The sale of second hand boats across the Channel has become more complicated. Alasdair Reay, CEO of HPi-CEproof Ltd, unravels the Brexit red tape
New rules to buy or sell second hand boats in Europe
British Prime Minister Boris Johnson did it, writes Alasdair Reay.
He was as good as his word and eventually ‘got Brexit done.’
News bulletins report daily the effects Brexit is having on GDP at large; on Northern Ireland; and occasionally on market sectors such as fishing.
But what about pleasure boats?
In this article we will explore two frequent questions: Have the UK’s boat builders been affected by Brexit? And has Brexit changed the rules for buying and selling second hand boats across the Channel?
If you don’t have time to read this article, my short answers are, ‘Not really’ and ‘Oh my, yes!’
The Brexit effect on UK boat builders
We’ll start with the UK boatbuilders who woke up on 1 January 2021 in a Third Country, the EU’s term for all non-member nations.
Selling a boat to Europe had suddenly rendered them an exporter, whether they liked it or not.
This brings Brexit VAT implications (which I’m not going to discuss as this fiercely complicated topic deserves its own article), and new paperwork demands.
Unlike fish, however, boats are not perishable goods and so there is plenty of time for a boatbuilder to sort out the European paperwork.
There is a new ‘proof of origin’ form but once completed for one boat, the builder has a template for the fleet. As for technical/safety regulations, these have not changed in any material way.
UK boatbuilders were obliged to comply with the EU Recreational Craft Directive (RCD) up until Brexit Day.
The new UK Recreational Craft Regulations (RCR) that have replaced the RCD in the UK are an unashamed copy-and-paste of the RCD.
So the only physical difference between a boat being sold in the UK or Europe is that the former must display a UKCA mark and the latter a CE mark.
Most UK builders are fitting both marks.
A boat that requires third-party certification must have a certificate specific to each region, UK and Europe, which adds a minimal cost for the builder.
Prior to Brexit, nearly every UK boat was RCD certified by the only UK company on the list of EU Notified Bodies: HPi-CEproof, based in Oxfordshire.
Upon Brexit, HPi-CEproof lost its licence to certify as an EU Notified Body for RCD but gained recognition as the only UK Approved Body for the new UK RCR.
But, HPi read the tea leaves and established a sister company in Ireland before the referendum. HPi Verification Services (Ireland) Ltd, is now a formally accredited EU Notified Body and ensures that HPi-CEproof’s customers are seamlessly certified for both RCD and RCR.
It is fair to say that the UK boatbuilders don’t really have any reason to complain about technical barriers to trading with Europe.
In fact, it is the other way around: Europe was so busy wagging its finger at the Brits for going ahead with Brexit, none of the EU-based Notified Bodies gave a thought to the fact that they would not be able to certify boats and products for the UK market, post Brexit.
So, there are many EU Notified Bodies desperate to establish companies in the UK at this moment.
This is happening in every sector, resulting in the accreditation process being overwhelmed, and boating is not the highest of national priorities.
Indeed, some sectors didn’t have any native UK certification bodies to issue the certificates required for the new post-Brexit UK regulations.
It is for this reason that the UK government extended the period during which a CE mark will be accepted as an alternative to the UKCA mark, to the end of 2022.
So, you may still sell a boat in the UK with a CE mark until this date, whether it is new or used.
Second hand boat sales between Europe and UK
Which brings us to the private sale of second hand boats across the Channel, as this trading niche was hit by a bombshell that nobody saw coming.
With regards to product safety compliance, the fact that the UK was ever a member state has now been erased from the history books.
The impact of this is enormous, so let’s look at some scenarios by way of illustration: If a boat was built, CE-marked and sold in the UK (whether before or after the Brexit transition) and subsequently ‘in service’ only in UK waters, the EU will not recognise its CE mark if the boat was sold from the UK to the EU today.
It would need to undergo Post Construction Assessment (PCA) by an EU-notified body: a certification process that could cost £3,000-£6,000 plus the cost of any modifications necessary to bring it up to today’s requirements.
It also means that a second hand boat that was exempt from RCD when the UK was a member state (on the grounds of the boat having been in service in the UK before the RCD came into force in 1998), would not have an exemption when sold to Europe today.
Recently, I have been quizzed about numerous potential scenarios, such as this: the owner of a CE-marked, French-built Beneteau is British, it has a CE certificate from a French-Notified Body, the boat is registered in Spain.
It was in the UK at the end of transition, and the owner wants to take it to Italy and then sell it. This sounds like a nightmare but it is very easy.
There is one simple rule: A boat must comply at the first putting on the market, or the first putting into service, whichever comes first.
