Review of issuance

Issuance is considered final 15 days after the receipt of a request for issuance, unless a review is requested:

The issuance shall be considered final 15 days after the date of receipt of the request for issuance, unless a Party involved in the project activity or at least three members of the Executive Board request a review of the proposed issuance of CERs (3/CMP.1, Annex, paragraph 65).

Therefore, a request for review may be initiated by the submission of a request for review to the Executive Board. The request for review must be:

Submitted within 15 days of the receipt of the request for issuance; and
Submitted by a Party involved in the project activity or at least three members of the Executive Board.

A request for review will result in the Executive Board assessing whether temporary certified emission reductions (tCERs) or long-term certified emission reductions (lCERs) should be issued in response to a request for issuance.

3/CMP.1, Annex, paragraph 65 sets out the parameters for a reviewing a request for issuance:

Such a review shall be limited to issues of fraud, malfeasance or incompetence of the designated operational entities and be conducted as follows:

Upon receipt of a request for such a review, the Executive Board, at its next meeting, shall decide on its course of action. If it decides that the request has merit it shall perform a review and decide whether the proposed issuance of CERs should be approved;

The Executive Board shall complete its review within 30 days following its decision to perform the review;

The Executive Board shall inform the project participants of the outcome of the review, and make public its decision regarding the approval of the proposed issuance of CERs and the reasons for it (3/CMP.1, Annex, paragraph 65).

These rules, contained in the modalities and procedures for large-scale non-afforestation and reforestation (A/R) projects, apply equally to A/R projects. References to CERs in the procedures below should be read as references to tCERs and lCERs in this context:

The issuance of tCERs or lCERs for afforestation and reforestation project activities under the CDM shall be subject to the provisions of paragraphs 65 and 66 of the CDM modalities and procedures, contained in the annex to decision 17/CP.7 (5/CMP.1, Annex, paragraph 37).

These rules apply to small-scale A/R (SSC A/R) projects by reason of their application to A/R projects:

The modalities and procedures for afforestation and reforestation project activities under the CDM shall apply to small-scale afforestation and reforestation project activities under the CDM except for paragraphs 12-30 (6/CMP.1, Annex, paragraph 3).

Process for a review of issuance

The procedure for a review of registration is set out in 4/CMP.1, Annex IV.

In accordance with 3/CMP.1, Annex, paragraph 5(o), the Executive Board has provided clarifications to facilitate the implementation of the procedure for reviews of issuance described in 4/CMP.1, Annex IV, by annotating those procedures. That decision provided that:

The Executive Board shall supervise the CDM, under the authority and guidance of the COP/MOP, and be fully accountable to the COP/MOP. In this context, the Executive Board shall:

Elaborate and recommend to the COP/MOP for adoption at its next session procedures for conducting the reviews referred to in paragraphs 41 and 65 below including, inter alia, procedures to facilitate consideration of information from Parties, stakeholders and UNFCCC accredited observers (3/CMP.1, Annex, paragraph 5(o)).

The latest clarifications are contained in EB 38, Annex 22 (which replaces earlier guidance in EB 29 Annex 16, EB 28 Annex 42, EB 27 Annex 16, EB 25 Annex 48, and EB 15 Annex 12). These procedures are described below.

Step 1: Request for review

The process of requesting a review is as follows (adapted from 4/CMP.1, Annex IV, paragraphs 4-9 and EB 39, Annex 22):

