In the late 1990s, among other initiatives, Europe decided to promote the creation of the single aviation market and the Single European Sky initiative.
The “Single European Sky” initiative aims primarily at reducing the fragmentation of European airspace, thereby increasing its capacity and the efficiency of air traffic management and air navigation services by reducing flight times, reducing flight costs and aircraft emissions, separating regulatory functions and service provision, interoperability of equipment, harmonised upper airspace classification and establishing common requirements for the licensing of air traffic controllers.
Until the late 1990s, air transport was carried out under the supervision and control of the national authorities of each country, and international air transport was mainly based on bilateral agreements between countries.
The evolution in Europe came with the signing of the “Single European Act” when national markets became a single competitive market for air transport. At that time, national airlines gave way to Community airlines and it was established as a basic principle that any Community airline could freely set fares for passengers and cargo, as well as access any route within the European Union, without any express permission or authorisation.
Both the European Parliament and the European Council have been key in this context. Indeed, the Treaty on the Functioning of the European Union recognises in article 100.2 the ability of the European Parliament and Council to lay down such provisions as they deem appropriate in relation to aviation.
In the field of the common conditions of competition, some of the common rules adopted to ensure the proper functioning of the European aviation system would be:
- The proposal for a Regulation on safeguarding competition in air transport and repealing Regulation (EC) No 868/2004 was published in June 2017.
- Regulation (EEC) No 95/93 and its amendments.
- Directive 96/67/EC.
- Directive 2009/12/EC.
- COM (2017) 0289, mechanism to ensure fair competition between Union air carriers and third countries.
In the area of passenger protection, the steps taken and to be assessed are:
- Creation of a European Aviation Safety Agency (EASA).
- The harmonisation of security requirements in all European Union airports.
- Regulation (EC) No 261/2004, aimed at protecting passenger rights.
These initiatives are expected to bring benefits for operators, carriers, passengers and shippers. Benefits such as tripling airspace capacity by 2035, reducing the cost of air traffic management, multiplying the safety of the sector and even reducing the environmental impact of air aviation. Examples of some of the improvements that can already be observed to date include:
- The reduction of the average en-route delay caused by traffic flow management.
- The decrease in average arrival delay caused by air traffic flow management.
- The average length of the direct horizontal route has started with a downward trend.
- The improvement of cost efficiency.
However, there are still some areas for further improvement, such as the shortcomings of the slot allocation system; avoiding that most routes departing from an airport in the Union continue to be operated by only one or two airlines; reducing the financial difficulties faced by airlines and some airports (which have increased alarmingly in these complex times of pandemic we are experiencing); improving the supervision of some airlines currently operating in some Member States.
There is no doubt that European airspace has developed to an important extent in recent years, creating a trend that has not yet been implemented in other continents despite the great efforts that have been invested in this direction.
Although there is still a long way to go, global airspace is moving towards union, transversality and sustainability, thus facilitating the intermodality of means of transport, the reduction of costs (economic, personal and environmental), as well as the development of new technologies, which undoubtedly results in a more positive progress of society.
The European Union ended the year 2020 with breaking news. It was the agreement reached “in extremis” with the United Kingdom on the management of trade relations after 1st January 2021; the date on which, after approximately 4 years of extensions and postponements, BREXIT would finally enter into force.
After arduous negotiations, on 24th December, Ursula Von der Leyen (President of the European Commission) and Boris Johnson (Prime Minister of the United Kingdom) announced that an agreement had been reached, avoiding so the much feared “Hard Brexit” or “extreme Brexit”, whereby the United Kingdom would leave the European Union without a previous agreement.
There is no doubt that the close trade relations that exist between the two territories have produced significant pressure which has led to this final agreement. In any case, whether by means of a global agreement or by means of sectoral agreements, trade relations with the United Kingdom would ultimately be signed since UK is a vital trading partner for the European Union. In fact, for Spain, the United Kingdom is the fifth in the scale of its trading partners, moving (between imports and exports) over 32 billion Euros during 2019.
The importance of this agreement arises, to a certain extent, from the fact that thanks to it, bilateral trade relations can be maintained without customs duties or quotas, an aspect that is of particular interest to exporters and importers, but which in general affects the whole society, since the costs to be assumed in import operations, as well as in export operations, will always have an impact on the final cost and customer. However, this agreement does not prevent bureaucratic, administrative, and fiscal procedures from being multiplied due to this departure. Examples of it are customs declarations, sanitary and phytosanitary controls, and the payment of VAT on the declared value of the goods at the time of import.