Either you can prove that the boat was sold or in service in today’s European Economic Area (EEA) before the end of transition, or you cannot.
The Beneteau in the scenario above may have been built and CE-marked in France and certified by a French-notified body but none of this proves that a sale took place in (today’s) EEA or that it was ever in service there.
The boat might have been sold new by a UK dealer, shipped to a UK owner and put into service in the UK.
Can we trust a CE mark?
One could say the EU has rendered its own CE mark as not-to-be-trusted. One has to look beyond the CE mark and consider the history of each individual product to know if it is allowed into Europe.
If there is no evidence of sale or service in EEA, then PCA is needed.
This rule applies to all products being sold between the UK and Europe but boats are not like the other products covered by CE-marking directives: pressure equipment, machinery, gas appliances, personal protective equipment and so on, are all covered.
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These are not the types of product that frequently meander across national frontiers and they are rarely sold privately and second-hand, between Europe and the UK.
But our boats are.
Days after the Brexit transition, our formal request about the compliance of used boats was answered by the EU Commission’s Brexit legal team: the UK Exit Agreement applied only to new products.
This fact was not previously known either side of the Channel.
The second hand market was simply not considered during the UK-EU negotiations.
So what is adequate evidence of a boat having been sold or having been in service and who decides?
Second hand boats buying and selling: Evidence of compliance
The person who decides when the evidence is sufficient is the person putting the boat into service or selling it.
While a broker carries a duty of care, as the industry professional in a transaction, it is not their responsibility to make such a decision.
It is the broker’s job only to alert and educate the vendor and potential buyers to the issue of compliance for them to make their decision.
The authorities, of course, can disagree with the decision so fresh compliance is the only fool-proof route. (I’m pleased to say that UK brokers take their duty of care seriously, with the trade body the Association of Brokers and Yacht Agents [ABYA], playing a proactive role in keeping their members informed on this topic.)
No written rule exists that clearly sets out the specific documents that are accepted as evidence so let’s consider the options.
Since the rule applies to ‘sale’ or being ‘in-service’, the registration flag is irrelevant.
A berthing receipt shows that a boat was once in a particular location, but was it ‘in-transit’ or was it ‘in-service’?
A bill of sale shows where the boat owner had a place of residence, but a UK buyer might have kept the boat in Thailand.
If, however, you had both a registration certificate that identifies the keeper in country A and you have a berthing receipt for the boat in country A, you now have quite compelling evidence to conclude that the boat was ‘in-service’ in country A.
In these scenarios, although I have focussed on selling boats from the UK to EU, the same applies when buying boats from Europe and bringing them to the UK, except that the UK is accepting CE marks throughout 2022.
Thereafter, the UK will require CE-marked boats coming to the UK to undergo PCA and affix a UKCA mark.
So, what have we discovered?
Firstly, the trade of new boats is not badly affected by Brexit. The trade of used boats, however, is greatly affected as we can no longer trust a CE mark to tell us that a boat is fit to be sold in Europe.
Unlike previously, many boats now require new certification to sell between Europe and the UK than would have been the case before.
All boats without CE marks (even those that were genuinely exempted prior to Brexit) will require PCA when selling across the Channel.
Cruising in Europe
Boats that are ‘in transit’ throughout Europe are not required to comply with RCD. Why?
Well, the two triggers for CE marking are when a product is first ‘placed on the market’ or ‘put into service’ in Europe.
Clearly a boat sailing through a territory is not ‘placed on the market’.
While one might argue it is ‘in service’, the definition in the EU Commission’s Blue Guide (that discusses the interpretation of all Directives) requires ‘putting into service’ to have an ‘end user’ who is ‘established in the [European] Union’.
So if you are not established in the Union, you may sail your boat through EEA territories.
This raises one curiosity: were you to lend your boat to a friend who is established in the Union, the boat would be in service and compliance would be required.
Be warned, also, that while there is no stated time limit for being in transit, there have been cases when boats have been impounded because the authorities have seen them too regularly over a period too long for the boats to be considered in transit.
Buyers of second hand boats beware
If you are considering buying a European boat and bringing it to the UK, do it this year or else you will have to pay for a PCA to earn a UKCA mark.
If you are selling a second hand boat from the UK to Europe, use a ABYA-member broker.
If the only route is fresh compliance, the good news is that the technical aspects of the regulations in both the UK and Europe are identical, so there should be no reason for a CE-marked boat to fail to comply.
It is just an additional costly administrative burden – exactly the kind of burden Boris promised we would be free of.
Enjoyed reading Second hand boats: CE mark headache for sailors?
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