Paragraph 4

If a question of implementation by a Party included in Annex I of the requirements referred to in this Article is identified in accordance with the relevant provisions of Article 8, transfers and acquisitions of emission reduction units may continue to be made after the question has been identified, provided that any such units may not be used by a Party to meet its commitments under Article 3 until any issue of compliance is resolved.

Emission reduction units (ERUs) are created by Parties by converting assigned amount units (AAUs) or removal units (RMUs), adding a project identifier to the serial number, and changing the type indicator in the serial number to indicate an ERU.  The ERUs are first issued into the national registry of the host Party, and then forwarded to project participants.

Prior to their transfer, each Party shall issue ERUs into its national registry by converting AAUs or RMUs previously issued by that Party and held in its national registry. An AAU or RMU shall be converted into an ERU by adding a project identifier to the serial number and changing the type indicator in the serial number to indicate an ERU. Other elements of the serial number of the AAU or RMU shall remain unchanged. The project identifier shall identify the specific Article 6 project for which the ERU is issued, using a number unique to the project for the Party of origin, including whether the relevant reductions in anthropogenic emissions by sources or enhancements of anthropogenic removals by sinks were verified under the Article 6 Supervisory Committee (13/CMP.1, Annex, paragraph 29).

9/CMP.1, Annex, paragraph 21 sets out six eligibility criteria for engaging in the transfer and/or acquisition of ERUs from Joint Implementation (JI) projects:

Subject to the provisions of paragraph 22 below, a Party included in Annex I with a commitment inscribed in Annex B is eligible to transfer and/or acquire ERUs issued in accordance with the relevant provisions, if it is in compliance with the following eligibility requirements:

1. It is a Party to the Kyoto Protocol
2. Its assigned amount pursuant to Article 3, paragraphs 7 and 8, has been calculated and recorded in accordance with decision 13/CMP.1
3. It has in place a national system for the estimation of anthropogenic emissions by  sources and anthropogenic removals by sinks of all greenhouse gases not controlled by the Montreal Protocol, in accordance with Article 5, paragraph 1, and the requirements in the guidelines decided thereunder
4. It has in place a national registry in accordance with Article 7, paragraph 4, and the requirements in the guidelines decided thereunder
5. It has submitted annually the most recent required inventory, in accordance with Article 5, paragraph 2, and Article 7, paragraph 1, and the requirements in the guidelines decided thereunder, including the national inventory report and the common reporting format.  For the first commitment period, the quality assessment needed for the purpose of determining eligibility to use the mechanisms shall be limited to the parts of the inventory pertaining to emissions of greenhouse gases from sources/sector categories from Annex A to the Kyoto Protocol and the submission of the annual inventory on sinks
6. It submits the supplementary information on assigned amount in accordance with Article 7, paragraph 1, and the requirements in the guidelines decided thereunder and makes any additions to, and subtractions from, assigned amount pursuant to Article 3, paragraphs 7 and 8, including for the activities under Article 3, paragraphs 3 and 4, in accordance with Article 7, paragraph 4, and the requirements in the guidelines decided thereunder (9/CMP.1, Annex, paragraph 21).

Parties must meet the requirements in paragraphs (a), (b) and (d) before they will be eligible to issue and transfer ERUs to project participants:

Where a host Party does not meet the eligibility requirements set out in paragraph 21 above, the verification of reductions in anthropogenic emissions by sources or enhancements of anthropogenic removals by sinks from an Article 6 project as being additional to any that would otherwise occur, in accordance with Article 6, paragraph 1 (b), shall occur through the verification procedure under the Article 6 Supervisory Committee, as set out in section E below.  The host Party may, however, only issue and transfer ERUs upon meeting the requirements in paragraphs 21 (a), (b) and (d) above (9/CMP.1, Annex, paragraph 24).

The "the verification procedure under the Article 6 Supervisory Committee" referred to in the above paragraph is the Track 2 procedure.

Furthermore, according to this paragraph 4 of Article 6, Parties will not be permitted to use ERUs for compliance with their Kyoto targets unless they have satisfied their obligations under Articles 5 and 7 (listed in 9/CMP.1, Annex, paragraph 21(c) and (d) above), and the acquisition of ERUs has been supplemental to domestic action.

The Compliance Committee is the body charged with ensuring compliance with the provisions of the Kyoto Protocol.

Article 18 of the Kyoto Protocol calls on the COP/MOP to:

The Conference of the Parties serving as the meeting of the Parties to this Protocol shall, at its first session, approve appropriate and effective procedures and mechanisms to determine and to address cases of non-compliance with the provisions of this Protocol (Kyoto Protocol, Article 18).

At COP/MOP 1, the procedures and mechanisms relating to compliance under the Kyoto Protocol were adopted (in decision 27/CMP.1), and the members and alternate members of the facilitative and enforcement branches were elected.