The introduction of a yacht under the Temporary Admission (TA) Customs regime (also known as Temporary Importation or TI) in the Customs Territory of the Union (CTU) allows it to enjoy total relief from import duties and is exempt from VAT on imports. As far as the VAT systems in the EU are harmonized, this exemption is also applicable in the domestic legislation of all other EU Member States.
According to the Union’s Customs regulations, TA is acceptable provided that the three following conditions are met:
- The yacht is registered outside the CTU.
- The yacht is registered under the name of a person/entity established outside the CTU.
- The yacht is used by a person established outside the CTU.
These conditions have remained unchanged with the “new” Union Customs Code (UCC) that came into force last January 1st, 2016 and its additional development regulations. Nevertheless, some aspects of the TA that were peaceful with the previous Community Customs Code (CCC) are now controversial with the UCC. These are, amongst others, the procedure by which it is understood that a vessel is considered to be under the TA regime.
Prior to the entry into force of the UCC, a yacht was considered to have been declared for TA by the sole act of crossing the border of the customs territory of the EU, considered to be twelve nautical miles from the coastline. Therefore, the simple fact of crossing the twelve nautical miles limit was enough, with no other formalities required.
However, with the implementation of the UCC and its complementary regulations, in Spain and also in other countries in the EU, the above procedure is not considered enough and, in general, a so-called “oral declaration” (Annex 71-01 contained in the Commission Regulation (EU) 2015/2446 of July 28, 2015) is required to be filed in -curiously in writing – with the relevant Customs authorities-.
The physical presence of the vessel in the relevant customs area is also necessary, which causes logical drawbacks when the destination of the yacht is not within that customs area or a nearby area. This criterion was based on article 136.1.a) of said Regulation (EU) 2015/2446).
The diverse causes that lead some EU countries, Spain among others, to change their criteria have been the following:
- The previous Commission Regulation (CEE) of July 2, 1993, developing the previous CCC (Council Regulation (EEC) 2913/92 of October 12, 1992) expressly provided in articles 232 and 233 the possibility of considering a Customs Declaration the “mere fact of crossing the border of the customs territory of the Community”, based on the reference to the “the agreements in force in respect of tourist traffic” provided for in article 38.4 of the CCC, which allowed such possibility. This reference was deleted in the text of the new UCC.
- As I discussed in May 2016 with the Directorate-General for Taxation and Customs Union (DG TAXUD) in Brussels, it seems that it was clearly not the intention of the European Commission to change the procedure by which it was understood that a vessel was under the TA regime. In fact, they considered that the mentioned articles 232 and 233 of the previous CCC could be perfectly replaced by articles 139 and 141 (that needed to be amended) of the Commission Regulation (EU) 2015/2446, developing the new UCC. In my opinion, the problem is that, literally, the new articles do not cover the entry of the vessel into the CTU by the mere fact of crossing the border of the customs territory, but only its further re-exportation (exit) using this procedure.
Now the good news. Last November 20th, 2017, the Spanish Directorate-General of Customs issued an internal (therefore, not published) instruction to all the Spanish coastal regions in which it was pointed out that, henceforth, the criterion of considering, once again, that the mere fact of crossing the border of Customs territory of the Union would be accepted and, therefore, considered a customs declaration for the purposes of a vessel being admitted under the TA Customs regime. This criterion has been adopted under an interpretation consisting on assimilating the mere fact of crossing the border of the UCT to the fact of passing the vessel through a customs office foreseen in article 141 of the new UCC.
In my opinion, this is a wise decision given that it helps simplify the procedure making it agile and safe; it corresponds with the original intention and spirit of the European Commission of not changing the procedure; and it enhances legal certainty.
Based on the above, when a yacht complying with the TA conditions enters the Union Customs Territory through Spain, it will be enough to be considered under such regime to cross the 12 nautical miles border of the Spanish jurisdictional waters. Nevertheless, if it is foreseen for the yacht to continue to navigate to other countries within the UCT (e.g. France), it will be necessary to ensure that the Spanish simplified procedure is also acceptable for those countries to also consider the yacht being under the TA customs regime.
Needless to say that it is really regrettable that the owner of the vessel has to bear the burden to ensure whether the Spanish simplified procedure is also acceptable indifferent countries within the UCT. And at this point my critique is addressed to the European Commission since the Union Customs Code is a EU Regulation (not an EU Directive) and, as such, is directly addressed to the citizens of the Union (not to the EU countries), therefore, it should be directly applied with a uniform criterion in all countries forming the Union.
The clarification of those criteria (not only TA but also other Customs regimes as the “return goods relief”, “inward processing relief”, etc.) to be applied homogeneously in all the EU countries is a pending mission of the European Commission. It would be desirable to devote time to provide clear guidelines since these are matters which generate great controversy and create lots of legal uncertainty and inefficiencies the UCT.
Miguel Ángel Serra Guasch
Partner at Albors, Galiano&Portales
Lawyer – Economist
 Based on article 141 of the same text, an alternative option instead of filing Annex 71-01 form is passing the vessel through a harbour with customs facilities and keep evidences of it (fuel, mooring, etc.). The European Commission have asked the Customs authorities to be flexible with these means of evidence.
 Directives does not apply directly, they are addressed to the to EU countries, which must first transpose them to their internal legislation. Additionally, Directives are a standard of outcome, which does not instruct on the formal or material elements of the process by which each State is to carry out, therefore, as a difference with the EU regulations, Directives leave some spaces for the legislation of each country.