction}} that is an {{euaprov|Allowance Forward Transaction}} or a {{euaprov|Call}} and {{euaprov|Receiving Party}} must promptly refund to {{euaprov|Delivering Party}} any amount that may have been paid by {{euaprov|Delivering Party}} for an {{euaprov|EU Emissions Allowance Transaction}} which is a {{euaprov|Put}} together with interest on that amount in the same currency as that amount from the date that amount was paid until the date of termination of the {{euaprov|EU Emissions Allowance Transaction}} under sub-clause (1), at the rate certified by the party required to refund the amount to be a rate offered to such party by a major bank in a relevant interbank market for overnight deposits in the applicable currency, such bank to be selected in good faith by that party for purposes of obtaining a representative rate that will reasonably reflect conditions prevailing at the time in the relevant market. <br> | ||
{{euaprov|(d)(v)}} '''{{euaprov|Invoicing}}'''<br> | {{euaprov|(d)(v)}} '''{{euaprov|Invoicing}}'''<br> | ||
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Where a party is in breach of the {{euaprov|No Encumbrance Obligation}}, the following shall apply: | Where a party is in breach of the {{euaprov|No Encumbrance Obligation}}, the following shall apply: | ||
:(1) This {{isdaprov|Agreement}} and all other {{euaprov|Transactions}} agreed by the parties under this {{isdaprov|Agreement}} shall continue unaffected. | :(1) This {{isdaprov|Agreement}} and all other {{euaprov|Transactions}} agreed by the parties under this {{isdaprov|Agreement}} shall continue unaffected. | ||
:(2) [[Without prejudice]] to any defences available to {{euaprov|Delivering Party}} | :(2) [[Without prejudice]] to any defences available to {{euaprov|Delivering Party}}, following written notice of that breach from {{euaprov|Receiving Party}} to {{euaprov|Delivering Party}} (irrespective of how long after the relevant {{euaprov|Delivery Date}} such notice is provided) and subject to Part (d)(vii)(4) below, {{euaprov|Receiving Party}} shall: | ||
::(A) determine the {{euaprov|Encumbrance Loss Amount}} arising from that breach either on the date such notice is deemed to be received or as soon as reasonably practicable thereafter; and | ::(A) determine the {{euaprov|Encumbrance Loss Amount}} arising from that breach either on the date such notice is deemed to be received or as soon as reasonably practicable thereafter; and | ||
::(B) shall notify {{euaprov|Delivering Party}} of such {{euaprov|Encumbrance Loss Amount}} due, including detailed support for its calculation. | ::(B) shall notify {{euaprov|Delivering Party}} of such {{euaprov|Encumbrance Loss Amount}} due, including detailed support for its calculation. | ||
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:(3) By no later than the third (3rd) Business Day after the later of (i) receipt of a valid invoice in connection with such {{euaprov|Encumbrance Loss Amount}} and (ii) receipt of the above-mentioned notice including detailed support of {{euaprov|Receiving Party}}’s calculation of the {{euaprov|Encumbrance Loss Amount}}, {{euaprov|Delivering Party}} must pay the {{euaprov|Encumbrance Loss Amount}} to {{euaprov|Receiving Party}}, which amount shall bear interest at the {{euaprov|Default Rate}}. Upon payment of the {{euaprov|Encumbrance Loss Amount}} by {{euaprov|Delivering Party}}, the parties shall have no further obligations for that {{euaprov|EU Emissions Allowance Transaction}} and that breach. {{euaprov|Receiving Party}} acknowledges that its exclusive remedies for such breach are those set out in this Annex(d)(vii)(No Encumbrances). | :(3) By no later than the third (3rd) Business Day after the later of (i) receipt of a valid invoice in connection with such {{euaprov|Encumbrance Loss Amount}} and (ii) receipt of the above-mentioned notice including detailed support of {{euaprov|Receiving Party}}’s calculation of the {{euaprov|Encumbrance Loss Amount}}, {{euaprov|Delivering Party}} must pay the {{euaprov|Encumbrance Loss Amount}} to {{euaprov|Receiving Party}}, which amount shall bear interest at the {{euaprov|Default Rate}}. Upon payment of the {{euaprov|Encumbrance Loss Amount}} by {{euaprov|Delivering Party}}, the parties shall have no further obligations for that {{euaprov|EU Emissions Allowance Transaction}} and that breach. {{euaprov|Receiving Party}} acknowledges that its exclusive remedies for such breach are those set out in this Annex(d)(vii)(No Encumbrances). | ||
:(4) Where a breach of the {{euaprov|No Encumbrances Obligation}} is caused by the transfer of an {{euaprov|Affected Allowance}}, {{euaprov|Delivering Party}} shall be liable for the {{euaprov|Encumbrance Loss Amount}} if, at the date it first acquired, received or purchased such {{euaprov|Affected Allowance}}, it was not acting [[in good faith]]; otherwise, {{euaprov|Delivering Party}} shall only be liable for the {{euaprov|Encumbrance Loss Amount}} (without prejudice to any other defences available to {{euaprov|Delivering Party}} [[including, but not limited to]], any defences of statutes of limitation or similar), if: | :(4) Where a breach of the {{euaprov|No Encumbrances Obligation}} is caused by the transfer of an {{euaprov|Affected Allowance}}, {{euaprov|Delivering Party}} shall be liable for the {{euaprov|Encumbrance Loss Amount}} if, at the date it first acquired, received or purchased such {{euaprov|Affected Allowance}}, it was not acting [[in good faith]]; otherwise, {{euaprov|Delivering Party}} shall only be liable for the {{euaprov|Encumbrance Loss Amount}} (without prejudice to any other defences available to {{euaprov|Delivering Party}} [[including, but not limited to]], any defences of statutes of limitation or similar), if: | ||
::(A) {{euaprov|Receiving Party}}, whether or not the holder of such {{euaprov|Affected Allowance}}, who is subject to a claim of the {{euaprov|Original Affected Party}}, has, in order to resist or avoid any {{euaprov|Encumbrance Loss Amount}} from arising, used its best endeavours to defend such a claim for that {{euaprov|Affected Allowance}} | ::(A) {{euaprov|Receiving Party}}, whether or not the holder of such {{euaprov|Affected Allowance}}, who is subject to a claim of the {{euaprov|Original Affected Party}}, has, in order to resist or avoid any {{euaprov|Encumbrance Loss Amount}} from arising, used its best endeavours to defend such a claim for that {{euaprov|Affected Allowance}} and was unsuccessful (other than for reasons of its own lack of good faith); or | ||
::(B) {{euaprov|Receiving Party}}, whether or not the holder of such {{euaprov|Affected Allowance}}, who acted in good faith for its purchase of such {{euaprov|Affected Allowance}} and who is subject to a claim of a third party (other than the {{euaprov|Original Affected Party}}) for that {{euaprov|Affected Allowance}}, has used all reasonable endeavours to mitigate the {{euaprov|Encumbrance Loss Amount}}. <br> | ::(B) {{euaprov|Receiving Party}}, whether or not the holder of such {{euaprov|Affected Allowance}}, who acted in good faith for its purchase of such {{euaprov|Affected Allowance}} and who is subject to a claim of a third party (other than the {{euaprov|Original Affected Party}}) for that {{euaprov|Affected Allowance}}, has used all reasonable endeavours to mitigate the {{euaprov|Encumbrance Loss Amount}}. <br> | ||
{{euaprov|(d)(viii)}} '''{{euaprov|Value Added Taxes}}'''<br> | {{euaprov|(d)(viii)}} '''{{euaprov|Value Added Taxes}}'''<br> | ||
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---- | ---- | ||
{{euaprov|(e)}} '''{{euaprov|Defined Terms and Interpretation}}'''<br> | {{euaprov|(e)}} '''{{euaprov|Defined Terms and Interpretation}}'''<br> | ||
'''{{euaprov|AEUA}}''' or '''{{euaprov|AEU Allowance}}''': Means an “allowance” as defined in the {{euaprov|Directive}} and which is issued under Chapter II thereof. <br> | '''{{euaprov|AEUA}}''' or '''{{euaprov|AEU Allowance}}''': Means an “allowance” as defined in the {{euaprov|Directive}} and which is issued under Chapter II thereof. <br> | ||
