Paragraph 3

A Party included in Annex I may authorize legal entities to participate, under its responsibility, in actions leading to the generation, transfer or acquisition under this Article of emission reduction units.

Public and private entities may be authorised by Parties to the Kyoto Protocol to participate in JI projects.

However, a Party that authorises the participation of a public or private entity in the CDM remains responsible for fulfilling its emission reduction obligations under the Kyoto Protocol and must ensure that the entity's participation complies with the rules:

A Party that authorizes legal entities to participate in Article 6 projects shall remain responsible for the fulfilment of its obligations under the Kyoto Protocol and shall ensure that such participation is consistent with the present annex.  Legal entities may only transfer or acquire ERUs if the authorizing Party is eligible to do so at that time (9/CMP.1, Annex, paragraph 29).

The Conference of the Parties serving as the meeting of the Parties (COP/MOP) and the Joint Implementation Supervisory Committee (JISC) have developed guidance on the participation of public and private entities in JI projects (particularly those using the Track 2 process, including in relation to:

• the content of the project design document (PDD) that must be submitted to the accredited independent entity (AIE) for determination and subsequently forwarded to the JISC;
• the process for determination of project activities; and
• the requirements for monitoring and verification of emission reductions.