A request for review (with reasons) is made before 1700 GMT on the 15^th day after the request for issuance, using the CDM project activity registration review form (F-CDM-RR):
1. By a Party involved, through the relevant DNA to the Executive Board (through the secretariat) using official means of communication; or
2. By a member of the Executive Board, by notifying the Executive Board (through the secretariat). Reasons for requesting the review must be clearly stated, and if the issues are of a minor nature that could be corrected through additional clarifications and/or revised documentation, this should be indicated. If clarifications are requested, issuance will be 'on hold' until they are provided. Clarifications must be provided by project participants to the secretariat within 2 weeks of the notification. If the secretariat and the Chair of the Executive Board consider the clarifications adequate, CERs will be issued. If the Chair of the Executive Board deems the corrections not satisfactory the Executive Board will determine at its next meeting whether a full review should be conducted.
The secretariat confirms whether the correct documentation has been received, and if so, acknowledges the receipt of the request and forwards it to the Executive Board. The secretariat then prepares a summary note of the request for review and forwards it to the Executive Board.
Consideration of the review of issuance is included in the agenda for the next Executive Board meeting, unless the requests for review are received after the deadline for circulation of the meeting agenda (i.e. 3 weeks before the meeting), in which case they will be considered at the subsequent meeting.
The Executive Board notifies the project participants and the DOE that verified and certified the emission reductions from the PoA that a review has been requested. The deadline for submitting these comments is determined as follows. In general, the deadline is 2 weeks from receipt of the notification. If, on the date the notification is provided, there are less than 4 weeks until the next meeting, project participants can choose either to:
1. Submit the required clarifications or corrections on or before the date which is 2 weeks before the next meeting (although this will be a shorter timeframe than the usual 2-week deadline); or
2. Inform the secretariat within 1 week of receiving the notification that they wish to take the full 2 weeks to consider the request and submit the required clarifications or corrections, in which case the issuance will not be considered until the subsequent meeting.
The project participants, the designated operational entity (DOE) and other stakeholders are invited to attend the relevant meeting.
A Registration and Issuance (RIT) member prepares an appraisal in accordance with the procedure for appraising a request for issuance.
The secretariat (under the guidance of the Chair of the Executive Board) prepares a decision sheet for the consideration of the Executive Board.
The Executive Board may address questions to the project participants or the DOE during the meeting. A contact person for these questions must be nominated (in the case of project participants, in accordance with the modalities of communication).
The proposed issuance of CERs is marked 'under review' on the UNFCCC CDM website.

Step 2: Scope and modalities of review

The Executive Board considers at its next meeting whether to undertake a review of the proposed issuance of CERs:

The Executive Board shall consider, at its next meeting, a request for review, and shall decide either to perform a review of the proposed issuance of CERs, if there is sufficient evidence indicating a case of fraud, malfeasance or incompetence of the DOE, or to approve the issuance (4/CMP.1, Annex IV, paragraph 10).

If the Executive Board decides to undertake a review, it decides at the same meeting on the scope of the review and the composition of the review team:

If the Executive Board agrees to perform a review of the proposed issuance of CERs, it shall, at the same meeting, decide on:

The scope of the review relating to issues of fraud, malfeasance or incompetence of the DOE, based on the consideration in the request for review;

The composition of a review team. The review team shall consist of two Board members, who will be responsible for supervising the review, and, as appropriate, outside experts (4/CMP.1, Annex IV, paragraph 11).

These decisions are made publicly available, and project participants and the relevant DOE are notified:

The decision make by the Board on the scope of the review shall be made publicly available as part of the report of its meeting (4/CMP.1, Annex IV, paragraph 13).

A notification of the decision by the Executive Board shall be sent to the project participants and the DOE that verified the monitored reductions and certified the reductions achieved by the CDM project activity (4/CMP.1, Annex IV, paragraph 14).

Step 3: Review process

The review process is led by the review team, whose role is set out in 4/CMP.1, Annex IV, paragraph 12:

The review team, under the guidance of Board members responsible for supervising the review, shall provide inputs, prepare requests for clarification and further information to the DOE and project participants, and analyse information received during the review (4/CMP.1, Annex IV, paragraph 12).

