Description of sector

As an island nation, the UK has been dependent on the sea for its trade and defence throughout history, and strong traditions of merchant seafaring can be traced back hundreds of years. The UK maritime sector is comprised of several distinct, but connected, sub-sectors spread across the country including: a large and varied port sector primarily supporting domestic imports and exports across the economy; a smaller shipping sector serving both domestic and international markets, including the oil and gas sector; a world leading cluster of UK based maritime business services, primarily supporting international shipping; and a linked UK marine sector, which includes marine equipment manufacturing to support shipbuilding around the world, ship construction (where a number of UK businesses are involved in niche high value markets such as superyachts) and ship repair. The UK is also a world leader in maritime education and research.

The current EU regulatory regime

Maritime transport is an inherently global industry. As such, many EU rules (particularly with regards to safety and the environment), build on standards established by the International Maritime Organization (IMO) and the International Labour Organization (ILO), both specialist agencies of the United Nations.

IMO Conventions establish and maintain common standards for safety and security, mainly for international ships.41 This is done within the framework of United Nations Convention on the Law of the Sea (or “UNCLOS”), which governs the rights and responsibilities of flag and coastal States.

In some cases, EU rules are more stringent than their associated international requirements. This includes instances where provisions are brought into force earlier than is required under international law, or where requirements relating to international shipping are extended to cover vessels operating on domestic voyages as well.

The EU maritime acquis covers a wide range of areas. Detail on each of these areas, including key legislation, is provided below.

Rules Of Internal Market

The rules of the internal market in relation to shipping are outlined in two significant pieces of EU legislation:
a. Regulation 4055/86, which guarantees the rights of Member State nationals to carry passengers or goods by sea between the port of a Member State and the port or offshore installation of another Member State, (or a non-EU country).

b. Regulation 3577/92, which guarantees the rights of EU shipping companies to provide maritime cabotage services. These are voyages carried out by ships of one state between two ports (or between an installation and a port), within the territory of another. Shipping companies based in countries outside the EU, but controlled by EU nationals, may also offer such services.

These pieces of legislation are complemented by other EU rules which seek to reduce technical barriers and encourage EU market integration, including rules governing market access for marine equipment, and the harmonising of requirements relating to maritime professional qualifications.

Safety And Environmental Standards

As noted earlier, many elements of EU legislation covering these areas derive from international standards agreed at the IMO. EU legislation largely incorporates these standards making them enforceable under EU law, and adapts them such that they can be applied to non-international ships. Some of the key legislation is outlined below.

Safety

There are a wide range of safety provisions within the EU Maritime acquis. Examples include: Directive 2009/45/EC, on standards for the safe construction and operation of domestic passenger ships, Directive 2009/18/EC on the investigation of accidents and Directive 2002/59/EC on vessel traffic monitoring.

44. There are also specific regulatory requirements covering the health and safety of workers, which are adopted on the basis of Article 153 TFEU. Directive 89/391/EEC is a framework directive which sets out general principles for the protection of workers. A number of other directives outlining more detailed requirements sit below this, including Directive 2006/25/EC regarding the exposure of workers to artificial optical radiation, Directive 93/103/EC on Health and Safety standards for fishing vessels and Directive 2000/54/EC, which lays down minimum requirements for the health and safety of workers exposed to biological agents at work.

Environment

There are a wide range of EU regulatory requirements that are designed to protect the marine environment. Directive 2008/56/EC establishes the framework for community action in the field of marine environmental policy.

Numerous EU requirements regulate pollution from ships. These include Regulation 2015/757, which covers the monitoring, reporting and verification of carbon dioxide emissions in maritime transport, Directive 2005/35/EC on the discharge of polluting substances, Directive 2012/33/EU on the sulphur content of marine fuels, and Directive 2000/59/EC on reception facilities for ship-generated waste and cargoresidues.
EU law also covers requirements relating to ship recycling. This includes Regulation 1013/2006 on shipments of waste and Regulation 1257/2013, which applies the requirements of the Hong Kong Convention to ships flagged with EU MemberStates.

Passengers’ And Workers’ Rights

The EU has a number of rules regulating seafarer living and working conditions as well as the training standards for seafarers. These mostly derive from IMO and ILO rules, such as the Maritime Labour Convention (MLC) 2006.

In relation to seafarers, Directive 2013/54/EU details flag state responsibility for compliance and enforcement of the MLC, while Directive 2013/38/EU requires EU states to provide further enforcement of the MLC through the mechanism of port state control. Outside the MLC there are other instruments regulating workers’ rights, for example Directive 2009/13/EC, which addresses working time issues for seafarers.

In relation to passengers’ rights, EU Regulation 1177/2010 establishes a set of rules for the rights of passengers when travelling by sea and inland waterway. These rules cover compensation in the event of cancellation or delay, complaints mechanisms, the rights of disabled passengers and the right to information regarding passenger rights.

Security

Maritime security in the EU is regulated primarily by two measures, authorised under Article 80(2) TEC (and now Article 100(2) TFEU).

Regulation 725/2004/EC on enhancing ship and port facility security applies provisions of the International Ship and Port Facility Safety Code, as adopted by the IMO, and makes some of these provisions mandatory (rather than optional).

Directive 2005/65/EC on enhancing port security requires that ports are subject to a security regime, with the objective of further enhancing the safe zones provided for under Regulation 725/2004/EC. The directive requires that ports specify a perimeter within which unlawful entry is prohibited and specifies the security rules that should be applied within that perimeter. It also provides for inspection and verification by the Commission.

