Entry into force of the new Regulation of Yacht Chartering in the Balearic Islands
On the 5th May, the local government passed new legislation that will regulate yacht chartering activities in the Balearic Islands from Sunday 7 May 2017.
This is good news for the sector given that this new piece of legislation is an important step in simplifying, rationalising and unifying the procedures for the performance of these activities.
The most salient points of this new piece of legislation are:
- The decree unifies in a single piece of legislation, all prior regulation that was dispersed in various pieces and terminologically out-dated especially after the entry into force of the new Spanish Shipping Act (SSA) on 25 September 2014. This change undoubtedly reinforces legal certainty for operators.
- As expected, the possibility of chartering yachts that are not registered in non-EU or EEA (European Economic Area) countries is maintained in the same terms provided for in the previous legislation (Circular 1/2004 of 26 of August).
This measure, which was introduced in order to adapt our legislation to that of our neighbours and principal competitors (France and Italy), is now introduced in a piece of legislation that ranks higher within our legal system
- The affidavit of responsibility regime expands its scope and is now applicable to non-EU or EEA flagged yachts too.
Before the entry into force of the decree, these yachts required a special licence issued by the General Direction of Ports and Airports of the Balearic Government. As a result, the procedures have been unified and simplified, shortening the time frames to commence the activities.
- The documents that an owner that wishes to charter his yacht is required to carry remain practically unchanged. However, the following is worth noting:
- The decree has removed the obligation to purchase passenger liability insurance given that it is not required by the SSA;
In our view, the removal of this obligation is unlikely to change the position substantively due to the obvious need of the owner to obtain cover for the risks to which he remains exposed.
- Translation of foreign documents will no longer be required.
Only when the administration exercises its verification activities will they be entitled to request translation of the documentation. In any event, translations of documents issued by other EU authorities will not need to be sworn (as provided by the Act 17/2009 of 23 November incorporating the EU Directive 2006/123/CE “Bolkstein Directive”).
- Both the affidavit of responsibility and the renewals requested after 1 January 2018 will have a two-year validity period, as opposed to the 1 year period provided for in the previous legislation.
This is a substantial improvement. However, those affidavit of responsibilities and renewals requested prior to 1 January 2018 will still have a 1 year validity period, which in practice means postponing the applicability of the new time frame to 2018.
- Those yachts registered in the Special Registry of the Canary Islands (REBECA) will also be capable of performing chartering activities. This was not possible under the previous legislation.
- Lastly, the new piece of legislation creates the Balearic Registry of Chartering Owners of Yachts, a public registry of administrative character in which the companies that have signed the affidavit of responsibility will appear. This registry is directed towards controlling illegal chartering activities (especially in the case of smaller yachts) hence improving legal certainty and consumer protection.
Lastly, it is worth mentioning some changes to the text that were approved during the relevant public consultation procedures:
- Firstly, as set out above, the need to purchase passenger liability insurance has been removed;
- Secondly, the possibility of chartering yachts with crew spaces is also removed.
- Thirdly, the consequences of “non-fundamental” errors and omissions during the process of verification of the affidavit of responsibility have been toughened. Whilst the previous text envisaged a procedure to amend the mistake, the final text envisages the suspension of activities, but with a right to a prior hearing for the interested party.
The main associations that form part of the yachting industry have had a voice during the consultation and elaboration of the decree. It is worth making a special mention to ANEN (Spanish Association of Nautical Companies) and AEGY (Spanish Association of Super Yachts), both acting in conjunction further to their cooperation agreement signed on July 2015, and AENIB (Balearic Association of Nautical Companies), member of ANEN.
In sum, good news for the sector, which continues the positive path promoted by ANEN in October 2013 with the removal of the 15-meter maximum length for the exemption of the registration tax (IEDMT) for those yachts exclusively dedicated to chartering activities in the Spanish territory.
Miguel Ángel Serra Guasch
Lawyer – Economist
Partner of Albors Galiano Portales