'''{{euaprov|Affected Allowance}}''': Means an {{euaprov|Allowance}} which is or is alleged to have been the subject of an {{euaprov|Unauthorised Transfer}} as confirmed by an {{euaprov|Appropriate Source}}. <br> | '''{{euaprov|Affected Allowance}}''': Means an {{euaprov|Allowance}} which is or is alleged to have been the subject of an {{euaprov|Unauthorised Transfer}} as confirmed by an {{euaprov|Appropriate Source}}. <br> | ||
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'''{{euaprov|Allowance Purchase Price}}''': Means, for an {{euaprov|EU Emissions Allowance Transaction}} which is an {{euaprov|Allowance Forward Transaction}}, the amount specified in the related {{euaprov|Confirmation}}. <br> | '''{{euaprov|Allowance Purchase Price}}''': Means, for an {{euaprov|EU Emissions Allowance Transaction}} which is an {{euaprov|Allowance Forward Transaction}}, the amount specified in the related {{euaprov|Confirmation}}. <br> | ||
'''{{euaprov|Allowance Shortfall}}'''is defined in {{euaprov|(d)(iii)}} (''{{euaprov|Partial Settlement}}''). <br> | '''{{euaprov|Allowance Shortfall}}'''is defined in {{euaprov|(d)(iii)}} (''{{euaprov|Partial Settlement}}''). <br> | ||
'''{{euaprov|Allowance Type}}''': Means an {{euaprov|AEU Allowance}} or an {{euaprov|EU Allowance}} as specified. <br> | '''{{euaprov|Allowance Type}}''': Means an {{euaprov|AEU Allowance}} or an {{euaprov|EU Allowance}} as specified. <br> | ||
'''{{euaprov|Appropriate Source}}''': Means any “competent authority” (as defined in the {{euaprov|Registries Regulation}}) or the {{euaprov|Central Administrator}}, {{euaprov|National Administrator}} or any other authority having power under the {{euaprov|Directive}} or the {{euaprov|Registries Regulation}} to block, suspend, refuse, reject, cancel or otherwise affect the transfer (whether in whole or in part) of {{euaprov|Allowances}}, any recognised law enforcement or tax authorities of a Member State, the European Anti-fraud Office of the European Commission or Europol. <br> | '''{{euaprov|Appropriate Source}}''': Means any “competent authority” (as defined in the {{euaprov|Registries Regulation}}) or the {{euaprov|Central Administrator}}, {{euaprov|National Administrator}} or any other authority having power under the {{euaprov|Directive}} or the {{euaprov|Registries Regulation}} to block, suspend, refuse, reject, cancel or otherwise affect the transfer (whether in whole or in part) of {{euaprov|Allowances}}, any recognised law enforcement or tax authorities of a Member State, the European Anti-fraud Office of the European Commission or Europol. <br> | ||
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'''{{euaprov|Close-out Cost of Carry Delay}}''': Means the number of days in the period from (and including) the scheduled {{euaprov|Payment Date}} until the date that would be the {{euaprov|Payment Date}} if delivery had been made on the {{euaprov|Final Delivery Date}} or {{euaprov|Final Compliance Date}} (as the case may be). <br> | '''{{euaprov|Close-out Cost of Carry Delay}}''': Means the number of days in the period from (and including) the scheduled {{euaprov|Payment Date}} until the date that would be the {{euaprov|Payment Date}} if delivery had been made on the {{euaprov|Final Delivery Date}} or {{euaprov|Final Compliance Date}} (as the case may be). <br> | ||
'''{{euaprov|Close-out Cost of Carry Rate}}''': Means a rate equal to the {{isdadefsprov|Floating Rate}} that would be determined for the period from the scheduled {{euaprov|Payment Date}} to the {{isdaprov|Early Termination Date}}, if the {{euaprov|Reset Date}} were the date that would be the {{euaprov|Payment Date}} if delivery had been made on the {{euaprov|Final Delivery Date}} or {{euaprov|Final Compliance Date}} ([[as the case may be]]) and the applicable {{isdadefsprov|Floating Rate Option}} were “EUR-EONIA-OIS-COMPOUND”. <br> | '''{{euaprov|Close-out Cost of Carry Rate}}''': Means a rate equal to the {{isdadefsprov|Floating Rate}} that would be determined for the period from the scheduled {{euaprov|Payment Date}} to the {{isdaprov|Early Termination Date}}, if the {{euaprov|Reset Date}} were the date that would be the {{euaprov|Payment Date}} if delivery had been made on the {{euaprov|Final Delivery Date}} or {{euaprov|Final Compliance Date}} ([[as the case may be]]) and the applicable {{isdadefsprov|Floating Rate Option}} were “EUR-EONIA-OIS-COMPOUND”. <br> | ||
'''{{euaprov|Cost of Carry Delay}}''': Means the number of days in the period from (and including) the scheduled {{euaprov|Payment Date}} until the {{euaprov|Delayed Payment Date}}. <br> | '''{{euaprov|Cost of Carry Delay}}''': Means the number of days in the period from (and including) the scheduled {{euaprov|Payment Date}} until the {{euaprov|Delayed Payment Date}}. <br> | ||
'''{{euaprov|Cost of Carry Rate}}''': Means a rate equal to the {{isdadefsprov|Floating Rate}} that would be determined for a {{euaprov|Calculation Period}} commencing on (and including) the scheduled {{euaprov|Payment Date}} and ending on (but excluding) the {{euaprov|Delayed Payment Date}}, if the {{euaprov|Reset Date}} were the last day of that {{euaprov|Calculation Period}} and the applicable {{isdadefsprov|Floating Rate Option}} were “EUR-EONIA-OIS-COMPOUND”. <br> | '''{{euaprov|Cost of Carry Rate}}''': Means a rate equal to the {{isdadefsprov|Floating Rate}} that would be determined for a {{euaprov|Calculation Period}} commencing on (and including) the scheduled {{euaprov|Payment Date}} and ending on (but excluding) the {{euaprov|Delayed Payment Date}}, if the {{euaprov|Reset Date}} were the last day of that {{euaprov|Calculation Period}} and the applicable {{isdadefsprov|Floating Rate Option}} were “EUR-EONIA-OIS-COMPOUND”. <br> | ||
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:(ii) if no such place is specified, the place in which Seller’s address for purposes of receiving notices connected with the relevant {{euaprov|EU Emissions Allowance Transaction}} is located; or | :(ii) if no such place is specified, the place in which Seller’s address for purposes of receiving notices connected with the relevant {{euaprov|EU Emissions Allowance Transaction}} is located; or | ||
:(iii) if no such address has been given, the place in which {{euaprov|Delivering Party}} has its registered office. | :(iii) if no such address has been given, the place in which {{euaprov|Delivering Party}} has its registered office. | ||
'''{{euaprov|Delivery Business Day}}''': Means any day, which is not a Saturday or Sunday, on which commercial banks are open for general business in both {{euaprov|Delivering Party’s Delivery Business Day Location}} and the {{euaprov|Receiving Party’s Delivery Business Day Location}}. <br> | '''{{euaprov|Delivery Business Day}}''': Means any day, which is not a Saturday or Sunday, on which commercial banks are open for general business in both {{euaprov|Delivering Party’s Delivery Business Day Location}} and the {{euaprov|Receiving Party’s Delivery Business Day Location}}. <br> | ||
'''{{euaprov|Delivery Date}}''': Means the date or dates specified as such in the related {{isdaprov|Confirmation}} (subject to any adjustment under Part {{euaprov|(d)(i)(5)}} (''{{euaprov|Suspension Event}}'')). <br> | '''{{euaprov|Delivery Date}}''': Means the date or dates specified as such in the related {{isdaprov|Confirmation}} (subject to any adjustment under Part {{euaprov|(d)(i)(5)}} (''{{euaprov|Suspension Event}}'')). <br> | ||
'''{{euaprov|Directive}}''': Means {{euaprov|Directive}} 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council {{euaprov|Directive}} 96/61/EC, as amended from time to time. <br> | '''{{euaprov|Directive}}''': Means {{euaprov|Directive}} 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council {{euaprov|Directive}} 96/61/EC, as amended from time to time. <br> | ||
'''{{euaprov|DPRC Shortfall}}''' is defined inthe definition of {{euaprov|Delivering Party’s Replacement Cost}} in this Annex {{euaprov|(e)}} (''{{euaprov|Defined Terms and Interpretation}}''). <br> | '''{{euaprov|DPRC Shortfall}}''' is defined inthe definition of {{euaprov|Delivering Party’s Replacement Cost}} in this Annex {{euaprov|(e)}} (''{{euaprov|Defined Terms and Interpretation}}''). <br> | ||
