Maritime LinesPractical issues arising from the impact of BREXIT on Maritime Trade

28 January, 2019by MARITIMA CONSIFLET
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On 29 March 2017 the United Kingdom filed notice of its intention to withdraw from the Union under Article 50 of the Treaty on European Union. Therefore, unless a withdrawal agreement is ratified that sets a different date all the primary and other legislation deriving from the EU will cease to apply to the UK as from 00:00h CET on 30 March 2019.

The UK will then become a “third country”, and we must be prepared for this.

BREXIT WITH AN AGREEMENT BETWEEN THE EU AND THE UK
If the UK leaves the EU via a withdrawal agreement there will be a transition period in which Community legislation will continue to apply to relations with the UK on transport matters.

BREXIT WITH NO DEAL BETWEEN THE EU AND THE UK
In this case the consequences for maritime transport will be felt on several fronts:

1. THE MARKET
A no-deal Brexit poses serious difficulties for goods traffic between continental Europe and the UK, given that the Channel and North Sea regions, where there is now substantial free movement of goods (mainly between France and the UK) would be affected. In this event Ireland could find itself in a position of de facto isolation, so proposals have been put forward for the creation of new routes between the North Sea and the Mediterranean to connect Ireland to mainland Europe.

2.  MORE CUSTOMS CHECKS

CHECKS
After any hypothetical Brexit, goods entering the customs territory of the EU from the UK or leaving that territory for the EU will be subject to monitoring by customs and may have to undergo customs checks. This means that, among other things:
• Customs formalities will be applied.
• Declarations will need to be presented.
• The customs authorities may require guarantees to cover existing or potential customs debts.

Goods entering the customs territory of the EU from the UK will also be subject to the relevant customs fees.

INDIRECT TAXATION (VAT) & SPECIAL TAXES
VAT
For VAT purposes, goods entering EU territory from the UK or classed for VAT purposes as shipped or transported from that territory to the UK:
• Will be considered as imported/exported goods.
• Will therefore be subject to VAT at the time of importing.
• Exports will be exempt from VAT.

SPECIAL TAXES
The movement of goods classed for purposes of special taxes as entering EU territory from the UK or shipped from that territory to the UK will be considered, respectively, as imported and exported goods subject to special taxes.

3. CABOTAGE
Brexit will also mean that cabotage in Europe can be handled only by vessels flying EU flags. If UK vessels (including Gibraltar) wish to continue operating in this market they must switch to an EU flag.

In this regard the confederation of British Industry proposes the setting up of a regulation of convenience to continue permitting UK ships to provide these services to any EU Member State without obstacles.

4. MERCHANT NAVY QUALIFICATIONS
In response to questions regarding professional merchant navy qualifications, the Spanish government’s La Moncloa website has published a message indicating that “professional qualifications are issued under the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW) and are therefore recognised internationally.

However, countries have to recognise certain qualifications (deck/engineering/radio officers and certificates of proficiency for tankers) by issuing endorsements, and if they do not belong to the EU they are required to have signed a bilateral agreement for the recognition of STCW qualifications.
As of this date Spain has no such agreement with the UK.

MARÍTIMA CONSIFLET

A global company providing logistics and maritime services.

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