Continued connectivity with the EU for Road and Air
The European Union have produced certain documents detailing their proposals to ensure connectivity between the EU and UK for both modes should the UK leave the EU on the 29th March without a deal.
As the 29th March draws closer, concerns regarding how much road and air transport will be disrupted by a “No Deal” Brexit have grown apace.
Both are dependent on the UK reciprocating the arrangements, but recent reports indicate that the UK and EU have broadly similar positions. Whilst this information is mainly for operators, from a forwarders point of view the proposals indicate that some form of access will be possible, even in a more limited form than is currently available.
Updates on EU measures to ensure continued market connectivity in the event of a “No deal” Brexit
Compromise on No-Deal Brexit Road Connectivity
Following the provisional Parliament/Council agreement on the European Commission’s proposal for a Regulation on basic road freight connectivity in the event of a no-deal Brexit , the Member States’ Permanent Representatives’ Committee (COREPER) agreed on the final compromise text on 1 March 2019. You can find the final version of the text (subject to legal linguistic review) at https://www.clecat.org/media/CI053aROAD_Final%20Compromise%20No-Deal%20Brexit%20Road%20Connectivity.pdf
The key provisions of the Regulation pertain to allowing road haulage operators licensed in the UK to carry goods into the EU temporarily, provided that the UK confers equivalent rights to EU road haulage operators and continues to comply with relevant social and technical rules of the EU. Furthermore, the Regulation would allow UK hauliers to carry out limited additional operations of loading and unloading within the territory of the EU, decreasing over time:
- During the first 4 months, up to two additional operations of loading and unloading in the territory of the EU would be allowed within 7 days from the initial unloading in the territory of the EU;
- During the consecutive 3 months, only one additional operation would be allowed;
- During the remaining time, no additional operations would be allowed.
In contrast to the original proposal, the start date of the contingency measures would be flexible in case Brexit is delayed. That, however, would not affect the end date and the contingency measures would cease to apply after 31 December 2019.
On 4 March, the provisional agreement was adopted by the Parliament’s Transport Committee by a large majority. The Parliament’s Plenary is expected to formally adopt the Regulation on 13 March, which would then pave way for a final adoption in the General Affairs Council on 19 March, i.e. 10 days before the official Brexit date.
We understand that this agreement is subject to the UK reciprocating and granting equal rights to EU operators wishing to operate in the UK, which we understand at this confusing time is likely.
Compromise on No-Deal Brexit Air Connectivity
On the 27th February 2019, the Permanent Representative Committee (COREPER) endorsed the text of the provisional agreement that was reached on 19 February between the Romanian Council Presidency and the European Parliament on measures to mitigate the potential severe disruption to air connectivity in a no-deal Brexit. The text full of the arrangement can be found at: https://data.consilium.europa.eu/doc/document/ST-6922-2019-INIT/en/pd
It is important to note that the measures are exceptional in nature and strictly time-limited as they are not intended to replicate the status quo under EU law, but rather to preserve basic connectivity between the EU and the UK. They are not as favourable or flexible as the present arrangements.
The interim agreement enables UK-licensed carriers to provide basic air transport services between the UK and the EU-27. More specifically, UK air carriers will be allowed to:
- fly across the territory of the Union without landing,
- make stops in the territory of the Union for non-traffic purposes,
- perform scheduled and non-scheduled international air transport services for a maximum of five months from the first day of application,
- perform scheduled and non-scheduled international air transport services for all-cargo services between the UK and the EU, as part of a service with origin or destination in the territory of the UK.
The total seasonal capacity to be provided by UK carriers for those services shall not exceed the total number of frequencies operated by those carriers for those services during respectively the IATA winter and summer seasons 2018, pro rata temporis, i.e. at the rate for the time.
Moreover, for a maximum of seven months from the first day of application, carriers may continue to provide scheduled air services on routes subject to public service obligations where the right to operate has been granted before the date of application of the Regulation and subject to the conditions set out in the Regulation on common rules for the operation of air services in the community which can be viewed at: https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A32008R1008
The Regulation also allows for cooperative marketing arrangement, such as blocked-space or code-sharing arrangements (cf. Article 3a), as well as for aircraft leasing (cf. Article 3b).
Furthermore, it contains a framework for ensuring compliance with the necessary requirements of air carriers holding an operating license issued by an EU Member State, which would otherwise cease to comply with the EU ownership and control requirements due to Brexit. More specifically, regarding the ownership and control requirements for operating licenses, the operating licenses shall remain valid for a period of six months from the first day of application of the Regulation.
Therefore, the air carriers shall, within two weeks from the entry into force of the Regulation, present a plan for remedial action to the competent licensing authority. This plan shall set out the measures intended to achieve full compliance at the latest on the first day after the end of the six-month period.
The rights will be conditional on equivalence and subject to conditions ensuring fair competition. Where the Commission determines that the rights granted by the UK to Union air carriers are not, de jure or de facto, equivalent to those granted to UK carriers, the Commission may take appropriate steps to address the situation. This includes:
- limiting the allowable capacity,
- require Member States to adapt the operating authorisation,
- require Member States to refuse, suspend or revoke the operating authorisations, or
- adopt financial duties or operational restrictions.
The proposed Regulation would apply until an air transport agreement with the UK enters into force or until 30 March 2020, whichever comes first.