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Regulated businesses

 

Metal Dealers and motor salvage operators

Contents

Introduction

Scrap metal dealers (E, W]

  Introduction
  Activities regulated

  Licensing system

  Enforcement

Northern Ireland

Scotland

 

Introduction

There is no UK wide regulation of metal dealers. This activity will almost certainly require an environmental permit however, subject to certain available exemptions which apply some scrap metal activities; see Environment and waste control.

In England and Wales, scrap metal dealers are regulated under the Scrap Metal Dealers Act 2013. For further information, search GOV.UK scrap dealer metal registration. The national register of licensed dealers may be accessed via http://epr.environment-agency.gov.uk/ePRInternet/SearchRegisters.aspx

In Scotland, a metal dealer’s licence is required for carrying on business as a metal dealer. Search GOV.UK for Metal dealer's licence (Scotland).

In Northern Ireland, the activities of dealing in metal are regulated under environmental regulations.

Scrap metal dealers in England and Wales

Introduction

In England and Wales, scrap metal dealers were formerly regulated under the Scrap Metal Dealers Act 1964. However, the growth of metal theft offences, driven by increased commodity costs, highlighted the ineffectiveness of the existing registration scheme in the 1964 Act which did not prevent the scrap metal industry being the central market for stolen metal.

In 2010/11, the Home Office estimated that there were 80,000-100,000 reported metal theft offences a year which cost the economy at least £220-£260m (Deloitte, 2011) and up to £777m per year (the Association of Chief Police Officers, 2010). The impact of metal theft was felt across the United Kingdom in a range of sectors, including national transport infrastructure, electricity and telecommunication links; street furniture; heritage buildings; memorials; and commercial and residential buildings.

It was widely considered that regulatory reform of the scrap metal sector was needed. Initial legislative steps to: prohibit cash payments for scrap metal; amend police powers of entry into unregistered scrap metal sites; and increase the existing financial penalties for offences in the Scrap Metal Dealers Act 1964 were contained in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 which amended the Scrap Metal Dealers Act 1964. These were brought into force in December 2012. The 1964 Act was replaced by the Scrap Metal Dealers Act 2013 which came into effect for most purposes on 1 October 2013.

[Sources: Scrap Metal Dealers Act 2013: Explanatory Notes]

Comment: the 2013 Act imposes much stricter requirements upon licensed scrap metal dealers. In particular:

* scrap metal may not be purchased for cash;

* the use of brief descriptions (albeit conforming to trade usage) of scrap metal purchased in records will not be sufficient, in contrast to the brief descriptions permitted by the court in Jenkins v A Cohen & Co Ltd [1971] 2 All ER 1384

Scrap metal activities regulated

A person may not carry on business as a scrap metal dealer unless authorised by a licence under the Scrap Metal Dealers Act 2013 (SMDA).  

Carrying on business as a scrap metal dealer”

A person is treated as carrying on business as a scrap metal dealer if he:

* carries on a business which consists wholly or partly in buying or selling scrap metal, whether or not the metal is sold in the form in which it was bought; or

* carries on business as a motor salvage operator (so far as that does not fall within the above).

A manufacturer of articles is not regarded as selling scrap metal if he sells scrap metal only as a by-product of manufacturing articles or as surplus materials not required for manufacturing.

A motor salvage operator is defined as a business which consists:

* wholly or partly in recovering salvageable parts from motor vehicles for re-use or sale and subsequently selling or otherwise disposing of the rest of the vehicle for scrap;

* wholly or mainly in buying written-off vehicles and subsequently repairing and reselling them.

Scrap metal includes any old, waste or discarded metal or metallic material, and any product, article or assembly which is made from or contains metal and is broken, worn out or regarded by its last holder as having reached the end of its useful life. However, excluded from this definition is gold, silver and   any alloy of which 2 per cent or more by weight is attributable to gold or silver.

[SMDA s. 21]

Licensing system

A scrap metal licence is issued by a local authority. A licence must be one of the following types:

(a) a site licence which authorises the licensee to carry on business at any site in the authority's area which is identified in the licence;

(b) a collector's licence which authorises the licensee to carry on business as a mobile collector in the authority's area.

A person may hold more than one licence issued by different local authorities, but may not hold more than one licence issued by any one authority.

[SMDA s. 2]

A ‘mobile collector’ is a person who:

* carries on business as a scrap metal dealer otherwise than at a site; and

* regularly engages, in the course of that business, in collecting waste materials and old, broken, worn out or defaced articles by means of visits from door to door.

Criteria for grant of licence

A local authority may not issue or renew a scrap metal licence unless it is satisfied that the applicant is a suitable person to carry on business as a scrap metal dealer. In determining whether the applicant is a suitable person, the authority may have regard to any information which it considers to be relevant, including in particular:

(a) whether the applicant or any site manager has been convicted of any relevant offence;

(b) whether the applicant or any site manager has been the subject of any relevant enforcement action, any previous refusal of an application for the issue or renewal of a scrap metal licence or a relevant environmental permit or registration and any previous revocation of a scrap metal licence (and the reasons for such action);

(c) whether the applicant has demonstrated that there will be in place adequate procedures to ensure that the provisions of the SDMA will be complied with.

