Changes introduced under theLegal Aid, Sentencing and Punishment of Offenders Act mean that payments for scrap metal must be made electronically or by cheque.
The legislation introduces amendments to the Scrap Metal Dealers Act 1964 that currently regulates the scrap metal industry.
Payment by cash is now a criminal offence and can result in fines, with higher fines set out for more serious breaches of the law.
The Act also increases police powers to enter scrap metal yards by warrant in order to ascertain whether the ban on cash payments is being complied with.
If found to be in breach of the ban, the paying company, the employee responsible for making the payment and any management staff who have failed to take reasonable steps to prevent payment being made will all be guilty of an offence.
The Home Office has issued guidance document on its website setting out how the new ban will be implemented. It is available to read here.
The British Metals Recycling Association (BMRA) has expressed some concern that not all recycling companies are ready for the ban, although many companies, such as Sims Metal Management, have been carefully planning for the change.
The company has installed card readers at all its UK sites which accept Visa Debit cards and work in much the same way as for transactions in shops on the high street.
Sims Metal Managements marketing manager, Derek Campbell, said: Any customers who we dont deal with on a regular basis will be asked for ID such as a photocard driving license. We now see this as industry best practice and will be continuing it, regardless of no longer paying in cash. This should also ensure our future compliance with the forthcoming new Scrap Metal Dealers Act.
It is hoped that further legislation also currently being considered by the House of Lords will tighten some of the loopholes in the new legislation, which does not cover metal traders such as motor vehicle salvage operators.
The Scrap Metal Dealers Bill has already passed through the Commons after being introduced as a Private Members Bill by Conservative MP Richard Ottaway (see letsrecycle.com story).
Speaking out in support of this bill, BMRA director general Ian Hetherington said: The industry must now pull together and work with the police, local authorities and others to reduce the impact the cash ban will certainly have on businesses, particularly smaller traders, and work to ensure this bill makes it into law and as quickly as possible. The longer the cash ban continues without this reform, the more damage it will do to the UK metals recycling industry.
Mr Hetheringtons article on the new scrap metal legislation is available to read on letsrecycle.com here.