The review team must send a detailed request for clarification to project participants within 1 week after being nominated by the Executive Board (EB 29, Annex 16, annotation to paragraph 16). Answers must be provided by the DOE and/or project participants to the secretariat within 5 working days, and these answers will then be sent to the review team:

Requests for clarification and further information may be sent to the DOE and the project participants. Answers shall be submitted to the review team, through the secretariat, within five working days after the receipt of the request for clarification. The secretariat shall acknowledge the receipt of the answers and forward them to the review team (4/CMP.1, Annex IV, paragraph 15).

The review team will make a recommendation, which must be forwarded to the Executive Board at least 1 week before the next meeting:

The recommendation by the review team shall be made available to the Board no later than one week before the next Board meeting (EB 38, Annex 22).

This replaces earlier guidance in the modalities and procedures which required the recommendations to be drafted by the Executive Board members supervising the review, and for these recommendations to be forwarded to the Executive Board at least two weeks before the next Board meeting:

The two Board members supervising the review shall be responsible for compiling inputs and comments and preparing the recommendation to be forwarded to the Executive Board via listserver (4/CMP.1, Annex IV, paragraph 16).

Step 4: Review decision

Taking into account the recommendations of the two Executive Board members responsible for the review, the Executive Board may take one of three actions:

Taking into consideration recommendations by the two Board members responsible for the review, the Board shall decide on whether:

To approve the proposed issuance of CERs;

To request the DOE to make corrections based on the findings from the review before approving the issuance of CERs[or]

To decline to approve the proposed issuance of CERs (4/CMP.1, Annex IV, paragraph 18).

This decision must be finalised no later than 30 days following a request for review (4/CMP.1, Annex IV, paragraph 17).

Once this decision is made, it is made public:

In accordance with paragraph 65 of teh CDM modalities and procedures, the Board shall inform the project participants of the outcome of the review, and make public its decision regarding the approval of the proposed issuance of CERs and the reasons for it (4/CMP.1, Annex IV, paragraph 19).

If corrections are requested and are provided by project participants within 12 weeks, the revised documentation will be checked by the Chair of the Executive Board and the secretariat. If the Chair considers that the corrections are adequate, CERs will be issued. If the Chair considers that the corrections should be assessed by the Board, this will take place at the next meeting, or if the revised documentation was received within 2 weeks of the next meeting, at the subsequent meeting. If the Board considers the corrections adequate, CERs wil be issued; otherwise, the request will be rejected (EB 38, Annex 22).

If, during the review, the Executive Board has identified any issues relating to the performance of the DOE, the Executive Board may decide to examine that DOE's activities more closely:

If the review indicates any issues relating to performance of the DOE, the Board shall consider whether to trigger a spot-check of the DOE, in accordance with the procedures for accrediting operational entities (4/CMP.1, Annex IV, paragraph 20).

To assist in determining whether to trigger a spot-check, the Executive Board maintains a tracking system to record the number of times each DOE is involved with a request for review (EB 38, Annex 22, annotation to paragraph 20).

Costs of review

The costs of reviewing issuance to a PoA are paid by the Executive Board, unless a project is rejected and the DOE is found to have engaged in fraud or misconduct or to have been incompetent:

If the Executive Board decides not to approve a proposed issuance of CERs and if a DOE is found to be in the situation of fraud, malfeasance or incompetence, the DOE shall reimburse the costs incurred as a result of the review. This provision is subject to review as experience accrues (4/CMP.1, Annex IV, paragraph 21).

Re-submission of rejected request for issuance

In cases where the reasons for rejection of a request for issuance of CERs can be addressed by means of a revised verification report, based on a revised monitoring report, the DOE may request to be permitted to submit a revised request for issuance of CERs for the same monitoring period covered by the rejection.

The Executive Board will consider such a request at the subsequent Executive Board meeting following that request in accordance with the procedures and decide on a case-by-case basis. In these cases the Executive Board will provide further guidance, as appropriate. If a revised request for issuance is also rejected it is not possible to resubmit the request for issuance of CERs for a third time (EB 28, paragraph 96).