Corresponding criteria apply to directors and partners if the business is carried on by a company or partnership.

If the applicant or any site manager has been convicted of a relevant offence, the authority may include in the licence one or both of the following conditions:

* that the dealer must not receive scrap metal except between 9 am and 5 pm on any day;

* that all scrap metal received must be kept in the form in which it is received for a specified period, not exceeding 72 hours, beginning with the time when it is received.

The Scrap Metal Dealers Act 2013 (Prescribed Relevant Offences and Relevant Enforcement Action) Regulations 2013, SI 2013/2258 specify the offences and actions which are relevant for this purpose.

[SMDA s. 3]

The Home Office has published statutory guidance to which a local authority must have regard when determining suitability for a scrap metal dealer’s licenceissued by the Secretary of State.

Duration of licence

A licence is valid for three years from the date of issue.

A licence holder must notify the local authority if there is any change in its name, sites or site manager.

[SDMA sched. 1]

Tacit consent: it would appear that most local authorities consider that tacit consent does not apply, although some do.

Revocation of licence and imposition of conditions

A local authority may revoke a scrap metal licence:

* if it is satisfied that the licensee does not carry on business at any of the sites identified in the licence or if it is satisfied that a site manager named in the licence does not act as site manager at any of the sites identified in the licence;

* if it is no longer satisfied that the licensee is a suitable person to carry on business as a scrap metal dealer.

[SMDA s. 4]

There is a right of appeal to the magistrates’ court against a decision of a local authority to refuse an application, impose conditions on a licence or to vary or revoke a licence.

[SMDA sched. 1]

Conduct of business by a licensed dealer

A scrap metal dealer who holds a site licence must display a copy of the licence at each site identified in the licence in a prominent place in an area accessible to the public.

A scrap metal dealer who holds a collector's licence must display a copy of the licence on any vehicle that is being used in the course of the dealer's business.

[SMDA s. 10

Verification of supplier's identity

A scrap metal dealer may not receive scrap metal from a person without verifying the person's full name and address. Verification must be by reference to documents, data or other information obtained from a reliable and independent source.

The Scrap Metal Dealers Act 2013 (Prescribed Documents and Information for Verification of Name and Address) Regulations 2013, SI 2013/2276 prescribe the documents which may be used for verification.

[SMDA s.11]

Paying for scrap metal

 A scrap metal dealer must pay for scrap metal only by a non-transferable cheque or by an electronic transfer of funds (authorised by credit or debit card or otherwise).

[SMDA s. 12]

Records: receipt of metal

A scrap metal dealer who receives any scrap metal in the course of the dealer's business must record the following information:

(a) the description of the metal, including its type (or types if mixed), form, condition, weight and any marks identifying previous owners or other distinguishing features;

(b) the date and time of its receipt;

(c) if the metal is delivered in or on a vehicle, the registration

(d) if the metal is received from a person, the full name and address of that person;

(e) if the dealer pays for the metal, the full name of the person who makes the payment acting for the dealer.

Identity of supplier: if the dealer receives the metal from a person, the dealer must keep a copy of any document which the dealer uses to verify the name or address of that person.

Payments: the dealer must keep a copy of the cheque used to pay for metal or if payment is by electronic transfer the dealer must keep the receipt identifying the transfer or if none the dealer must record particulars identifying the transfer.

[SMDA s.13]

Record keeping

If a dealer disposes of scrap metal in the course of business under a site licence, the dealer must record the following information:

(a) the description of the metal, including its type (or types if mixed), form and weight;

(b) the date and time of its disposal;

(c) if the disposal is to another person, the full name and address of that person;

(d) if the dealer receives payment for the metal (whether by way of sale or exchange), the price or other consideration received.

If a dealer disposes of scrap metal in the course of business under a collector's licence, the dealer must record the following information:

(a) the date and time of the disposal;

(b) if the disposal is to another person, the full name and address of that person.

Cross reference: the information must be recorded in a manner which allows the information and the scrap metal to which it relates to be readily identified by reference to each other.

The dealer must keep the records for a period of 3 years beginning with the day on which the metal is received or disposed of.

[SMDA ss. 14-15]

Enforcement

Civil enforcement

The SDMA does not provide for civil consequences for non-compliance with the legislation. However, an unlicensed dealer may well find that a court would not allow him to enforce a contract made in the course of business in view of the common law principle which renders illegal contracts void or unenforceable.

Criminal enforcement

Unlicensed scrap metal dealers

A person who carries on business as a scrap metal dealer without a licence is guilty of an offence and is liable on summary conviction to a fine not exceeding level 5 on the standard scale.