In other words, since 1st January 2021 the United Kingdom is a third country for the European Union, and as it happens with goods entering and leaving third countries outside the EU, the Spanish Customs Authorities will have to ensure that they are informed on and have control of the goods that are to be introduced into their territory and, consequently, into the European Union.
This information about entries and exits will generally be provided by the company carrying out the transport of the goods (shipping companies, airlines, or land carriers) and must coincide with the presented customs declarations. In fact, efficiency and speed in the transmission of this information will be key to facilitating border formalities and thus avoiding discontinuities and delays, which for now are unavoidable. Companies that usually trade with importers or exporters from third countries outside the Union are already aware of the formalities required for these operations.
TRADE AND COOPERATION AGREEMENT BETWEEN THE EUROPEAN UNION AND THE EUROPEAN ATOMIC ENERGY COMMUNITY, ON THE ONE HAND, AND THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, ON THE OTHER HAND
With respect to the Agreement reached, we would like to highlight its second part, which includes aspects related to trade, transport, fishing and other provisions that are of interest to our sector with the aim of facilitating trade of goods between the parties and maintaining liberalized trade to the extent agreed in the Agreement.
To this end, different aspects are addressed, such as:
- The recognition of the freedom of transit through their territories to persons with nationality of either Party.
- The prohibition of customs duties, that is, a Party may not adopt or maintain any duties, taxes and other charges imposed on the exportation of a good to the other Party or in connection with such exportation, or any tax that is higher than the tax or charge that would be imposed on similar goods but destined for domestic consumption.
- With respect to taxes and charges, the Parties may not assess these amounts ad valorem, but may simply charge such taxes and charges limited in amount to the cost of the services rendered and shall not constitute indirect protection of domestic products. There are exceptions for some specific services.
- Agree that the Parties may not impose restrictions, prohibitions or monopolies on imports or exports of goods destined for the territory of the other Party (except Article 11 of the GATT 1994).
- That each Party shall determine in its territory the customs value of the goods of the other Party.
- To create rules for determining the origin of goods for the purposes of applying preferential tariff treatment and to establish origin procedures.
- Agree on the sanitary and phytosanitary measures to be applied on goods imported into the Parties to this Agreement.
- Ensure customs cooperation for trade simplification. To this end, measures such as the rapid release of goods, the presentation and advance electronic processing of documentation, the promotion of the association of authorized economic operators, the establishment of the single window, the facilitation of roll-on-roll-off traffic, etc., are taken.
Although this agreement regulates many aspects of interest for the sector, there are other things that it does not resolve and that are fundamental for the correct development of commercial relations. In particular, we would like to make special mention of the exequatur or recognition of foreign judgments, as well as the jurisdiction applicable in the resolution of disputes between the Parties.
Given the transcendence that an incorrect choice of the applicable jurisdiction may imply for the subjects involved in international trade operations, from AIYON Abogados we would like to recommend all agents involved in trade with the United Kingdom, before starting a new commercial relationship, to make express agreements where the jurisdiction to which they will submit their disputes is agreed. In case of pre-existing commercial relations, we recommend analysing whether the jurisdiction agreed upon at the time is still the best for the defence of their present and future commercial interests.
On Wednesday 8 July 2020, Royal Decree Law 26/2020, was published in the Official State Bulletin, with the aim of approving a set of measures required for the purposes of economic recovery in the transport sector and in the field of housing, protecting the health of workers and travellers, guaranteeing the availability of essential goods and services, providing liquidity to companies and reducing administrative burdens.
In this article, we will analyse this regulatory text, focusing on the specific measures arising for the transport service.
1. AIR TRANSPORT
Articles 2 to 7 include the management measures adopted for air transport. General prevention measures against COVID-19 that companies in the sector must guarantee compliance with, as well as all those that the Autonomous Communities have adopted.
Operational guidelines have been established from Europe, which are applicable to the entire Spanish territory. The EASA/ECDC Guidelines will be compulsory not only for airport managers but also for companies that carry out their work as auxiliaries at airports:
– Inform users on the preventive measures and health reasons why they should refrain from accessing the airport, as well as the consequences of detecting a person suspected of having COVID-19 during health checks.
