The Central Legislative Department of the Customs Agency has provided someimportant clarifications on the temporary admission of yachts from outside the EU
by Federico Santini*
WITH A RECENT MEASURE ON THE SITUATION REGARDING the temporary admission of yachts flying flags of countries outside the EU, the Central Legislative Department of the Italian Customs Agency, following a request made by UCINA Confindustria Nautica, has provided some important clarifications about the procedure for “oral customs declarations for temporary admission” covered by article 212 of EU Delegated Regulation 2446/2015, which lays out some provisions of the EU Customs Code (EU Regulation 952/2013).
It is first worth saying that, based on these EU rules, yachts flagged in a country outside the European Union are free to sail in the territorial waters of the Union in a “temporary admission” regime, with full exemption of customs importduties, provided that the following conditions are met:
1) the yacht is flagged outside the EU customs area;
2) the flag registration is in the name of an individual residing, or corporate entity established, outside the European Union;
3) the yacht is used by persons residing outside the EU customs area. The temporary admission regime is limited to a period of stay in EU territorial waters of 18 months (“Period for Discharge”) within which the yacht has to be transferred out of the territorial waters, andcan then re-enter so that a new period for discharge can start.
It is important to stress that should the period for discharge expire without the yacht being transferred out of European waters, the owner will be criminally liable for smuggling, unless theowner has definitively imported the yacht and paid VAT and import duties, or has applied a different customs regime.
But how should an owner certify the starting date of the period for discharge? In relation to this, article 136 of the delegated regulation mentioned above provides for the filing by the owner of a declaration, which can even be oral, with the Customs Office of the first port of entry in EU territory. However, the Italian Customs Agency did not issue any ruling on operating procedures to adhere to this measure.
This gap has been filled by the recent notice from the Central Legislative Department of the Italian Customs Agency, which clarifies that the filing by the owner of the “oral customs declaration” referred to in article 136 of the delegated regulation is to be considered an option rather than an obligation, since the mere act of entering EU territorial waters means that the “temporary admission” regime is automatically applied.
The same measure further clarifies that, should the owner choose to file an oral declaration in order to get a formal confirmation from the Customs Agency of the exact date of entering EU territory – and therefore the starting date of the period for discharge – then schedule 71-01RD can be used, without any requirement for additional securities, by providing evidence that the conditions mentioned above have been met so as to benefit from the temporary admission regime and as proof that the yacht comes from outside the EU.
The form for schedule 71-01 RD is composed of a first part to be filled out by the owner indicating the owner’s details, the details of the yacht to be admitted to the temporary admission regime (name, model, length, flag and official registration number, IMO number), the fact that it is to be used for pleasure and details of the 18-month period for discharge and expiry date. The second part of the form is to be filled out by the Customs Office.
It is worth mentioning that the new EU Customs Code has significantly limited cases in which the period for discharge can be interrupted, and in particular has cancelled previous provisions which allowed this period to be extended while the vessel remained in EU territory but was kept in storage. However the owner may still apply for a postponement of the period for discharge if the vessel undergoes maintenance and refitting work.
* Federico Santini: he is managing partner of the Santini & Partners Law Office in Rome. He is specialized in international law and maritime law, has consolidated experience in the yachting field especially in terms of super yachts transactions, the registration of yachts, international arbitration, insurance issues and tax related . He is a member of the Italian Association of Maritime Law and advisor for the most important law offices and of the international associations. For information or clarifications: [email protected]t
(Yacht outside the EU, this is how temporary admission works – July 2019)