'''{{euaprov|EEP Non-delivery}}'''is defined in {{euaprov|(d)(xi)}} (''{{euaprov|Failure to Deliver (Alternative Method) – EEP Applicable}}''). <br> | '''{{euaprov|EEP Non-delivery}}'''is defined in {{euaprov|(d)(xi)}} (''{{euaprov|Failure to Deliver (Alternative Method) – EEP Applicable}}''). <br> | ||
'''{{euaprov|EEP Payment}}'''is defined in {{euaprov|(d)(xi)}} (''{{euaprov|Failure to Deliver (Alternative Method) – EEP Applicable}}''). <br> | '''{{euaprov|EEP Payment}}'''is defined in {{euaprov|(d)(xi)}} (''{{euaprov|Failure to Deliver (Alternative Method) – EEP Applicable}}''). <br> | ||
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:(ii) if no such place is specified, the place in which {{euaprov|Receiving Party}}’s address for purposes of receiving notices connected with the relevant {{euaprov|EU Emissions Allowance Transaction}} is located; or | :(ii) if no such place is specified, the place in which {{euaprov|Receiving Party}}’s address for purposes of receiving notices connected with the relevant {{euaprov|EU Emissions Allowance Transaction}} is located; or | ||
:(iii) if no such address has been given, the place in which {{euaprov|Receiving Party}} has its registered office. <br> | :(iii) if no such address has been given, the place in which {{euaprov|Receiving Party}} has its registered office. <br> | ||
'''{{euaprov|Reconciliation Deadline}}''': Means 30th April in each calendar year for the preceding calendar year or such later date in each year as may be determined under the {{euaprov|Scheme}} for the surrender of {{euaprov|Allowances}} under the {{euaprov|Scheme}}. <br> | '''{{euaprov|Reconciliation Deadline}}''': Means 30th April in each calendar year for the preceding calendar year or such later date in each year as may be determined under the {{euaprov|Scheme}} for the surrender of {{euaprov|Allowances}} under the {{euaprov|Scheme}}. <br> | ||
'''{{euaprov|Registries Regulation}}''': Means the Commission Regulation (EU) no. 389/2013 of 2 May 2013 establishing a {{euaprov|Union Registry}} under the {{euaprov|Directive}} 2003/87/EC of the European Parliament and of the Council, Decisions No.280/2004/EC and No. 406/2009/EC of the European Parliament and of the Council and repealing Commission Regulation (EU) No. 920/2010 and No. 1193/2011, as amended from time to time. <br> | '''{{euaprov|Registries Regulation}}''': Means the Commission Regulation (EU) no. 389/2013 of 2 May 2013 establishing a {{euaprov|Union Registry}} under the {{euaprov|Directive}} 2003/87/EC of the European Parliament and of the Council, Decisions No.280/2004/EC and No. 406/2009/EC of the European Parliament and of the Council and repealing Commission Regulation (EU) No. 920/2010 and No. 1193/2011, as amended from time to time. <br> | ||
'''{{euaprov|Registry}}''': Means the registry established by a Member State, a non-Member State or the EU, under the {{euaprov|International Rules}}, in order to ensure the accurate accounting of the issue, holding, transfer, acquisition, surrender, cancellation and replacement of {{euaprov|Allowances}} | '''{{euaprov|Registry}}''': Means the registry established by a Member State, a non-Member State or the EU, under the {{euaprov|International Rules}}, in order to ensure the accurate accounting of the issue, holding, transfer, acquisition, surrender, cancellation and replacement of {{euaprov|Allowances}}. <br> | ||
'''{{euaprov|Registry Operation}}''': Means, other than by reason of the occurrence of an {{euaprov|Administrator Event}}: | '''{{euaprov|Registry Operation}}''': Means, other than by reason of the occurrence of an {{euaprov|Administrator Event}}: | ||
:(a) the establishment of and continuing functioning of the {{euaprov|Relevant Registry}}; | :(a) the establishment of and continuing functioning of the {{euaprov|Relevant Registry}}; | ||
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'''{{euaprov|Relevant Registry}}''': Means the {{euaprov|Registry}} through which a party is obliged to perform a delivery or acceptance obligation under an {{euaprov|EU Emissions Allowance Transaction}}. Where a party has specified more than one {{euaprov|Specified Holding Account}} for delivery or acceptance purposes, the {{euaprov|Relevant Registry}} shall be identified under Part {{euaprov|(d)(i)(2)}}(C). <br> | '''{{euaprov|Relevant Registry}}''': Means the {{euaprov|Registry}} through which a party is obliged to perform a delivery or acceptance obligation under an {{euaprov|EU Emissions Allowance Transaction}}. Where a party has specified more than one {{euaprov|Specified Holding Account}} for delivery or acceptance purposes, the {{euaprov|Relevant Registry}} shall be identified under Part {{euaprov|(d)(i)(2)}}(C). <br> | ||
'''{{euaprov|RPRC Shortfall}}''' is defined inthe definition of {{euaprov|Receiving Party’s Replacement Cost}} in this Annex {{euaprov|(e)}} (''{{euaprov|Defined Terms and Interpretation}}''). <br> | '''{{euaprov|RPRC Shortfall}}''' is defined inthe definition of {{euaprov|Receiving Party’s Replacement Cost}} in this Annex {{euaprov|(e)}} (''{{euaprov|Defined Terms and Interpretation}}''). <br> | ||
'''{{euaprov|Seller}}''': Means the party specified as such in the related {{isdaprov|Confirmation}}. <br> | '''{{euaprov|Seller}}''': Means the party specified as such in the related {{isdaprov|Confirmation}}. <br> | ||
'''{{euaprov|Seller Business Day}}''': Means, for an {{euaprov|EU Emissions Allowance Transaction}} which is an {{euaprov|Allowance Option Transaction}}, any day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the city in which Seller is located for purposes of receiving notices. <br> | '''{{euaprov|Seller Business Day}}''': Means, for an {{euaprov|EU Emissions Allowance Transaction}} which is an {{euaprov|Allowance Option Transaction}}, any day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the city in which Seller is located for purposes of receiving notices. <br> | ||
'''{{euaprov|Shortfall}}''' is defined inthe definition of {{euaprov|Receiving Party’s Replacement Cost}} in this Annex {{euaprov|(e)}} (''{{euaprov|Defined Terms and Interpretation}}''). <br> | '''{{euaprov|Shortfall}}''' is defined inthe definition of {{euaprov|Receiving Party’s Replacement Cost}} in this Annex {{euaprov|(e)}} (''{{euaprov|Defined Terms and Interpretation}}''). <br> | ||
'''{{euaprov|Specified Holding Account}}''': Means, for a party and an {{euaprov|EU Emissions Allowance Transaction}}, the {{euaprov|Holding Account}}s (if any) specified as such for such party (i) in the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}}; or (ii) where no such accounts are specified under (i), in the Annex to this Annex; in either case under Part {{euaprov|(d)(xii)}}(1)(A) or Part {{euaprov|(d)(xii)}}(2)(A) (as applicable) and subject to modification under Part {{euaprov|(d)(xii)}}(1)(B) and Part {{euaprov|(d)(xii)}}(2)(B). <br> | '''{{euaprov|Specified Holding Account}}''': Means, for a party and an {{euaprov|EU Emissions Allowance Transaction}}, the {{euaprov|Holding Account}}s (if any) specified as such for such party (i) in the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}}; or (ii) where no such accounts are specified under (i), in the Annex to this Annex; in either case under Part {{euaprov|(d)(xii)}}(1)(A) or Part {{euaprov|(d)(xii)}}(2)(A) (as applicable) and subject to modification under Part {{euaprov|(d)(xii)}}(1)(B) and Part {{euaprov|(d)(xii)}}(2)(B). <br> | ||
'''{{euaprov|Trade Date}}''':will be specified in the {{isdaprov|Confirmation}}. <br> | '''{{euaprov|Trade Date}}''':will be specified in the {{isdaprov|Confirmation}}. <br> | ||
'''{{euaprov|Third Compliance Period}}''': Means the period referred to in Article 16 of the {{euaprov|Directive}} 2009/29/EC starting 1 January 2013 to 31 December 2020. <br> | '''{{euaprov|Third Compliance Period}}''': Means the period referred to in Article 16 of the {{euaprov|Directive}} 2009/29/EC starting 1 January 2013 to 31 December 2020. <br> | ||
Revision as of 14:28, 13 July 2022
Quick Editor Nutshell version
(a) Scope
This Annex applies to Transactions that specify the Fourth Compliance Period as the applicable “Specified Compliance Period” (“EU Emissions Allowance Transaction”s).