For its part, the Transport Facilitation Committee will be responsible for coordinating and supervising all the actors who have a role in the application or definition of these measures.
2. MARITIME TRANSPORT
Articles 8 to 14 set out the measures taken to revitalise the maritime sector. Firstly, the reasoned reduction of maritime traffic requirements for 2020 at the request of the concessionaire will be permitted, due to the impossibility of compliance (deriving from COVID-19).
Likewise, the liquid quota of the occupation rate accrued during the financial year 2020 may be reduced, being determined this reduction depending on the decrease in maritime traffic or, failing this, on incomes attributable to the activity, the different types and also depending on the economic and financial situation of the Port Authority.
With regard to the activity tax, the Port Authorities may (upon request of the taxpayer) leave the lower limit of the annual activity tax quota without effect for the year 2020. In turn, the enforceability of the activity fee established in the authorisation may also be modified.
As we have already commented in other publications, this Royal Decree confirms that the fees for vessels (between 1 March 2020 and 31 October 2020) may be modified, depending on the reason for the stay in port waters. Likewise, the Port Authorities may grant deferrals of tax debts accrued (between 1 March and 31 October 2020) and not paid.
As a final comment, it should be noted that the provision of human resources at the passenger terminals serving the regular maritime services during the state of alarm, are considered as emergency services for all purposes.
3. RAIL TRANSPORT
With regard to Railway Transport, it should be mentioned that RENFE is authorised to arrange credit operations during the 2020 financial year, for the amount of 1 billion euros.
It is also planned to authorise extraordinary credits to be financed with Public Debt.
4. ROAD TRANSPORT
Articles 18 to 30 contain the provisions relating to road transport. Firstly, moratoriums will be granted for the public goods and occasional passenger transported by bus.
Among other measures, deferrals of payments of instalments on loan, leasing and renting contracts used by self-employed persons and public undertakings for the purchase of buses and public transport vehicles of more than 3.5 tonnes, maximum authorised mass, are accepted.
With regard to the approval of road transport authorisations, this will be extended, establishing 2021 as an open deadline for approval of transport authorisations that should be endorsed in 2020 and have not been yet. Also, for those authorizations that should be endorsed in 2020 and have done so, the deadline for their next endorsement is extended until 2023. In addition, the opportunity to apply for extraordinary rehabilitation for public transport authorisations invalidated during 2020 is provided due to the inability to certify the requirements for their endorsement.
Finally, an extension of 3 months is established for those technical inspection certificates of vehicles that expire between 21 June and 31 August.
One of the main reasons why the Spanish Government advocates maintaining the State of Alarm is to be able to guarantee restrictions on citizens’ mobility, both in and beyond their territory.
At national level, the Ministerial Order TMA/400/2020, of 9 May, which establishes the conditions to be applied in the first phase of the de-escalation of mobility, was approved. In order to guarantee the mobility of the Canary and Balearic Islands by means of Air Transport, it has been decided, among others, to lift the ban on regular commercial operations between islands, to establish a minimum of daily frequencies, always guaranteeing the safety distance, as well as to keep the Directorate General of Civil Aviation (DGAC) informed.
With regard to Railway Transport, either in suburban trains or in any other state-owned service, it has been agreed to gradually increase it until the effective recovery of 100% of its services and lines.
If we refer to the Maritime Transport of the Balearic and Canary Islands, specifically in the Canary Islands:
1) The disembarkation of passengers from RoRo passenger ships that provide regular services between the Peninsula and the Islands is prohibited, with the exception of drivers on board of ro-ro cargoes.
2) The Autonomous Community of the Canary Islands is authorised to lay down conditions for the provision of regular inter-island services or shipping lines.
3) The following vessels and boats may navigate between ports or points on the coast of the same municipality and nearby inhabited islands
– Those of tourist transport of passengers.
– Those devoted to practical trainings and courses.
– Those used for recreational/sports purposes by their owners or in nautical rentals.
If we focus on the Balearic Islands, and conditioned to guarantee health protection measures:
1) Transport on lines between the Peninsula and the Balearic Islands is authorised.
