According to the media reports, European authorities from 10 nations conducted a massive raid on banks, trading offices and energy firms arresting 25 for taking part in CO2-credit tax fraud.

The EUobserver reported on Monday that the raids were primarily conducted in Germany and Britain last Wednesday.

It was further reported that in Germany, authorities raided 230 offices, including Deutsche Bank headquarters in Frankfurt. In Britain, 450 customs officials took part in raids of at least 81 locations. Twenty-one were arrested in Britain while three were arrested in Germany.

Carbon emissions fraud was called "a very serious problem," by European Commission climate spokeswoman Maria Kokkonen.

The basic fraud is called a "carousel fraud." It involves setting up an office in one European country, then buying tax credits from another country, which exempts it from the value-added tax. The carbon credit is then sold in the host country with a tax assessment that the fraudster pockets.

The EUobserver said that authorities from Austria, Belgium, Cyprus, the Czech Republic, Denmark, Finland, Netherlands, Portugal and Norway took part in the investigation, which was begun by German authorities. (With Inputs from Agencies) (IANS)