(b) ISDA Definitions
The 2006 ISDA Definitions, are incorporated into this Annex. If there is any inconsistency between them and this Annex, this Annex will govern.
(c) Multiple Delivery Dates
If there is more than one Delivery Date and each such Delivery Date has a specified:
- (i) a Payment Date;
- (ii) an Allowance Purchase Price;
- (iii) the Allowance Type (and Specified Compliance Period); and
- (iv) the Number of Allowances,
the relevant EU Emissions Allowance Transaction will consist of a number of EU Emissions Allowance Transactions: each corresponding with one of the specified Delivery Dates, and having the Payment Date, Allowance Purchase Price, Allowance Type (and Specified Compliance Period) and Number of Allowances specified in that Confirmation for that Delivery Date.
(d) Terms
For each EU Emissions Allowance Transaction:
(d)(i) Physical Settlement
(d)(i)(1) Settlement
- (A) Allowance Forward Transactions: on the Payment Date, Buyer must pay to Seller the Allowance Purchase Price multiplied by the Number of Allowances and on the Delivery Date Seller must deliver to Buyer the Allowances to be Delivered and Buyer must accept the Allowances to be Delivered.
- (B) Allowance Option Transactions: for each Exercise Date, on the relevant Payment Date Receiving Party must pay to Delivering Party the Allowance Strike Price multiplied by the Number of Allowances to be Delivered and on the relevant Delivery Date Delivering Party must deliver to Receiving Party the Allowances to be Delivered, and Receiving Party must accept the Allowances to be Delivered.
- (A) Any obligation of Delivering Party to deliver Allowances under an EU Emissions Allowance Transaction may be discharged by the completed transfer of those Allowances from a Holding Account of Delivering Party under the Scheme. A transfer will be completed when the relevant Allowances are received at the relevant Specified Holding Account of Receiving Party, whereupon risk of loss of Allowances transfers from Delivering Party to Receiving Party.
- (B) Notwithstanding Part (d)(i)(2)(A) above, if Delivering Party has any Specified Holding Accounts for the relevant EU Emissions Allowance Transaction, Delivering Party’s obligation to deliver Allowances under an EU Emissions Allowance Transaction shall be limited to an obligation to deliver from any such Specified Holding Account of Delivering Party to the relevant Specified Holding Account of Receiving Party.
- (C) Where Receiving Party has more than one Specified Holding Account for an EU Emissions Allowance Transaction, such Specified Holding Accounts are set out in order of preference. Delivering Party must deliver the Allowances to be Delivered to the first listed Specified Holding Account of Receiving Party on the Delivery Date unless, for such Receiving Party’s Specified Holding Account, it is prevented from so doing by an event or circumstance that would be a Settlement Disruption Event or a Suspension Event if the first listed Specified Holding Account of Receiving Party were the only Specified Holding Account so listed. In such circumstances, this paragraph will apply iteratively to the next listed Receiving Party’s Specified Holding Account (if any).
- (D) If a transfer of Allowances is completed after 4:00 p.m., Central European Time, on a Delivery Business Day or at any time on any day other than a Delivery Business Day, then those Allowances will be deemed to have been delivered at 10:00 a.m., Central European Time, on the next following Delivery Business Day. If a transfer of Allowances is completed before 10:00 a.m., Central European Time, on a Delivery Business Day, then those Allowances will be deemed to have been delivered at 10:00 a.m., Central European Time, on that day.
(d)(i)(3) Netting: If on any date Allowances of the same Allowance Type and Specified Compliance Period would otherwise be deliverable for two or more EU Emissions Allowance Transactions by each party to the other and, if applicable, between the same pair of Holding Accounts of the parties, then, on such date, each party’s obligation to make delivery of any such Allowances will be automatically satisfied and discharged and, if the aggregate amount of Allowances that would otherwise have been deliverable by one party exceeds the aggregate amount of Allowances that would otherwise have been deliverable by the other party, replaced by an obligation upon the party by which the larger aggregate amount would have been deliverable to deliver to the other party the excess of the larger aggregate amount over the smaller aggregate amount.
(d)(iii) Partial Settlement
If, on the Delivery Date, Delivering Party delivers to Receiving Party fewer Allowances than the Allowances to be Delivered (such shortfall the “Allowance Shortfall”), Receiving Party’s obligation to pay under Physical Settlement above shall be reduced by the Allowance Shortfall multiplied by either the Allowance Purchase Price (for an Allowance Forward Transaction) or the Allowance Strike Price (for an Allowance Option Transaction), and “Failure to Deliver” above will apply for the Allowance Shortfall (with references to Number of Allowances (in the case of an Allowance Forward Transaction) and Allowances to be Delivered (in the case of an Allowance Option Transaction) being read as references to the Allowance Shortfall).
(d)(iv) Abandonment of Scheme
(1) If before the Delivery Date the Scheme is, because of official written public pronouncement by the European Community, no longer scheduled to proceed or is to be discontinued, either party may, by written notice to the other party, terminate the relevant EU Emissions Allowance Transaction, in which case neither party shall have any further delivery or payment obligations under or for that EU Emissions Allowance Transaction (other than for any payment due by one party in connection with delivery obligations already performed by the other party) and, a payment shall not be due under Section 6(e) of the Agreement or otherwise for such termination.