2) The embarkation/disembarkation of passengers and vehicles is permitted on RoRo passenger ships and passenger ships providing regular services on the inter-island maritime lines of the Autonomous Community.
3) Recreational sailing is permitted between points on the coast of the same municipality and nearby uninhabited islands.
On both islands, the above restrictions shall not apply to state ships or cargo ships, or to ships sailing for humanitarian, medical or emergency purposes.
At international level, three Ministerial Orders have been agreed which directly regulate entry to and exit from the country by the different means of transport (Order INT/396/2020, of 8 May, Order INT/409/2020, of 14 May and Order TMA/410/2020, of 14 May), and a fourth additional one (Order SND/403/2020, of 11 May).
Order INT/396/2020, of May 8, extending internal border controls and maintaining limited access, among others, for Spanish citizens and residents in Spain, cross-border workers, persons traveling for exclusively work purposes. It is important to note that these restrictions will not affect the transport of goods. Under the heading “transport of goods” we must also consider the crew members of ships in order to ensure the provision of maritime transport services and fishing activities, and the aviaiton personnel necessary to carry out commercial air transport activities.
The restrictions set out in this order are complementary to those already established at land borders and at the external borders of ports and airports (originating in countries outside the Schengen area).
Order INT/409/2020, of 14 May, extending the criteria for the application of a temporary restriction on non-essential traveling from third countries to the European Union and associated Schengen countries for reasons of public order and health, as a result of the health crisis caused by COVID-19.
Entry shall be denied on grounds of public policy and public health in connection with the health crisis caused by COVID-19 to any third-country citizen, subject to the proposed exceptions which include habitual residents in the European Union, the Schengen associated States or Andorra, cross-border workers or personnel engaged in transport of goods in the course of their work (ship and flight crews). This shall not apply at the land border with Andorra or at the checkpoint of persons with the territory of Gibraltar.
The Order TMA/410/2020, of May 14, which limits entry to aircrafts and passenger ships restrictions on mobility of citizens through designated points of entry with the capacity to respond to public health emergencies of international importance, updated by Order TMA/415/2020 of May 17, which aims to designate the ports and airports that will be enabled as the only point of entry into Spain, for passenger flights from any airport located outside Spanish territory or for passenger ships or passenger vessels and ROROs that provide a regular line service originating in any port outside Spanish territory (provided that the passengers transported are not the drivers of the road vehicles). Specifically, the airports of “Sevilla”, “Menorca”, “Ibiza”, “Lanzarote-César Manrique”, “Fuerteventura”, “Tenerife Sur”, “Alicante-Elche” and “Valencia”, and the ports of Barcelona, Bilbao, Las Palmas de Gran Canaria, Málaga, Palma de Mallorca, Tenerife, Valencia and Vigo will be operational.
These limitations do not apply to State aircrafts or vessels, aircrafts making stopovers for non-commercial purposes, exclusive cargo flights or vessels, or positional, humanitarian, medical or emergency flights or vessels.
Bearing in mind, in any case, the Order SND/403/2020, of May 11, by which all persons coming from abroad will be quarantined for 14 days after their arrival; order that came into force on May 15.
With regard to the maritime transport sector, there have been abundant Ministerial Orders and recommendations of the Ministry of Transport, Mobility and the Urban Agenda since the State of Alert was decreed on 14 March. Therefore, we have decided to emphasise two Ministerial Orders, Order TMA/419/2020, of 18 May, and Order TMA/374/2020, of 28 April, for their relevance.
If we delve into its content, the Order TMA/419/2020, of 18 May, which updates the measures in general management of maritime navigation adopted during the state of alarm to deal with the health crisis caused by the COVID-19 to the de-escalation process. It presents restrictions on the entry of ships into Spanish ports (i) for cruise ships from any port; (ii) for foreign ships or recreational vessels that do not have their port of stay in Spain (with exceptions).
On the other hand, it regulates the management of ballast water and ship sediments, the procedures to be followed for the transfer of ships, whether for repair or maintenance purposes or for sale and purchase, and the transfer of ships between ports. In addition, in its Single Repeal Provision it repeals certain Orders and modifies Order TMA/258/2020, of 19 March, by rewriting the article on titles whose validity is extended and on inspection activities.
