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Metal Recycling News September 05, 2016 12:30:12 PM

Metal dealers banned from paying cash for scrap transactions

Carolina Curiel
ScrapMonster Author
Anyone who carries on business as a metal dealer will require a license to operate from 1 September.

Metal dealers banned from paying cash for scrap transactions

EDGWARE (Scrap Monster): A new legislation has come into force in Scotland effective September 1st. This legislation bans scrap metal dealers from making cash payment for scrap received or sold by them. It further requires scrap metal dealers to verify and record the identity of scrap customers. The people involved in scrap trade are required to produce valid photo identity cards or other documents such as a bank statement. The payment will be either through electronic transfers or through crossed cheques.

The Air Weapons and Licensing (Scotland) Act 2015 will amend the elements of the Civic Government (Scotland) Act 1982 that regulates metal dealers. As per the new legislation, all metal dealers and itinerant metal dealers in Scotland are required to obtain valid metal dealers’ license to operate their facilities. The legislation also proposes total ban on cash payments on scrap metal transactions and enhanced record-keeping requirements.

Anyone who carries on business as a metal dealer will require a license to operate from 1 September. This includes those who currently operate under an exemption warrant. Additionally, motor salvage operators are brought within the scope of the 2015 Act and will require a license. Aside from metal dealers operating from a site, itinerant metal dealers and motor salvage operators, other types of business will be affected by the new law. The 2015 Act specifies that anyone who deals ‘wholly or substantially’ in buying or selling scrap metal requires a license.

The 2015 Act introduces a ban on cash payments for scrap metal. This section outlines the acceptable forms of payment for scrap metal. Payments can only be made by electronic transfer into a bank account in the name of the payee or by non-transferable cheque. The cheques made out to ‘cash’ will not be allowed. The legislation makes payments methods such as vouchers, postal orders, foreign and virtual currencies, mobile phone airtime, credit cards and supermarket gift cards unacceptable.

From 1 September, metal dealers will be required to take and record the identity of those they buy scrap metal from. Dealers will need to verify a person’s identity by reference to documents bearing the person’s name, photograph and residential address. Examples of suitable photograph-bearing documents include British passport, driving license and passport issued by an European Economic Area state. If residential address could not be obtained from the photo-ID, the dealers must ask for secondary documentation such as utility bill, bank statement or debit/credit card statement. The legislation excludes mobile telephone bills from the list of accepted documentation.

Scrap metal dealers are required to keep separate records for the acquisition and disposal, or processing, of metal. In addition, separate records should be kept at each place of business. While accepting scrap metal, the dealers are required to record description of the metal, its weight and the date and time it was received. If the received metal is in turn acquired from another person, dealers must record the name and address of the person it was acquired from, and how their name and address was verified. Dealers are additionally required to record the price of the metal at the time the record is made, if known. The record should also mention the mode of payment and a copy of the cheque or evidence of transfer. The sale transaction must record the name and address of the person to whom the scrap metal was sold.

Meantime, the British Metals Recycling Association (BMRA) has welcomed the cash ban on scrap transactions and the enhanced documentation requirements as proposed by the legislation.

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