(2) If there is a termination under sub-clause (1) Delivering Party must promptly refund to Receiving Party any amount that may have been paid by Receiving Party for the EU Emissions Allowance Transaction that is an Allowance Forward Transaction or a Call and Receiving Party must promptly refund to Delivering Party any amount that may have been paid by Delivering Party for an EU Emissions Allowance Transaction which is a Put together with interest on that amount in the same currency as that amount from the date that amount was paid until the date of termination of the EU Emissions Allowance Transaction under sub-clause (1), at the rate certified by the party required to refund the amount to be a rate offered to such party by a major bank in a relevant interbank market for overnight deposits in the applicable currency, such bank to be selected in good faith by that party for purposes of obtaining a representative rate that will reasonably reflect conditions prevailing at the time in the relevant market.
(d)(v) Invoicing
On or after the Delivery Date, Delivering Party shall send to Receiving Party a valid VAT invoice (applicable in the jurisdiction of supply) setting forth the number of Allowances delivered, or that would have been delivered but for Part(d)(i)(3)(Netting), above, and the Allowance Purchase Price(s) or Allowance Strike Price(s), as applicable, stating the total amount payable by Receiving Party and stating the amount of VAT, if any, properly chargeable thereon (a “VAT Invoice”).
(d)(vi) Requirements under the Scheme
Each party agrees with the other that, so long as either party has or may have any obligation under an EU Emissions Allowance Transaction, it shall:
- (1) ensure that on a Delivery Date or Delayed Delivery Date (as the case may be) it has any Holding Accounts validly registered under the Registries Regulation and where it has any Specified Holding Accounts, ensure that on a Delivery Date or Delayed Delivery Date (as the case may be) it has all such Specified Holding Accounts validly registered under the Registries Regulation ;
- (2) where it is Delivering Party, ensure that each Specified Holding Account of Receiving Party is nominated as a “trusted account” in its “trusted account list” for each of its Specified Holding Accounts (or other Holding Accounts, as applicable) for the purposes of the Registries Regulation; and
- (3) conduct its affairs so as not to give any Relevant Authority cause to block, suspend, refuse, reject or cancel the transfer (whether in whole or in part) of Allowances requested to be made under any EU Emissions Allowance Transaction.
for each delivery of Allowances, Delivering Party must deliver Allowances, free and clear of all liens, security interests, claims and encumbrances or any interest in or to them by any person (the “No Encumbrance Obligation”). Where a party is in breach of the No Encumbrance Obligation, the following shall apply:
- (1) This Agreement and all other Transactions agreed by the parties under this Agreement shall continue unaffected.
- (2) Without prejudice to any defences available to Delivering Party, following written notice of that breach from Receiving Party to Delivering Party (irrespective of how long after the relevant Delivery Date such notice is provided) and subject to Part (d)(vii)(4) below, Receiving Party shall:
- (A) determine the Encumbrance Loss Amount arising from that breach either on the date such notice is deemed to be received or as soon as reasonably practicable thereafter; and
- (B) shall notify Delivering Party of such Encumbrance Loss Amount due, including detailed support for its calculation.
Receiving Party is not required to enter into replacement transactions in order to determine the Encumbrance Loss Amount.
- (3) By no later than the third (3rd) Business Day after the later of (i) receipt of a valid invoice in connection with such Encumbrance Loss Amount and (ii) receipt of the above-mentioned notice including detailed support of Receiving Party’s calculation of the Encumbrance Loss Amount, Delivering Party must pay the Encumbrance Loss Amount to Receiving Party, which amount shall bear interest at the Default Rate. Upon payment of the Encumbrance Loss Amount by Delivering Party, the parties shall have no further obligations for that EU Emissions Allowance Transaction and that breach. Receiving Party acknowledges that its exclusive remedies for such breach are those set out in this Annex(d)(vii)(No Encumbrances).
- (4) Where a breach of the No Encumbrances Obligation is caused by the transfer of an Affected Allowance, Delivering Party shall be liable for the Encumbrance Loss Amount if, at the date it first acquired, received or purchased such Affected Allowance, it was not acting in good faith; otherwise, Delivering Party shall only be liable for the Encumbrance Loss Amount (without prejudice to any other defences available to Delivering Party including, but not limited to, any defences of statutes of limitation or similar), if:
- (A) Receiving Party, whether or not the holder of such Affected Allowance, who is subject to a claim of the Original Affected Party, has, in order to resist or avoid any Encumbrance Loss Amount from arising, used its best endeavours to defend such a claim for that Affected Allowance and was unsuccessful (other than for reasons of its own lack of good faith); or
- (B) Receiving Party, whether or not the holder of such Affected Allowance, who acted in good faith for its purchase of such Affected Allowance and who is subject to a claim of a third party (other than the Original Affected Party) for that Affected Allowance, has used all reasonable endeavours to mitigate the Encumbrance Loss Amount.
- (1) All amounts referred to in this Annex or in a Confirmation for an EU Emissions Allowance Transaction are exclusive of any applicable Value Added Taxes (“VAT”) which are or may become chargeable for the supply or supplies for which such sums form the whole or part of the consideration for VAT purposes, and any such VAT shall be payable in addition to any such other consideration under the provisions set out below.
- (2) Receiving Party shall either (A) subject to receipt of an appropriate VAT Invoice for such supply or supplies stating inter alia the amount of VAT properly chargeable thereon (the “VAT Amount”), pay to Delivering Party a sum equal to the VAT Amount on the Payment Date; or (B) where, under the applicable VAT legislation, Receiving Party is required to self-assess and account for any VAT chargeable for such supply, account for such VAT.
- (3) On each date on which an EU Emissions Allowance Transaction is entered into, Receiving Party represents to Delivering Party that:
- (A) for VAT purposes, Receiving Party receives the services supplied under the EU Emissions Allowance Transaction in connection with an establishment of Receiving Party in that party’s VAT Jurisdiction; and
- (B) it is a taxable person for the purposes of Article 9 of the European Community Directive 2006/112/EC and receives such supply for the purposes of a business carried on by it.
- (4) Subject to each party’s obligations relating to VAT, each party shall cause all royalties, Taxes, duties, and other sums (including any environmental tax or levy) legally payable by that party arising in connection with an EU Emissions Allowance Transaction to be paid, and shall reimburse the other party to the extent that party is required to pay any such royalties, Taxes, duties or other sums for which the first party is primarily liable.
(d)(ix) No Consequential Loss
Except to the extent included in any amount payable under Section 6(e) of the Agreement, any payment for Receiving Party’s Replacement Cost or Delivering Party’s Replacement Cost, or any payment for Encumbrance Loss Amount, neither party is liable to the other, whether in contract, tort (including negligence and breach of duty) or otherwise, for any business interruption or loss of use, profits, contracts, production or revenue or for any consequential or indirect loss or damage of any kind however arising.
(d)(x) Other Fees and Expenses
All costs, fees and charges assessed or imposed by a Relevant Authority in connection with the transfer of Allowances under an EU Emissions Allowance Transaction shall be the responsibility of the party upon whom such costs, fees or charges are allocated by the Relevant Authority.
(d)(xi) Failure to Deliver (Alternative Method) - EEP Applicable
If “Failure to Deliver (Alternative Method)” and “EEP” are specified to be applicable in the Annex to this Annex or the Confirmation for the relevant EU Emissions Allowance Transaction, then, with regard to that EU Emissions Allowance Transaction, if Receiving Party incurs an Excess Emissions Penalty directly caused by Delivering Party’s failure to deliver the Allowances to be Delivered on a Delivery Date falling within the EEP Risk Period other than because of the failure of Receiving Party to comply with the Requirements under the Scheme as specified above, the existence of an Illegality, the existence of a Settlement Disruption Event or the existence of a Suspension Event (the “EEP Non-delivery” and the amount of such Excess Emissions Penalty so caused, the “Indemnifiable EEP”), then Delivering Party must pay to Receiving Party, in addition to the Receiving Party’s Replacement Cost (if any), the amount of the Indemnifiable EEP paid by Receiving Party (the “EEP Payment”), provided that such EEP Payment shall not exceed the product of the RPRC Shortfall for that EU Emissions Allowance Transaction and the maximum per Allowance rate of Excess Emissions Penalty applicable at the relevant time.
