Reed Smith Client Alerts

Although the EU-UK Trade and Cooperation Agreement (TCA), which was published on December 24, 2020 and entered into force on January 1, 2021, has provided a degree of certainty, the reality is that it has redefined nearly half a century of common regulatory efforts and created a less streamlined and more complex landscape in times of unprecedented economic uncertainty caused by the global COVID-19 pandemic.

In this short update, we highlight the key changes affecting aviation, shipping, and road transportation.

Authors: Sally-Ann Underhill Adam Swierczewski Richard M. Hakes Ashleigh Standen Peter Ferrigno Yves Melin

Aviation

The TCA confirms that UK airlines can continue to fly to the EU, with intermediate stops on the way to a non-EU ultimate destination. However, rights to pick up member state passengers, baggage, cargo or mail for compensation or to fly a route segment entirely within the EU no longer exist (although note that certain code-share and blocked space arrangements are permitted).

EU air carriers must be majority-owned and effectively controlled by EU member states, EEA member states, Switzerland, or nationals of such states (and so no longer including UK nationals), meaning that some carriers have amended their voting rights to meet these requirements. However, the TCA also acknowledges the benefits of the “continued liberalisation of ownership and control” of air carriers, and notes that the Specialised Committee on Air Transport will examine options for further liberalization over the next 12 months, which may result in amendments.

Shipping

Section 6 of the Trade In Goods part of the TCA regulates what has been defined as “international maritime transport services.” These include “transportation of passengers or cargo by sea-going vessels…including the direct contracting with providers of other transport services, with a view to covering door-to-door or multimodal transport operations under a single transport document.”

Access to ports, the use of port infrastructure and associated services are preserved on a “commercial and non-discriminatory basis” by article 5.46.

Accordingly, the TCA largely maintains the pre-Brexit arrangements and is likely to result in relatively little regulatory impact on ship operators trading between the UK and the EU. However, there may be consequential issues to address contractually and we comment on those further below.