Licensed scrap metal dealers

The SDMA creates a number of offences punishable by fines at varying levels including:

* failure to notify changes to relevant details about the licence holder [level 3];

* failure to properly display a licence [level 3];

* failure to verify identity of a supplier properly [level 3] subject to a due diligence defence;

* buying scrap metal for cash [level 5] subject to a due diligence defence;

* failure to keep proper records [level 5] subject to a due diligence defence;

There is provision for directors’ criminal liability.

 

Northern Ireland

There is no specific legislation regarding metal dealers. The activity of metal recycling requires a licence under the Waste and Contaminated Land (Northern Ireland) Order 1997.

For further information, visit the GO.UK site and search for ‘metal recycling licence northern ireland’ or visit the Department of the Environment Northern Ireland

 

Scotland

Metal dealer's licence

Introduction

A metal dealer's licence is required for those carrying on a business as a metal dealer [Civic Government (Scotland) Act 1982 (CGSA) s. 28(1)]. A metal dealer’s licence must specify the activity which he engages in and the premises from which the activity is to be carried on.

Itinerant metal dealers: an itinerant metal dealer's licence shall permit the licence holder to carry on business as an itinerant metal dealer anywhere in Scotland. [CGSA s. 32]

Further official information: visit the GOV.UK site and search for ‘metal dealer's licence (Scotland)’ or visit the local authority’s site.

Applications for a metal dealer’s licence

Applications for a metal dealer’s licence are made to the relevant local authority. It would appear applications may usually be made online.

Tacit consent: it would seem most but not all Scottish local authorities apply tacit consent.

Appeals: an appeal against a decision of the local authority may be made to the sheriff’s court.

Metal dealers' licences may be subject to conditions attached to the licence by the licensing authority and to any mandatory conditions that may be prescribed by the Scottish Government [CGSA s. 3A]. Licensing authorities may attach other conditions as they deem reasonable and appropriate [CGSA sched. 1]

Exemptions: a licence is not necessary where a metal dealer is in possession of an exemption warrant. An exemption warrant is granted where a dealer has a level of turnover certified by the auditor of the metal dealer's business stating that, in a financial year ending in the preceding 18 months, the total amount received by the dealer in respect of metal sold or supplied by him or her, exceeded the specified amount [£1m with effect on 20th February 2013 [CGSA s. 28-29]

Record keeping

Licensed dealers are subject to record-keeping duties that require them to record certain particulars. Records must be kept for two years.

Metal received or acquired: records must be kept as to the following:

* the description and weight of the metal;

* the date and time of the receipt of the metal;

* if the metal is received or acquired from another person, the name and address of that person;

* the price, if any, payable in respect of the receipt or acquisition of the metal, if that price has been ascertained at the time or otherwise the value of the metal at the time when the entry is to be made as estimated by the dealer;

* in the case of metal delivered at the place in question by means of a mechanically propelled vehicle bearing a registration mark (whether the vehicle belongs to the dealer or not), the registration mark borne by the vehicle.

Metal dispatched, processed or otherwise disposed of: records must be kept as to the following:

* the description and weight of the metal immediately before its despatch, processing or other disposal;

* the date of despatch, processing or other disposal of the metal and, in the case of processing, the process applied;

* in the case of metal disposed of on sale or exchange, the name and address of the person to whom the metal is sold or with whom it is exchanged, and the consideration for which it is sold or exchanged;

* in the case of metal disposed of otherwise than on sale or exchange, its value immediately before its disposal as estimated by the dealer.

[CGSA s. 30]

Itinerant metal dealers: an itinerant metal dealer must obtain from each buyer of metal a receipt and must keep a record in respect of each sale to him of metal. The receipts and sale records must show the weight and description of the metal, the name and address of the seller or buyer and the price paid for the metal. Such records must be kept by the dealer for a period of 6 months from the date of the sale to which it relates. [CGSA s. 33]

Waiting time: no metal dealer may dispose of or process any metal acquired by him in the course of business until the expiry of a period of 48 hours (excluding any time on Saturdays or Sundays) after its acquisition. [CGSA s. 31]

Enforcement:

Civil enforcement

The CGSA does not provide for civil consequences for non-compliance with the legislation. However, an unlicensed dealer may well find that a court would not allow him to enforce a contract made in the course of business in view of the common law principle which renders illegal contracts void or unenforceable.

Criminal enforcement

Any person who without reasonable excuse does anything for which a licence is required under the CGSA without having such a licence is guilty of an offence and liable, on summary conviction to a fine not exceeding level 4 on the the standard scale.

There is a due diligence defence and provision for for directors’ criminal liability.

Legislative reform

Following public consultations, the Scottish Government introduced licensing legislation to the Scottish Parliament on 14 May 2014 in the form of the Air Weapons and Licensing (Scotland) Bill. The changes will introduce powers for the government to impose standard licence conditions, means of payment for metal and detailed record keeping requirements. See: http://www.scottish.parliament.uk/S4_Bills/Air_Weapons_DPM.pdf

[Page created: 13/08/2014]

 

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