Delivering Party’s obligation to pay the EEP Payment for the EEP Non-delivery shall be conditional upon Receiving Party demonstrating to the reasonable satisfaction of Delivering Party:
- (a) that Receiving Party has incurred and paid the EEP Payment consequent on a shortfall of Allowances as at the Reconciliation Deadline immediately succeeding the Delivery Date (the “Deadline Shortfall”);
- (b) the extent to which Receiving Party’s liability to make the EEP Payment resulted from Delivering Party’s EEP Non-delivery;
- (c) the extent to which Receiving Party’s liability to make the EEP Payment would have been incurred notwithstanding Delivering Party’s EEP Non-delivery; and
- (d) the extent to which Receiving Party’s liability to make the EEP Payment arose due to any third party’s failure(s) to deliver any Allowance to be Delivered to Receiving Party under the terms of any agreements between Receiving Party and such third party.
Receiving Party agrees to provide all other information to Delivering Party in order for Delivering Party to make a commercially reasonable assessment of the extent to which the Deadline Shortfall was directly caused by its EEP Non-delivery.
If the Deadline Shortfall is directly caused by the failure of a number of parties (including Delivering Party and Receiving Party), then Delivering Party’s liability shall be to pay the EEP Payment for its proportionate share of the Deadline Shortfall as determined by the parties in a commercially reasonable manner. In no circumstances shall Receiving Party seek to claim an EEP Payment from Delivering Party such that when aggregated with all the other claims made by Receiving Party to other parties for its liability to make the EEP Payment and the liability caused by Receiving Party’s own action or inaction, it is more than Receiving Party’s liability to make the EEP Payment.
If Delivering Party disputes in good faith the amount of the EEP Payment claimed by Receiving Party, Delivering Party shall so notify Receiving Party stating the reasons for the dispute and the obligation to pay the EEP Payment shall be suspended until such dispute is resolved. The parties shall seek to settle the dispute regarding the EEP Payment as soon as reasonably possible.
Once the amount of the EEP Payment is agreed or any dispute in relation thereto resolved, Delivering Party must pay such determined EEP Payment to Receiving Party within two (2) Business Days against Receiving Party’s VAT Invoice in respect thereof.
(d)(xii) Specified Holding Accounts and Modifications of Party’s Specified Holding Accounts
Each party agrees with the other, so long as either party has or may have any obligation under an EU Emissions Allowance Transaction, as follows:
- (1) for Receiving Party:
- (A) Receiving Party shall ensure that any of such Holding Accounts registered under Part (d)(vi)(Requirements under the Scheme) above are specified in the Annex to this Annex or in the relevant Confirmation; and
- (B) Receiving Party may from time to time (a) amend the order in which its Specified Holding Accounts are listed, (b) add a new Specified Holding Account as the last on the list of Specified Holding Accounts, or (c) remove a Specified Holding Account from those listed, in each case for an EU Emissions Allowance Transaction, provided that it notifies Delivering Party in writing of such amendment, addition or removal (including the provision of the relevant account details) no less than thirty (30) calendar days prior to the next Delivery Date under that EU Emissions Allowance Transaction, and provided further that in the case of (a) and / or (c), Delivering Party notifies Receiving Party in writing that it consents to such changes within five (5) Delivery Business Days of receiving such notice from Receiving Party;
- (2) for Delivering Party:
- (A) Delivering Party may specify any of such Holding Accounts registered under Part 7 (d)(vi)(Requirements under the Scheme) above in the Annex to this Annex or in the relevant Confirmation; and
- (B) Delivering Party may from time to time, add a new Holding Account or an additional Holding Account to those listed in the Annex to this Annex or in the relevant Confirmation provided that it notifies Receiving Party in writing of such addition (including the relevant account details) by the day that is ten (10) Delivery Business Days before the next Delivery Date under that EU Emissions Allowance Transaction.
(e) Defined Terms and Interpretation
AEUA or AEU Allowance: Means an “allowance” as defined in the Directive and which is issued under Chapter II thereof.
Affected Allowance: Means an Allowance which is or is alleged to have been the subject of an Unauthorised Transfer as confirmed by an Appropriate Source.
Aircraft Operator: Means an “aircraft operator” as defined in the Directive.
Allowance: Means an allowance to emit one tonne of carbon dioxide (CO2) equivalent during a specified period which is valid for meeting emissions related commitment obligations under the Scheme and which is of the specified Allowance Type and relates to the Specified Compliance Period.
Allowance Forward Transaction means an EU Emissions Allowance Transaction identified as an Allowance Forward Transaction in the related Confirmation.
Allowance Option Transaction: Means an EU Emissions Allowance Transaction identified as an Allowance Option Transaction in the related Confirmation. An Allowance Option Transaction shall be an Option Transaction for purposes of the 2006 ISDA Definitions.
Allowances to be Delivered: Means, for an EU Emissions Allowance Transaction that is:
- (1) an Allowance Forward Transaction, a number of Allowances equal to the Number of Allowances; or
- (2) an Allowance Option Transaction and for an Exercise Date, a number of Allowances equal to the number of Options exercised or deemed exercised on that Exercise Date multiplied by the Option Entitlement.
Allowance Purchase Price: Means, for an EU Emissions Allowance Transaction which is an Allowance Forward Transaction, the amount specified in the related Confirmation.
Allowance Shortfallis defined in (d)(iii) (Partial Settlement).
Allowance Type: Means an AEU Allowance or an EU Allowance as specified.
Appropriate Source: Means any “competent authority” (as defined in the Registries Regulation) or the Central Administrator, National Administrator or any other authority having power under the Directive or the Registries Regulation to block, suspend, refuse, reject, cancel or otherwise affect the transfer (whether in whole or in part) of Allowances, any recognised law enforcement or tax authorities of a Member State, the European Anti-fraud Office of the European Commission or Europol.
Buyer: Means the party specified as such in the related Confirmation.
Buy-In: Means the purchase of Allowances by Receiving Party under the procedures described in paragraph (2) of the definition of Receiving Party’s Replacement Cost in this Annex (e) (Defined Terms and Interpretation).
Buy-In Period is defined inthe definition of Receiving Party’s Replacement Cost in this Annex (e) (Defined Terms and Interpretation).
Calculation Agent: Means the party specified as such in the related Confirmation.
Call: Means a type of an Allowance Option Transaction entitling, but not obligating, Buyer to purchase Allowances from Seller at the Allowance Strike Price per Allowance.
Central Administrator: Means the person designated by the EU Commission to operate and maintain the EUTL under Article 20(1) of the Directive.
Central European Time: Means Central European Time, including Central European Winter Time and Central European Summer Time as applicable.
Close-out Cost of Carry Amount: Means an amount in EUR equal to: (a) the Close-out Cost of Carry Rate; multiplied by: (b)(i) for an Allowance Forward Transaction, the Allowance Purchase Price; or (ii) for an Allowance Option Transaction, the Allowance Strike Price; multiplied by: (c) the Close-out Cost of Carry Delay, divided by (d) 360.
Close-out Cost of Carry Delay: Means the number of days in the period from (and including) the scheduled Payment Date until the date that would be the Payment Date if delivery had been made on the Final Delivery Date or Final Compliance Date (as the case may be).
Close-out Cost of Carry Rate: Means a rate equal to the Floating Rate that would be determined for the period from the scheduled Payment Date to the Early Termination Date, if the Reset Date were the date that would be the Payment Date if delivery had been made on the Final Delivery Date or Final Compliance Date (as the case may be) and the applicable Floating Rate Option were “EUR-EONIA-OIS-COMPOUND”.