On the other hand, Order TMA/374/2020, of 28 April, which establishes the documentation with which the crew members of the vessels may prove their condition in order to facilitate their movement to ensure the provision of maritime transport services, due to the health crisis situation caused by the COVID-19. The order stipulates the necessary documentation to allow changes of crew in Spain and the return to their countries of residence or boarding another vessel calling at a Spanish port. Specifically:
– Certificate of Competence or Seafarers’ Identity Card or Discharge Book
– Employment agreement or letter of appointment. This documentation shall include at least the name of the vessel and its flag, the port where the vessel is located and the estimated date of embarkation/disembarkation.
Likewise, the Ministry of Transport, Mobility and Urban Agenda has published preventive recommendations to be implemented in maritime passenger stations and on board of the ships for the restart of passenger traffic in order to prevent and minimize the risks of possible COVID-19 infections when passenger traffic is re-established.
Maritime Administration Inspection activities / Administrative Certificates
Due to the exceptional situation generated by COVID-19, the Administration has taken action by extending the validity of certain administrative titles and suspending significant part of its inspection activities.
The titles whose validity is extended if they expire during the State of Alarm are: (i) professional cards and certificates issued to seafarers, as provided for in international conventions and national regulations; (ii) certificates and documents issued to ships governed by international instruments of the IMO, ILO and the European Union; (iii) certificates and documents issued to ships and vessels operating services, as provided for in national regulations; (iv) certificates of maritime training issued to seafarers in accordance with the STCW Convention and health regulations; (v) certificates of medical fitness issued to seafarers in accordance with the STCW Convention and national regulations; (vi) certificates of medical fitness issued to seafarers in accordance with the STCW Convention and national regulations; (vii) fitness certificates expired during the State of Alert.
In addition, the conduct of scheduled inspections and surveys by the Maritime Administration, as provided for in the Regulations on Inspection and Certification of Civilian Ships, has been suspended, unless they result from emergency situations, and the conduct of periodic inspections of foreign ships, with the exception of those to (i) ships subject to a report or notification by another Member State; (ii) ships which cannot be identified in the inspection database; (iii) ships which have been involved in a collision, grounding or stranding on their way to port; (iv) ships which have been accused of violating allegedly the provisions in force concerning the discharge of hazardous substances or effluents; (v) ships which have manoeuvred in an erratic or unsafe manner.
On April 4th, the President of the Spanish Government announced his intention to request the Congress of Deputies to agree to the extension of the State of Alarm for at least 15 days more. Therefore the State of Alarm, enacted on March 14th, will be maintained until midnight of April 25th.
His petition seems to have the support of the leaders of the rest of the political forces in the State; nevertheless, the extension will not be made official until it is approved by the Congress of Deputies at the forthcoming plenary session scheduled for April 9th.
However, and as the President Pedro Sánchez has already announced, the extension of the State of Alarm does not necessarily imply the extension of the suspension of non-essential activities, a suspension tackled in our publication of April 2 (RDL 10/2020 of March 29th – Suspension of Non-essential Activities) that, since these restrictive economic measures were made public, has received a lot of criticism and pressure to analyse its possible moderation or suppression. Both on part of the industries that asked to maintain their essential activities in order to prevent the total economy freeze, and the political forces in the country. Therefore, and depending on the decisions made by the Government, these non-essential activities might be reactivated from April 9th.
As we have seen, during the three weeks of the State of Alarm that we have already undergone in Spain, this situation is having an enormous impact on all social and economic sectors in Spain and, in particular, the sectors of industry, commerce and trade, and a part of the transportation sector have been severely hit by this situation.
The Ministry of Agriculture, Fisheries and Food published Order APA/315/2020 of April 1st in the BOE (Official State Gazette). This Order establishes new criteria for the management of fishing quotas assigned to the Kingdom of Spain in order to optimize their use and modifies certain Ministerial Orders that regulate these concepts since 2014.
This Order is mainly applicable to the stocks subject to the total allowable catches and quotas in the peninsula waters of the Atlantic Ocean.
These are the main measures that have been taken:
- Flexibilization of the transmissions of fishing possibilities (quotas) for the vessels with individual distribution, thus allowing a better adaptation to the fisheries within the previously established distribution, that is to say, that the vessels themselves through the transmissions regulate the distribution of quotas. Those operating in the Bay of Biscay and the Northwest, Gulf of Cadiz and those trawling in Portuguese waters.