Outfitting And Construction Standards

Recognised Organisations

Flag States appoint certain organisations (mostly Classification Societies) to perform, on their behalf, statutory certification and services which are mandatory under IMO instruments and national legislation. Classification societies which are recognised by the EU are known as Recognised Organisations (or “ROs”). The EU legislation which deals with classification societies is Regulation 391/2009 and Directive 2009/15/EC, made under Article 80(2) TEC (now Article 100(2) TFEU). This legislation is intendedto implement and enhance IMO requirements, particularly in relation to the monitoring and assessment of ROs.

Marine Equipment

Under Directive 2014/90/EU, (the “Marine Equipment Directive” or “M.E.D”, made under Article 100(2) TFEU), UK maritime testing and approval bodies (or “Notified Bodies”) are able to approve products prior to their being placed on board vessels in the EU. The system is designed to ensure that equipment placed on board ships complies with specific standards. Under M.E.D, UK manufacturers of marine equipment can obtain certification for their products and sell these to consumers across the internal market, without the need to appoint an Authorised Representative in another member state.

Article 170 TFEU provides for the establishment and development of TransEuropean Networks (TEN), including in the area of transport (TEN-T), to ensure the cohesion, interconnection and interoperability of the trans-European transport network, as well as access to it. Regulation 1315/2013 defines an EU-wide transport network which covers the main modes of transport (including roads, rail, aviation and maritime) and sets standards for transport infrastructure with deadlines for implementing them. The TEN-T also acts as a focus for EU Transport legislation.

The Regulation defines “core” and “comprehensive” ports for all Member States. It includes ports from all four constituent countries of the UK, including (but not limitedto), Dover, Holyhead, Belfast and Stranraer.

The main impact of this is that a number of EU requirements (including for instance the Port Services Regulation and the alternative fuels Directive), apply based on whether or not a port falls within scope of the TEN-T Regulation, with different degrees of application depending on whether they are a “core” or “comprehensive”port.

EMSA (European Maritime Safety Agency)

As an EU Member State, the UK is a member of EMSA This agency provides technical, operational and scientific assistance to the European Commission and Member States on maritime safety, maritime security, pollution prevention and pollution response. EMSA also assists Member States affected by pollution caused by ships and oil and gas installations upon request. However – in contrast to other EU agencies – EMSA is not an enforcement body. EMSA also includes representatives from Iceland and Norway.

In addition to these responsibilities, EMSA also hosts a variety of information systems which are used by the relevant agencies of different member states, including the UK’s Maritime Coastguard Agency (MCA) and Marine Accident Investigation Branch (MAIB). These systems help the agencies of member states undertake their core functions in a range of areas, including Port State Control, pollution prevention and casualty investigations.

EMSA also provides training to all member states and third countries to share best practice in safety, pollution prevention and pollution response.

Devolution issues

UK Nations

Across the UK nations, Maritime transport matters are mostly reserved, although ports and harbours are generally devolved, save in Wales, where they will be
devolved on the coming into force of the Wales Act 2017. The devolution settlement in Wales will change upon the principal appointed day, on which the Wales Act 2017 fully comes into force.

In Scotland, marine transport is reserved, including the subject matter of the Merchant Shipping Act 1995, but ports, harbours, piers and boatslips are generally devolved. In Northern Ireland, navigation, including merchant shipping, is reserved, but harbours and inland waters are devolved.49
Crown Dependencies And Overseas Territories

Some of the IMO/ILO conventions have been extended to the Crown Dependencies and Overseas Territories, but the EU provisions are not applicable. The Crown Dependencies are nevertheless subject to those elements of the acquis which relate to the customs union.

The EU maritime acquis applies to Gibraltar. However, Gibraltar is not subject to those elements of the acquis which relate to the customs union. Existing frameworks for how trade is facilitated between countries in this sector

The arrangements described in this section are examples of existing arrangements between countries. They should not be taken to represent the options being considered by the Government for the future economic relationship between the UK and the EU. The Government has been clear that it is seeking pragmatic and innovative solutions to issues related to the future deep and special partnership that we want with the EU.

The EU has entered into a number of Free Trade Agreements (FTAs) and Partnership and Cooperation Agreements (PCAs) with third countries, which often
contain specific provisions on references to general cooperation in relation to inland and maritime transport. FTAs provide for the confirmation and codification of law andpractices that provide business with certainty, which in turn promotes investment in the territory of the contracting parties. PCAs include general cooperation on safety,environment and security.

Key agreements between the EU and third parties which cover maritime include:

a. Comprehensive Economic and Trade Agreement (or “CETA”)50, which is the trade agreement between the EU and Canada. Chapter 1451 covers International Maritime Services, establishing the framework for regulating the maritime transport market between the EU and Canada. It includes measures to ensure equal access to ports and to promote fair competition in the provision of commercial services offered by ships;
b. EU-China Maritime Transport Agreement.52 This agreement entered into force in 2008 and is aimed at improving the conditions under which maritime cargo transport operations are carried out to and from China. It contains provisions promoting the freedom to provide maritime transport services, free access to cargoes and cross trades, and unrestricted access to (and non-discriminatory treatment in) the use of ports and auxiliary services; and
c. EU-US Agreement on Mutual Recognition of Certificates of Conformity for Marine Equipment.53 This agreement is designed to facilitate EU-US trade in marine equipment by giving EU manufacturers the possibility of approving their products for the US market with a Conformity Body located in the EU in accordance with the M.E.D. Likewise, the agreement also enables US manufacurers to approve their products for the EU market with a Conformity Body located in the US, in accordance with relevant US laws and regulations.