Cost of Carry Delay: Means the number of days in the period from (and including) the scheduled Payment Date until the Delayed Payment Date.
Cost of Carry Rate: Means a rate equal to the Floating Rate that would be determined for a Calculation Period commencing on (and including) the scheduled Payment Date and ending on (but excluding) the Delayed Payment Date, if the Reset Date were the last day of that Calculation Period and the applicable Floating Rate Option were “EUR-EONIA-OIS-COMPOUND”.
Deadline Shortfallis defined in (d)(xi) (Failure to Deliver (Alternative Method) – EEP Applicable).
Delayed Delivery Date: Has the meaning given to that term in Part (d)(i)(5)(B) (Effect of a Suspension Event).
Delayed Payment Date: Has the meaning given to that term in the definition of Payment Date in this (e) (Defined Terms and Interpretation).
Delivering Party: Means, for an EU Emissions Allowance Transaction that is:
- (1) an Allowance Forward Transaction, the Seller;
- (2) an Allowance Option Transaction which is a Call, the Seller; or
- (3) an Allowance Option Transaction which is a Put, the Buyer.
Delivering Party’s Delivery Business Day Location: Means the place specified as such in the Confirmation for the relevant EU Emissions Allowance Transaction or, if a place is not so specified:
- (i) the place specified in the Annex to this Annex as the Delivery Business Day Location for Delivering Party; or
- (ii) if no such place is specified, the place in which Seller’s address for purposes of receiving notices connected with the relevant EU Emissions Allowance Transaction is located; or
- (iii) if no such address has been given, the place in which Delivering Party has its registered office.
Delivery Business Day: Means any day, which is not a Saturday or Sunday, on which commercial banks are open for general business in both Delivering Party’s Delivery Business Day Location and the Receiving Party’s Delivery Business Day Location.
Delivery Date: Means the date or dates specified as such in the related Confirmation (subject to any adjustment under Part (d)(i)(5) (Suspension Event)).
Directive: Means Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC, as amended from time to time.
DPRC Shortfall is defined inthe definition of Delivering Party’s Replacement Cost in this Annex (e) (Defined Terms and Interpretation).
EEP Non-deliveryis defined in (d)(xi) (Failure to Deliver (Alternative Method) – EEP Applicable).
EEP Paymentis defined in (d)(xi) (Failure to Deliver (Alternative Method) – EEP Applicable).
EEP Risk Period: Means, for an EU Emissions Allowance Transaction and any Delivery Date, a period of time prior to the first succeeding Reconciliation Deadline, as specified in the related Confirmation.
Encumbrance Loss Amount: An amount reasonably determined by Receiving Party in good faith to be its total losses and costs in connection with an EU Emissions Allowance Transaction including, but not limited to, any loss of bargain, cost of funding or, at the election of Receiving Party but without duplication, loss or costs incurred because of its terminating, liquidating, obtaining or re-establishing any hedge or related trading position. Such amount includes losses and costs for any payment already made under an EU Emissions Allowance Transaction prior to the delivery of the written notice by Receiving Party and Receiving Party’s legal fees and out-of-pocket expenses but does not include Excess Emissions Penalty or any amount which Receiving Party must pay to a third party for any such penalty payable to any other party (or Relevant Authority) by that third party. The parties agree that in circumstances where there was a breach of the No Encumbrances Obligation by Delivering Party caused by the transfer of an Affected Allowance, Receiving Party shall be entitled to include in such amount any losses arising out of or in connection with any claim, demand, action or proceeding brought against Receiving Party by a third party consequent upon the transfer by Receiving Party of an Affected Allowance transferred to it by Delivering Party under an EU Emissions Allowance Transaction.
End of Phase Reconciliation Deadline: Means the Reconciliation Deadline scheduled to fall in April 2031.
EU: Means the European Community as it exists from time to time.
EU Allowance: Means an allowance, other than an AEUA or AEU Allowance, created under the Directive, including allowances stemming from emission trading systems that are linked with the EU ETS under Article 25 of the Directive.
EUTL or European Transaction Log: Means the independent transaction log provided for in Article 20(1) of the Directive, the operation of which is further detailed in Article 6 of the Registries Regulation.
Excess Emissions Penalty/EEP: Has the meaning given to it in the Directive.
Expiration Date: Means, for an EU Emissions Allowance Transaction which is an Allowance Option Transaction, the date specified as such in the related Confirmation (or determined under a method specified for such purpose) or, if that date is not a Business Day, the next following day that is a Business Day.
Final Compliance Date: Means, the date that is the second Delivery Business Day after notice is given under Part (d)(ii)(2) (Failure to Comply byReceiving Party) requiring Receiving Party to comply with Part (d)(vi) (Requirements under the Scheme) or, if earlier, the Reconciliation Deadline on or immediately following the relevant Delivery Date.
Final Delivery Date: Means, the date that is the second Delivery Business Day after notice is given under Part (d)(ii)(1) (Failure to Deliver by Delivering Party) requiring Delivering Party to remedy a failure to deliver or, if earlier, the Reconciliation Deadline on or immediately following the relevant Delivery Date.
Fourth Compliance Period: Means the period starting 1 January 2021 to 31 December 2030.
Holding Account: Means a form of digital record maintained in a Registry (under and under the Registries Regulation) that is able to be used to record the allocation (if applicable), holding and transfer of Allowances of the Allowance Type that is to be delivered under the relevant EU Emissions Allowance Transaction under and under the Scheme.
Indemnifiable EEPis defined in (d)(xi) (Failure to Deliver (Alternative Method) – EEP Applicable).
Long-Stop Date: Means, for a Suspension Event that occurs with respect to a delivery or acceptance obligation that would otherwise be required to be performed within the period:
- (1) from (and including) 1 May 2021 to (and including) 31 December 2022, 1 June 2024 ;
- (2) from (and including) 1 January 2023 to (and including) 31 December 2024, 1 June 2026;
- (3) from (and including) 1 January 2025 to (and including) 31 December 2026, 1 June 2028 ;
- (4) from (and including) 1 January 2027 to (and including) 31 December 2028, it shall be 1 June 2030; and
- (5) from (and including) 1 January 2029 to (and including) the twenty-fifth (25th) calendar day of the month in which the End of Phase Reconciliation Deadline is scheduled to occur, the twenty-fifth (25th) calendar day of the month in which the End of Phase Reconciliation Deadline is scheduled to occur.
Member State: Means any one of the signatories of the European Union from time to time.
Multiple Exercise: Means:
- (1) If “Multiple Exercise” applies to an American Allowance Option Transaction or a Bermuda Allowance Option Transaction, Buyer may exercise all or less than all the unexercised Options on any Business Days during the Exercise Period but (except as set forth below) on any such Business Day may not exercise less than the Minimum Number of Options or more than the Maximum Number of Options and, if a number is specified as “Integral Multiple” in the related Confirmation, the number of exercised Options must be equal to, or be an integral multiple of, the number so specified. Except as set forth below, any attempt to exercise on any such Business Day:
- (A) more than the Maximum Number of Options will be deemed to be an exercise of the Maximum Number of Options (the number of Options exceeding the Maximum Number of Options being deemed to remain unexercised);
- (B) less than the Minimum Number of Options will be ineffective; and
- (C) an amount of Options not equal to or an integral multiple of the Integral Multiple will be deemed to be an exercise of a number of Options equal to the next lowest integral multiple of the Integral Multiple (the number of Options exceeding that number being deemed to remain unexercised).
- (2) Notwithstanding the foregoing, on any such Business Day, Buyer may exercise any number of Options that does not exceed the Maximum Number of Options if it exercises all the Options remaining unexercised. On the Expiration Date, Buyer may exercise any number of Options remaining unexercised.
- (3) “Minimum Number of Options” means, for an Allowance Option Transaction to which Multiple Exercise is applicable, the number specified as such in the related Confirmation.
