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Scrap industry readies for change

The Scrap Metal Dealers Act receiving royal assent is a significant milestone for the industry and positive news after an intensive campaign to bring licensing up to date in the fight against metal theft.

The implementation of the new Act in October across England and Wales will eradicate some of the issues brought about by the introduction of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act late last year.

From 3 December 2012, the LASPO Act made it an offence for anyone to buy scrap metal for cash or by any form of payment other than a crossed cheque or electronic money transfer under the existing Scrap Metal Dealers Act of 1964. This applies to traditional scrap yards as well as 99% of itinerant collectors who go from house to house collecting waste materials including scrap metal.

However, some metal traders – such as motor vehicle salvage operators – are exempt which leaves an unfair playing field as many undoubtedly take their scrap to collectors who continue to pay cash. This exposes legitimate businesses to a drop in trade as well as potential job losses and closures whilst allowing criminal activity to continue.

The Scrap Metal Dealers Act will extend the ban on cash payments to all scrap metal dealers to bring an end to these exemptions and loopholes.

Under the new Act, a robust regulatory framework will be put into place which includes a more effective licensing regime for scrap metal dealers as well as increased powers to bring even more offenders to justice.

All scrap dealers must apply for a licence from local authorities to continue trading and will have to pay fee to cover the costs of this scheme. In addition, the Environment Agency will run a national, public register of scrap metal dealers and councils will be empowered to refuse, alter and revoke scrap metal dealers’ licences if the new regulations are not obeyed.

In order to improve transparency in the scrap metal trade, those who sell metal will have to produce verifiable identification which is recorded and kept for two years by the dealer. This means that the seller can be traced if the scrap metal is found to have been stolen.

The police and councils will be endowed with greater powers to bring unscrupulous traders who operate on the wrong side of the law and act as conduits for stolen metal to justice. Scrap metal dealers will face increased fines and sentences for breaking the law by trading in cash, being unlicensed or failing to record deals.

We now have six months in which to work in partnership with local authorities, the Environment Agency, the police and BMRA members to prepare and implement the new system. The police and councils must have the tools and processes in place to enforce the new rules in October and it’s equally imperative that everyone in the metals recycling industry is aware of the changes in order to follow them.

Elsewhere in the UK

Scotland is expected to hold a consultation on regulatory change in the near future which is likely to be implemented in 2015. The new regulations will be similar to those of the recently passed Scrap Metal Dealers Act but will focus on identification and licensing rather than a restriction on cash payments.

Meanwhile, the consultation process is due to start in Northern Ireland and the Republic of Ireland and the BMRA will be on hand to offer support and advice from its experience in England and Wales.

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