BREXIT
yachts from operating commercially in EU waters, this has never been invoked. Superyachts flying the Caribbean Red Ensign have chartered successfully unhindered in the EU for many years, apart from very short lived interruptions in Greece and Palma. This is unlikely to change with the UK now joining that fleet. What might happen is that there might be demands to prove the tax status of the yacht in the EU. Is the yacht VAT paid and in free circulation (pre-Brexit status) and private? Is the yacht VAT paid or VAT accounted for and in free-circulation and operating commercially? Is the yacht in the EU under the temporary importation regime? You need to know the answer and provide proof.
never about the principles of jurisdiction or enforceability. For the time being that has changed. As a consequence there is a potential of aggressive litigants, tactically choosing to raise jurisdictional objections to the English courts having the right to hear cases where the ability of English judgements to be enforced in EU member states is questionable. This also true in the reverse. This might increase the incidents of parallel actions being commenced. Until the issue of jurisdiction and enforcement is clarified it is safer to stick to arbitration or seek specific legal advice on choice of law and the impact of choosing a particular court to have jurisdiction over a particular contractual arrangement. Until the UK and EU agree a treaty on the bi-lateral enforcement of their respective court judgements there will be a degree of destabilisation.
And so, without much celebration, other than brief mentions on television and news websites, the UK at 11pm on 31st December 2020 stopped, in all respects, from being a member of the European Union. But for the very late conclusion of the EU-UK Trade and Cooperation Agreement (all 1246 pages it) and COVID-19, the superyacht advisory community would have set out a clear road map for the relationship between the UK and the EU for the superyacht community. There was lots of speculation, but even now there are still uncertainties.
What do we actually know?
of the practitioners and certainty of legal outcome through precedent still ranks high in clients reasoning to choose English law. The choice of English law or the choice of law of an EU member state will be respected both by the English courts or the courts in the EU Member states. What is absolutely certain is that Brexit does not affect arbitration and the enforcement of arbitration awards. However, the December 2020 Agreement is silent on what happens in respect of the enforceability of judgements of English courts in the EU or the courts of EU member states in the UK. In the past, the contractual discussions about law and jurisdiction were often just a battle of national wills or commercial positions taken by individuals. The discussions were
Operating my superyacht commercially?
The EU-UK Trade and Cooperation Agreement (the Agreement) does not have a single mention of the words yacht, superyacht, pleasure vessel or recreational vessel. Not ideal and therefore we have to apply general law as we know it to the superyacht industry as it will be affected by Brexit.
The principle change here is that if the superyacht owning company was VAT registered in the UK, but it operated principally in the EU you will have to move your home chartering VAT registration to an EU member state.
Can my superyacht fly the Red Ensign in the EU?
The UK flag is no longer a European flag. Historically it has always been the case that the Red Ensign, defaced or otherwise, was less likely to be boarded by European customs officers especially if the home port was London. Now, all Red Ensign flagged yachts are non-EU flagged. Their presence is not illegal in the EU and although EU Regulation 3577/92 could be invoked by individual EU member states to prevent non-EU flagged
Will Contracts Change?
What about my crew?
The content of contracts should not change. People who want to build new yachts, buy or sell second-hand yachts or indeed do anything which requires a contract, are still free to do so under English law. The reasons for choosing English law have not changed, the expertise
If you have any crew that are British nationals and the yacht is permanently berth in an EU port, they will be treated the same as any other non-EU crew. That means they will have to be stamped in and out of the Schengen area when they board and disembark in order to
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