amending Regulation (EU) No 508/2014 as regards certain rules relating to the European Maritime and Fisheries Fund by reason of the withdrawal of the United Kingdom from the Union

EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

The United Kingdom submitted on 29 March 2017 the notification of its intention to withdraw from the Union pursuant to Article 50 of the Treaty on European Union. This means that, if the Withdrawal Agreement is not ratified, the Union's primary and secondary law will cease to apply to the United Kingdom from 30 March 2019 (‘the withdrawal date’). The United Kingdom will then become a third country.

The Commission Communication ‘Preparing for the withdrawal of the United Kingdom from the European Union on 30 March 2019: a Contingency Action Plan’ of 13 November 2018 set out the contingency measures it plans to take if no withdrawal agreement enters into force on the withdrawal date. In that Communication, the Commission listed the actions it considered necessary while recalling that additional actions may be necessary at a later stage. The Communication also presented the six general principles which contingency measures at all levels should comply with. These include the principles that measures should not replicate the benefits of membership of the Union, nor the terms of any transition period, as provided for in the Withdrawal Agreement; they must be temporary in nature and should in principle not go beyond the end of 2019; and they must be unilateral actions of the European Union in pursuit of its interests, and therefore in principle the Union can revoke them at any time.

The European Council (Article 50) reiterated its call, on 13 December 2018, for work on preparedness at all levels for the consequences of the United Kingdom's withdrawal to be intensified, taking into account all possible outcomes. The Commission presented a package of measures on 19 December 2018 in response to that call. On 17 and 18 December 2018 the Agriculture and Fisheries Council fixed the fisheries opportunities for 2019. Based on this, and taking into account on-going contacts with Member States on the significant negative impact on the fisheries sector of a withdrawal of the United Kingdom without a withdrawal agreement, and the fact that stakeholders cannot themselves mitigate these adverse consequences, the Commission has concluded that two contingency measures are necessary for the fisheries sector. Alongside this measure to amend the European Maritime and Fisheries Fund, the Commission is proposing a measure on the sustainable management of external fishing fleets.

Pursuant to Regulation (EU) No 1380/2013 (the CFP Basic Regulation) Union fishing vessels have equal access to Union waters and resources subject to the rules of the Common Fisheries Policy (CFP). As from the withdrawal date, the CFP will no longer apply to the United Kingdom. The United Kingdom waters (12 nautical miles territorial sea and adjacent exclusive economic zone) will then no longer be part of the Union waters. In the absence of any provisions to the contrary, access to each other’s waters would no longer be automatic. The default scenario in the absence of other arrangements is that Union fishing vessels would not be authorised to fish in UK waters anymore and vice versa.

The fisheries sector is a key component of the economic life of many coastal regions of the European Union. In view of the considerable uncertainties, in absence of an agreement with the United Kingdom, Union vessels risk losing access to these waters and fishing opportunities therein. This would have immediate significant impacts in terms of fishing activities of the EU fleet, employment and economic returns.

The gross added value of fisheries in the EU was 4.5 billion EUR in 2016. About 150.000 jobs depend on fisheries, mostly in coastal areas where employment opportunities are limited. Fishing activities also generate employment in other ancillary sectors: for each fisherman between 0.5 and 1 full time employment equivalent is created in ancillary activities. Member States carry out fishing activities at a value of €585 million in the United Kingdom waters. The overall dependency of 8 Member States on United Kingdom waters averages 14 % of their overall landings, ranging from 50 % for the Belgium fleet to around 1 % for Spain. At the local community level the socio-economic impact can be significant, where fishing vessels are particularly dependent on access to United Kingdom waters. The fisheries sector also links up to ancillary activities upstream and downstream.

The impact of a sudden closure of UK waters to Union fishing vessels would therefore be substantial for specific fleet segments, with a strong negative economic impact in certain regions and coastal communities. As regions in several Member States along the Atlantic and North Sea coast would be affected, such an emergency situation requires coordinated solutions at EU level.

The scope for mitigating the impacts in this situation would be limited. Current UK catches in Union waters could be reclaimed by Union fishing vessels, but there might not be a complete match in the species concerned. The vessels and fleet segments most heavily impacted by a closure of United Kingdom waters might not be the same ones fishing for the species that would become available in Union waters. Furthermore, there are limits to how much fishing efforts could be redirected from United Kingdom waters to Union waters for reasons related to cost-effectiveness and quality of catches. The requirement for fishing activities to be sustainable could also limit a redirection and concentration of fishing effort in Union waters. These options would therefore only ever be able to partially make up for the economic losses for Union fishing vessels resulting from a loss of access to United Kingdom waters. The economic impacts for the affected EU fleet segments would remain very significant.

The European Maritime and Fisheries Fund (EMFF) established by Regulation (EU) No 508/2014 of the European Parliament and of the Council is the fund for the EU's maritime and fisheries policies for 2014-2020. It is one of the five European Structural and Investment (ESI) Funds which complement each other and seek to promote a growth and job based recovery in Europe. The fund helps fishermen in the transition to sustainable fishing; supports coastal communities in diversifying their economies and finances projects that create new jobs and improve quality of life along European coasts.

Measures are already available under the EMFF Regulation for mitigating the adverse economic effects resulting from the withdrawal of the United Kingdom from the European Union throughout the whole chain of production and marketing. Under shared management, Member States affected by the withdrawal of the United Kingdom from the European Union may decide to redirect available appropriations to any necessary measure mitigating its consequences. However, this discretion is currently limited to some priorities. This would limit the room for manoeuvre Member States have to mitigate the impacts of a closure of United Kingdom waters on their fleets and would limit the effectiveness of those measures.

The EMFF Regulation provides detailed rules and arrangements for granting financial compensation to fishermen and owners of fishing vessels in cases of temporary cessation of fishing activities. However, the criteria set to allow for temporary cessation do not allow for compensation due to the withdrawal of a Member State from the European Union and the subsequent loss of access to and fishing opportunities within the waters of that State.

In addition to the measures already available under the EMFF Regulation, this proposal introduces the possibility to provide public support for the temporary cessation of fishing activities for fishermen and operators that have significant dependence on access to United Kingdom waters and who are affected by a closure of United Kingdom waters. This measure should be available from the day following that on which Union law ceases to apply to the United Kingdom pursuant to Article 50(3) of the Treaty on European Union.

•Consistency with existing policy provisions in the policy area

Regulation (EU) No 508/2014 of the European Parliament and of the Council of 15 May 2014 on the European Maritime and Fisheries Fund and repealing Council Regulations (EC) No 2328/2003, (EC) No 861/2006, (EC) No 1198/2006 and (EC) No 791/2007 and Regulation (EU) No 1255/2011 of the European Parliament and of the Council.

•Consistency with other Union policies