- Establishment of a mechanism for the annual optimisation of the boilermakers’ quotas. As of October 1st, vessels that have already exhausted their quotas will be able to continue fishing and using the quotas that will be left over for other vessels, thus guaranteeing the full use of the quotas allocated.
- Establishment of procedures for the management of quotas allocated to Spain but which, until now, have mostly not been established.
- Establishment of criteria for the annual allocation of quotas not yet allocated in Spain, (blue whiting or horse mackerel in EU waters and swordfish in the North Atlantic).
- Establishment of uniform procedures for the cessation of activity and the closure of fisheries in cases where quotas have been exhausted.
- Establishment of management measures for recreational fisheries for sea bream in the Cantabrian Sea.
The Order APA/315/2020, of April 1st, reinforces Spain’s commitment to sustainable and responsible fisheries management and shows progress in the regulation regarding the fishing quotas assigned to Spain.
Many measures are being taken with regard to land transport as it is an essential resource to secure the local supply chain, above all on local and national level.
Administrations are beginning to ensure the protection of truck carriers by distributing personal protective equipment by enabling filling stations and providing places for weekly rest of at least 24 hours.
Likewise, the National Road Transport Committee communicated to the Ministry of Transport its commitment to maintain transport and guarantee the supply of medicines in hospitals during the Easter weeks.
For its part, rail transport is also adapting to this situation and some initiatives are already beginning to be made public, such as adapting trains of the Operator Renfe for the transport of patients affected by COVID-19 between different autonomous communities.
The Spanish airports are adapting to the COVID-19, among other forms, by enabling their esplanades to offer parking to the planes that, due to the evident reduction of flights, are not operating and therefore have to remain on the ground.
Since the health emergency does not only affect Spain but it is a global phenomenon, many flights and many regular lines operated by air operators will be suspended for an undefined period of time.
With regard to maritime transport, it is important to highlight the change of direction that the maritime industry is taking in order to face the pandemic.
Many shipping companies are temporarily suspending some of their usual shipping lines, as well as adapting their rotations to the progressive increase in Asian imports to the demanding European continent. This increase is materialized in the fact that rates from the Mediterranean to the Far East have increased by 42.4% and in the oil price crash.
Although there are shipping companies that have decided to suspend temporary their services with stopovers in Spanish ports, there are still sufficient services to guarantee the supply chain.
For its part, the Spanish ports have been taking measures to mitigate the effects that might arise from abandonment of goods and containers in the ports (in many cases forced). Let us take as an example the Port of Barcelona that has implemented the so called “flat rate” regarding the cost resulting from storage of the containers in the ports with the aim to mitigate the economic impact that COVID-19 is producing in the importing companies.
This measure adopted by the Port of Barcelona shall be applicable to the import containers located in the container terminals of the enclave between March 31st and April 13th (for the time being). According the experts’ estimation, the cost of storage of the containers will be reduced by 65 % as a result of these measures.
As we can observe, all sectors are renewing and readapting themselves in this uncertain and unknown situation we are just undergoing in order to guarantee the supply chain of products and materials, securing so that basic needs of the citizens are met and that the industries, to the maximum possible extent, continue operating.
The recent Royal Decree Law nº 10/2020, of March 29th orders the suspension of companies and non-essential works as a consequence of the declaration of the state of alarm issued on March 14th, an order that certainly affects both the economy and society in a global way.
This suspension will last 11 days, from March 30th to April 9th, both inclusive, establishing that March 30th is considered a day of adaptation to enable the closure of all non-essential activities that shall be suspended in the following days. During this period the remuneration of the employees will be secured by means of the “recoverable paid leave”, as approved by the Government on March 29th.
The problem is that the classification of activities which are considered essential and those which are not has caused controversy the first day of the shutdown. Consequently, the Government issued the Order SND/307/2020, of March 30th, which establishes the imperative criteria for application of the Royal Decree-Law 10/2020, of March 29th, and the model of statement of responsibility which allows the necessary journeys between the worker’s residence and the workplace, which supplements the RDL but without clarifying all the questions and doubts arising from the very same RDL.
