Wednesday, December 23, 2020

How Will Brexit Actually Affect British Interests at Sea?

A Study of What Will Happen from 1 January 2021
Shipping News Feature

UK – EUROPE – This week saw a very interesting look at the realities of life after Brexit for British maritime interests compiled by Jesús Barbadillo, María Cózar and Verónica Saavedra Lobato working for one of the Spanish offices of international law firm Garrigues.

The article was aimed specifically at the Spanish readership but many of the points made are not country specific, rather general rules affecting the EU. The trio point out that, after the end of the transition period on 31 December 2020, and in addition to the flood of measures which will be required to import and export goods correctly, major changes affecting merchant shipping are also due to occur.

UK ship owners and UK flag vessels (according to the list in the Annex to the 2004 Community guidelines on State aid to maritime transport) will not be treated as Community ship owners or vessels (for the purposes of Council Regulation (EEC) No 3577/92 of 7 December 1992 applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage).

This means these bodies will not be able to carry out cabotage traffic in Spain for example, without a waiver for a specific exceptional service in the absence of a suitable and available Community ship, in the same way as any ship from a third country. UK flag vessels will be treated as non-Community vessels for the purposes of calculating the percentages of Community and foreign vessels allowed by the Spanish tonnage tax legislation.

All scheduled shipping services falling within the scope of article 6 of Regulation EU No 725/2004 on enhancing ship security (ferries linking a UK and an EU port) must provide the required information concerning security before entering a Community port. The inspection system set up by Directive 16/2009 on port state control will cease to apply in the UK.

An example given is that enrolled UK seafarers on Spanish vessels will be treated as foreign rather than Community seafarers for the purposes of the allowed percentages of Community and foreign crew members on Spanish vessels, and for the purposes of claiming tax and social security incentives (Law 19/1994 on the Canary Islands Financial and Tax Regime) for vessels registered on the Canary Islands Special Register of Vessels and Shipping Companies (REBECA).

UK seafarers will not be able to serve as masters or first deck officers on Spanish vessels because they will not be from the EU or the European Economic Area, unless there are exceptional circumstances. Certificates issued to seafarers by the UK will not be accepted or endorsed in Spain. However, any certificates endorsed before the end of December 31, 2020 will remain valid until the endorsement expires. The UK will therefore come to be treated as a third country and the recognition by endorsement of its certificates will be governed by article 19 of Directive 106/2008.

Not just merchant vessels are affected, yachts also will have a change of status subject to the terms ultimately determined in any agreements between the UK and the EU. Since the UK will cease to be part of the European Economic Area, after the end of the transition period, UK flag ships under 14 metres in length will not be able to be chartered out in Spanish territorial waters, as recreational craft for commercial use up to this size may only fly a Spanish or EU flag.

In principle, any UK flag craft that is in the EU before 31 December 2020, and therefore have Union good status, will continue to be treated as Union goods after that date. However, after that date (and depending on what is ultimately agreed) any new UK flag craft entering EU waters will be placed under the temporary admission procedure and will only be allowed to stay in the customs territory of the Union for up to 18 months without paying customs duty and VAT.

Photo: The Red Duster may be Persona non Grata.