- (4) “Maximum Number of Options” means, for an Allowance Option Transaction to which Multiple Exercise is applicable, the number specified as such in the related Confirmation.
National Administrator: Means the entity responsible for managing, on behalf of a Member State, a set of user accounts under the jurisdiction of a Member State in the Union Registry as designated under Article 8 of the Registries Regulation.
No Encumbrance Obligationis defined in (d)(vii) (No Encumbrances).
Notice of Exercise: Means, for an EU Emissions Allowance Transaction which is an Allowance Option Transaction, an Option notice given by Buyer to Seller (which may be given orally (including by telephone) unless the parties specify otherwise in the related Confirmation) of its exercise of the right or rights granted under the Allowance Option Transaction during the hours specified in the relevant Confirmation on a Seller Business Day during the Exercise Period, which shall be irrevocable once effective. If the Notice of Exercise is received on any Seller Business Day after the latest time so specified, the Notice of Exercise will be deemed to have been received on the next following Seller Business Day, if any, in the Exercise Period. Buyer may exercise the right or rights granted under the Allowance Option Transaction only by giving a Notice of Exercise.
Number of Allowances: Means the number specified as such in the related Confirmation.
Number of Options: Means, for an EU Emissions Allowance Transaction which is an Allowance Option Transaction, the number specified as such in the related Confirmation, being the number of Options comprised in the relevant Allowance Option Transaction.
Operator: Means an “operator” as defined in the Directive.
Option: Means, for an Allowance Option Transaction, each unit into which the Option Transaction is divided for purposes of exercise or settlement.
Option Entitlement: Means, for an EU Emissions Allowance Transaction which is an Allowance Option Transaction, the number of Allowances per Option specified as such in the related Confirmation. If no Option Entitlement is specified, the Option Entitlement for any Allowance Option Transaction shall be one Allowance per Option.
Original Affected Party: Means the person from whose account the Unauthorised Transfer of the Affected Allowance occurred.
Payment Date: Means the date specified as such or otherwise determined under a method specified, provided that, in the case of delayed delivery under Part(d)(i)(5)(Suspension Event), the Payment Date shall be determined accordingly from the Delayed Delivery Date (such Payment Date being the “Delayed Payment Date”).
Potential Exercise Date: Means, for an EU Emissions Allowance Transaction which is a Bermuda Allowance Option Transaction, each date specified as such in the related Confirmation or, if that date is not a Business Day, the next following day that is a Business Day.
Premium: Means, for an EU Emissions Allowance Transaction which is an Allowance Option Transaction, the amount specified in the related Confirmation. If a Premium per Allowance is specified, the Premium shall be the product of the Premium per Allowance, the Number of Options and the Option Entitlement.
Put: Means a type of Allowance Option Transaction entitling, but not obligating, the Buyer to sell Allowances to Seller at the Allowance Strike Price per Allowance.
Receiving Party: Means, for an EU Emissions Allowance Transaction that is:
- (1) an Allowance Forward Transaction, the Buyer;
- (2) an Allowance Option Transaction which is a Call, the Buyer; or
- (3) an Allowance Option Transaction which is a Put, the Seller.
Receiving Party’s Delivery Business Day Location: Means the place specified as such in the Confirmation for the relevant EU Emissions Allowance Transaction or, if a place is not so specified:
- (i) the place specified in the Annex to this Annex as the Delivery Business Day Location for Receiving Party; or
- (ii) if no such place is specified, the place in which Receiving Party’s address for purposes of receiving notices connected with the relevant EU Emissions Allowance Transaction is located; or
- (iii) if no such address has been given, the place in which Receiving Party has its registered office.
Reconciliation Deadline: Means 30th April in each calendar year for the preceding calendar year or such later date in each year as may be determined under the Scheme for the surrender of Allowances under the Scheme.
Registries Regulation: Means the Commission Regulation (EU) no. 389/2013 of 2 May 2013 establishing a Union Registry under the Directive 2003/87/EC of the European Parliament and of the Council, Decisions No.280/2004/EC and No. 406/2009/EC of the European Parliament and of the Council and repealing Commission Regulation (EU) No. 920/2010 and No. 1193/2011, as amended from time to time.
Registry: Means the registry established by a Member State, a non-Member State or the EU, under the International Rules, in order to ensure the accurate accounting of the issue, holding, transfer, acquisition, surrender, cancellation and replacement of Allowances.
Registry Operation: Means, other than by reason of the occurrence of an Administrator Event:
- (a) the establishment of and continuing functioning of the Relevant Registry;
- (b) the establishment of and continuing functioning of the EUTL; or
- (c) the establishment of and continuing functioning of the link between each of the Relevant Registry and the EUTL.
Relevant Authority: Means any authority having power under the Directive or the Registries Regulation to administer the Scheme, including the Central Administrator and each National Administrator as those terms are defined in the Registries Regulation.
Relevant Registry: Means the Registry through which a party is obliged to perform a delivery or acceptance obligation under an EU Emissions Allowance Transaction. Where a party has specified more than one Specified Holding Account for delivery or acceptance purposes, the Relevant Registry shall be identified under Part (d)(i)(2)(C).
RPRC Shortfall is defined inthe definition of Receiving Party’s Replacement Cost in this Annex (e) (Defined Terms and Interpretation).
Seller: Means the party specified as such in the related Confirmation.
Seller Business Day: Means, for an EU Emissions Allowance Transaction which is an Allowance Option Transaction, any day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the city in which Seller is located for purposes of receiving notices.
Shortfall is defined inthe definition of Receiving Party’s Replacement Cost in this Annex (e) (Defined Terms and Interpretation).
Specified Holding Account: Means, for a party and an EU Emissions Allowance Transaction, the Holding Accounts (if any) specified as such for such party (i) in the Confirmation for the relevant EU Emissions Allowance Transaction; or (ii) where no such accounts are specified under (i), in the Annex to this Annex; in either case under Part (d)(xii)(1)(A) or Part (d)(xii)(2)(A) (as applicable) and subject to modification under Part (d)(xii)(1)(B) and Part (d)(xii)(2)(B).
Trade Date:will be specified in the Confirmation.
Third Compliance Period: Means the period referred to in Article 16 of the Directive 2009/29/EC starting 1 January 2013 to 31 December 2020.
Unauthorised Transfer: Means the transfer by debiting of any Allowance from an account holder’s Holding Account and the crediting of a Holding Account of another person, where such transfer is not initiated by the relevant authorised representative or additional authorised representative (as referred to in the Registries Regulation) of the first account holder.
Undelivered Allowances is defined in the definition of Receiving Party’s Replacement Cost in this Annex (e) (Defined Terms and Interpretation).
Union Registry: Means the Registry referred to as the “Community Registry” in Article 19(1) of the Directive.
VATis defined in (d)(viii) (Value Added Taxes).
VAT Amountis defined in (d)(viii) (Value Added Taxes).
VAT Invoiceis defined in (d)(viii) (Value Added Taxes).
VAT Jurisdiction: Means, for a party and an EU Emissions Allowance Transaction, the place specified as such in the related Confirmation or, if a place is not so specified, the place specified in the Annex to this Annex as the VAT Jurisdiction for such party.
Written Confirmation: Means, for a party and an EU Emissions Allowance Transaction which is an Allowance Option Transaction, if “Written Confirmation” applies or if demanded by Seller (which demand, notwithstanding any provisions regarding notice applicable to the Allowance Option Transaction, may be given orally (including by telephone)), Buyer shall execute a written confirmation (including by facsimile transmission) confirming the substance of the Notice of Exercise and deliver the same to Seller. Buyer shall cause such executed written confirmation to be received by Seller within one Seller Business Day following the date that the Notice of Exercise or Seller’s demand, as the case may be, becomes effective.