Let us recall that the Royal Decree law 463/2020, of March 14th, by means of which the state of alarm was declared in order to manage the health crisis situation caused by COVID-19, states that the supply of the population must be guaranteed at all times, by facilitating and ensuring the transport of goods throughout the national territory. On this basis, it should be noted that land transport companies and those companies related to maritime and air traffic pursuing or enabling this aim (without being this a limiting list), as well as the facilities providing these services shall guarantee their activity throughout the whole period of the state of alarm. In fact, Mrs. María José Rallo, the Secretary General for Transport, declared that transport is obviously included within the essential activities, and State Ports has initiated an information campaign to emphasize the functioning of the state port system to guarantee the distribution of essential items and goods during the COVID-19 crisis.
Abiding to the sixth point of the annex of the RDL nº 10/2020, states: “The recoverable paid leave regulated by this royal decree-law is not applicable to the following employees: 6. Those who carry out transport services, both for people and goods, which continue to be carried out since the declaration of the state of alarm, as well as those who must ensure the maintenance of the means used for this purpose, under the protection of the regulations approved by the competent authority and the competent authorities delegated since the declaration of the state of alarm”.
Similarly, article 4 of the RDL 10/2020 specifies what shall be understood as the minimum indispensable activity: “The companies that must apply the recoverable paid leave regulated in this article may, if necessary, establish the minimum number of staff or work shifts that are strictly indispensable in order to maintain the essential activity. This activity and this minimum number of staff or shifts shall be based on the activity carried out during an ordinary weekend or on public holidays”.
Therefore, in accordance with the sixth point of the annex of the RDL nº 10/2020 (which regulates the non-application of the paid leaves regulated in the present Royal Decree-Law) the port services are considered essential services (art. 18 of the Royal Decree, of March 14th), being some of them even mandatory for the vessels when in ports. Moreover, we must understand that all the State Ports of General Interest are strategic infrastructures by their very definition, some of them also being critical infrastructures. All of them are guarantors of operation of services that are defined as essential and must therefore continue to operate, guaranteeing supply by facilitating the flow of goods in them.
The same interpretation shall be applicable to the companies that provide their services there:
– The commercial procurement service.
– The commercial supply service.
– The ship agency service.
– The commercial inter-port transport service.
– Port handling operations (dockers, etc.).
– The port passenger service.
– Mooring and unmooring service.
– The port towing service.
– The port consignment service.
– General services provided directly by the Port Authority or indirectly by third parties.
– The rest of the commercial activities related to the port activities, such as freight forwarders, customs agents, damage commissioners, container depots, etc.
With regard to road transport of goods, it is also asserted as essential and its workers can continue with their activity under the new exceptions to the compliance with driving and rest times implemented between March 29th and April 12th, both inclusive (Resolution of March 26th, 2020, of the Directorate General for Land Transport), and with the acceleration of driving facilitated by the so called cross-border “green lanes”.
We should point out that transport activities remain fully operative as long as these are related to other essential economic activities (distribution of food and healthcare products, among others). What is more, the RLD n. 10/2020 is only applicable to the salaried employees, which means that the self-employed remain active except for those performing services for companies that were, on March 14th, classifies as no-essential and remain closed: restaurants and hospitality companies, sports companies, among others.
What are Incoterms®?
The increase in the volume and complexity of the sales of national and international merchandise has generated a growth in the misunderstandings and litigation that can always arise between the parts of a contract; with greater reason when the two main parts of a contract, seller and buyer, are located in different countries.
Already in 1936, and in order to facilitate international trade, Incoterms® were born from the hand of the International Chamber of Commerce (ICC). Rules that, applied to a contract of sale, help to define the obligations and responsibilities that each of the parties assumes in the business they jointly undertake. So, the Incoterms® are not a supranational legal rule, but Lex Mercatoria.
When choosing a rule adjusted to our business needs, there are many more aspects that we should take into account.
- The means of transport to be used to send the goods from the seller’s premises to those of the buyer.
- The nature of the merchandise that is the object of the sale, as it is not the same, if we have to urgently deliver perishable merchandise, send bulk merchandise on ships or carry out a palletized truck transport, among other cases.
- The means of payment agreed between the parties. In this case, the situation will be conditioned on having to make the payment by means of documentary credit with banking entities.
- The buyer’s own wishes. In fact, there is more and more competition between companies so, in many cases, the seller is forced to make the difference from their competitors.
