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Much has been written on how Brexit actually works, and the yachting industry is no exception. Now the UK has formally left the EU, and details of the agreements are emerging, UK crews are especially keen to understand the impact it has on them. This may be directly in the form of EU travel and working rights, for example, but also indirectly as their status as EU employees has changed.
Although it isn’t technically needed, owners often look to synchronise the flag with the VAT status of the vessel. Owners of EU VAT-paid vessels may start to look away from the UK, perhaps to Malta as a popular EU registry. Indeed, Sarnia Yachts has seen use of the Malta flag grow in the past few years and, although Malta has differing technical requirements compared to other flags, perhaps Brexit will fuel this trend. Regardless of how popular the Maltese flag is, UK crew and their employers need to consider the impact Brexit has on their status when working on board a Maltese flagged vessel.
EU regulation 883/2004 controlled Social Security for UK seafarers on Malta-flagged vessels. Where UK seafarers were affiliated into the Maltese social security scheme before 31st December 2020, the Withdrawal Agreement is the key document. In simple terms, if they continue to work on board without interruption after 31st December 2020, they shall continue to enjoy the benefits provided in 883/2004 but must continue to pay their social security in Malta.
The provisions of Article 11.4 of EU Regulation 883/2004 have been transposed into the EU/UK Protocol and, by virtue of the Protocol, the position for UK resident/national seafarers has remained effectively the same. In other words, UK resident/national seafarers who commence their employment on board a Maltese flagged vessel from 1st January 2021 onward must pay social security contributions in Malta. For the technically minded, this is specifically by virtue of Article SSC.10, para. 4 of the Protocol.
All of this is, of course, based on the current draft of the Protocol. The final form is scheduled to be agreed by 28th February 2021, and it is expected to contain a number of clauses, amendments and so-called ‘legal loopholes’. Who can predict how these will apply and what will each member state’s final position and application of the Protocol be?
It is easy to be caught up in the story of Brexit to the exclusion of other rules. For example, all crew on Maltese flagged vessels should consider how they evidence payment of contributions into the EU Social Security system. Such evidence is needed to give access to benefits and, until recently, responsibility for the paperwork sat completely with the employer in Malta.
Where an EU country is signed up to the EESSI (Electronic Exchange of Social Security Information) system however, the responsibility shifts from the employer to the employee. The employer will still supply the A1 form, but the crew member must use this to obtain their own S1 form (or equivalent) in their home country as required. As implementation of the EESSI gathers momentum in Europe, this becomes a real consideration - Germany, France, Italy and the Netherlands for example are EESSI ready and other countries are quickly following suit.
As the UK is now a ‘third country’, it may not be eligible for the EESSI system. For now, the employer of a UK resident/national seafarer on a Malta-flagged vessel remains responsible, but that may change when the Protocol is formalised.
Sarnia Yachts is committed to providing an all-encompassing yacht and crew management service, so should you wish to discuss any aspect of Brexit, or indeed anything else relating to your yacht ownership or operation, then please get in touch.
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