The Great Brexit Debate

There are two important and world changing events happening in Europe next month. One is UEFA Euro2016 from 10 June to 10 July, hosted by France in the wake of the past year of terrorist attacks - 51 matches will be played in 10 French cities, including 12 in Paris.

The other is the British Referendum on whether or not to leave the EU: The Brexit debate. For once it’s likely that many more will be following the political vote than the championship final which is unlikely to involve a British team.

Since the referendum was announced, experts across the world of international finance and politics have been throwing their hats into the ring and mostly confusing the general public with crystal ball statistics.

The fear factor comes from the great unknown: No country has ever left the EU club - the closest we’ve ever come was Greece last year. Back then, as the crisis unfolded, the world watched in horror as far-right groups protested across the continent and we questioned whether the European dream and 60 years of peace was about to end. It didn’t.

So, let’s look at the nuts and bolts of Britain’s position within the EU and how Brexit will affect you as an ex-pat or crewmember, as well as the UK as a whole.

Free and Fair Trade

Currently UK industry exports only 5% of all manufactured products to EU member states - it imports far more. On the world stage, if we consider the UK’s position as the world’s 5th largest economy, Brexit supporters argue the UK will be able to forge trade links with countries outside the EU, and trade freely as part of the Commonwealth of Nations, regardless of their position in the EU. Furthermore, there is a free trade zone from Iceland to Turkey and the Russian border, allowing trade with other EU countries but without EU control, as already practiced by many other non-EU countries around the world.

While it is possible that EU member states may decide not to grant the UK all the concessions they require if they leave, remember that before the UK joined the Common Market in the 70s, there were already trade agreements and relationships in place, and there’s every reason to expect that these could be revived.

Freedom of Movement

Freedom of movement may be affected, however the UK is not a part of the Schengen Agreement and is very unlikely ever to join whether they leave or stay in Europe. There will still be passport controls upon entering EU member states, and EU and UK citizens will be unlikely to have all of the freedoms and liberties that they currently enjoy within member countries. Emigrating to sunnier climes for our retirement may be made more difficult, as might property ownership in other EU member states. However, this has not yet been defined and of course it works both ways, so there’s a deal to be made.

For those Brits already living within the EU, it is unlikely that your residency will be affected. The concept of asking existing residents and property owners to move or sell would be in breach of existing conventions, for example The European Convention on Human Rights.

A Brexit vote won’t see the UK suddenly left out in the cold. An exit strategy will need to be negotiated and some commentators hazard that this could take 10 years to complete!

British Yacht Crew

There are some specific EU based regulations that may affect British yacht crews if the UK votes to leave.

Examples include access to red diesel, control of native and non-native species, and European marine protected areas (a range of measures aimed at protecting the biodiversity of seas controlled by member states).

However, more salient points such as the length of time that a non-EU Captain can stay in a Schengen country (currently limited to 90 days for six months), or the length of time a non-EU flagged yacht can be moored (18 months compared to six for EEA countries), make Brexit a more attractive option for UK maritime crew.

Meanwhile, those preferring to stay argue that visiting EU countries could become more expensive and arduous, and may affect exchange rates and mobile phone costs, but this is pure scare mongering as the details of any exit strategy have yet to be formulated and agreed.

Ex-pat savings and investment statuses

There has been an increasing level of rhetoric from pro-EU campaigners that earnings and tax of yacht crew and ex pats will be affected should the UK decide to leave the Union. Politicians, who are supposedly in the know, are banding about fears that pension pots will collapse and that savings will evaporate.

However, it is worth considering that investments will always go up and down based on world events. Rather like the concept that a butterfly flapping its wings will cause an earthquake on the other side of the planet, so any major event will cause the markets to change. It is worth noting though, that investments rise and fall and markets eventually stabilise themselves.

An additional consideration is that given that markets can fall they can also rise. A potential Brexit may not be the doomsday it is being purported to be.

Bank accounts and taxes

Tax is based on residency status. Whether the UK decided to stay or leave will have little effect on the tax that you pay or the country that you pay tax. The Seafarers Earnings Deduction will remain unchanged as this is written into British law not EU. The same applies to bank accounts, which are already affected by FATCA and GATCA meaning that financial institutions can report back account details (see our article ‘The Age of Compliance’

For the majority of yacht crew a Brexit vote will mean business as usual.

In reality the biggest impact of an exit on crew will be an increase in paperwork, but we’ve had rather a lot of practice already as part of the EU. The final outcome now rests on the showmanship of both sides over the coming weeks.