- The situation of the countries of origin and destination of the merchandise, since it may happen that we are facing countries with protectionist tariff policies or unstable legal situations or policies.
This year the last version of these rules has been finalized, which is born under the name “Incoterms® 2020” and will enter into force on January 1, 2020.
The rules are classified in the different groups that we detail below:
|Group E||EXW||Ex Works.|
|Group F||FCA||Free Carrier|
|FAS||Free Alongshide Ship|
|FOB||Free on Board|
|Group C||CFR||Cost and Freight|
|CIF||Cost, Insurance and Freight|
|CPT||Carriage Paid to|
|CIP||Carriage and Insurance paid to|
|Group D||DPU||Delivery at Place Unloaded|
|DAP||Delivery at place|
|DDP||Delivery Duty Paid|
Among the novelties presented by this new version, the first and probably most striking is the redenomination of the rule DAT (Delivered At Terminal) that now happens to be called DPU (Delivered at Place Unloaded). This change of acronyms is a simple redenomination, since the obligations and functions of both terms remain exactly the same.
The term DPU is classified within the group of multipurpose terms, meaning that it is an Incoterm® suitable for any type of contracted transport (Road, road, air or sea transport), and is the only Incoterm® that provides that the delivery will only be carry out once the merchandise has been unloaded from the means of transport in which it has been transported. The new nomenclature that has been given to this term only evidences the fact that the merchandise will be delivered unloaded, unlike the rest of the Incoterms® in which the merchandise will be made available to the buyer at the port of destination , in the place designated by the parties.
Secondly, we must mention that in this new version of the Incoterms® when applying the Rule FCA (Free Carrier), it gives us the option, only in case that the main international transport contracted is maritime transport, that the buyer request the carrier or maritime carrier to issue a Bill of Lading on behalf of the seller, wherein the clause “on board” is included, which will record that the merchandise has been loaded on board the ship.
The introduction of this clause in the Bill of Lading or Bill of Lading will facilitate the payment made by means of documentary credit, as mentioned above.
Thirdly, in this new version it is explained precisely which party will be responsible for carrying out customs procedures, assuming the costs and risks of that phase. The responsibility will be assumed by those who are obliged to transport the goods to the designated place of delivery. Also, for the first time, the dispatch of goods in transit is included.
Finally, we want to talk about what we consider to be the most important difference that this new version of the Incoterms® 2020 rules has brought. This are the different coverages for the merchandise insurance, during their international transport under the terms CIP (Carriage and Insurance Paid to) and CIF (Cost, Insurance and Freight).
While in the CIF term the seller will contract in favor of the buyer a transport insurance with a minimum coverage of clause C of the English Institute Cargo Clauses, which does not vary from the previous Incoterms® version 2010, in the CIP term, the seller will contract for the buyer the transport insurance with a maximum coverage according to clause A of the English Institute Cargo Clauses.
Difference between CIP and CIF that is justified because CIF is commonly used for the maritime transport of bulk goods (raw materials, scrap, minerals, etc.) whose price per kilo is very low. Therefore, if insurance with maximum coverage is demanded, the policy would become more expensive, which would damage the negotiation margin of the sellers with their potential buyers.
In any case, we must not forget that the rules are part of the ancestral business of buying and selling merchandise, and will be subject to the modifications that the parties consider appropriate and determined in their contracts, within the freedom that national and international trade and rules grant them.
Yesterday, one of our partners, Verónica Meana, took part in a practical conference organized by AON under the title “CYBER DISRUPTION IN MARINE” which was held in AON’s head office in Torre de Iberdrola in Bilbao. The conference was devoted to learning about and to sharing the risks and consequences that cyberattacks constitute in transportation and industry.
Verónica had the opportunity to share the discussion panel with Max Bobys, Chris Bhatt and Nannette Wong, and in her presentation tackled administrative and civil responsibilities within transportation and logistics in the context of cyber threat, referring in particular to the maritime transportation sector and its agents.
AIYON Abogados would like to thank AON for the opportunity we were given to participate in this event, which was greatly insightful in terms of better understanding of the new and future risks that the transportation sector is facing, the ways to deal with them and the insurance options available in the market of hull and machinery, civil liability and P&I insurance.