The Greek Smile

Hats off to Greece!

They have started the year with an announcement opening the door to foreign flagged vessels wanting to carry passengers between Greek ports.

The so-called “E-Charter Permission” programme enables owners and operators of non-Greek pleasure vessels to apply for a licence to cruise in Greek waters, subject to a fixed fee scale. The license application is submitted on an electronic platform managed by the authorities. The license can be for individual voyages, commercial charter, private use, international trips, or empty runs in or through Greek territorial waters. Vessels are required under the rules to hold an e-Charter Permit for any of these in either digital or printed form.

Will the E-Charter Permission programme bring a sea change in the Greek charter scene? The owners and operators of superyachts looking to charter in Greece would hope so.

But it is a daring hope. Despite several other shipping and tax policy initiatives by successive governments, Greece has remained an enigma of uncertainty to commercial yachting. At the heart of the issue is Greece’s overly protectionist attitude to its territorial waters. Historically, it means Greece has practically conferred the right to operate freely in Greek waters solely upon Greek flagged vessels. In a borderless EU, Greece has argued that some host-State controls are necessary for its socio-economic cohesion, given its thousands of islands.

So, to carry out activity in Greek waters, vessels flying the flags of other EU Member States tend to be subject to conditional ‘licensing’ under Greek national rules. The licensing process compels these vessels to comply with manning, route-restriction, and other access conditions which the whole concept of a Single Market EU market is supposed to have removed. Which is why Greece has clashed with EU institutions over its failure to apply the harmonised ‘cabotage’ rules that give Member States’ vessels freedom to provide maritime services anywhere within the EU.

Greece’s restrictive practices against vessels flying the flags of other EU Member States extend to its VAT structuring requirements. One example is the requirement for a branch in Greece. This contrasts with other EU Member States, who commonly accept either direct VAT registration with the authorities or the appointment of a VAT agent.

And when it comes to overseas owners and operators with their non-EU flagged yachts, who are not generally covered by EU cabotage rules, the restrictions are tighter. They have always been unable to set up a branch to register for VAT and operate in Greece. And they are prohibited from embarking and debarking passengers in Greek ports, even if they are already VAT registered persons starting charters from other EU Member States. In this, again, Greece is different from other EU Member States, who merely require the appointment of a resident fiscal representative.

The E-Charter Permission programme launched with a novel digital portal targeting the large cohort of oversees suppliers is thus the classic Greek smile – a parting of lips on a somewhat blocklike head. When non-Greek owners and operators of vessels take a good look-in, they will find cold limits that they are unaccustomed to in other charter locations.

Limits include the charter-days quota, the vessel length restrictions, the need to hold a Greek Foreign Commercial Yacht Inspection Certificate, the requirement to publicly exhibit the charter contract booked between private charter parties, the scale of TEPADACH levies that must be paid to the Greek authorities, and the 70% VAT on the booked charter that must be deposited in advance with the authorities.

The E-Charter Permission launch shows Greece’s ambition, but also its instinctive reluctance to open its attractive bits of EU waters to free circulation of foreign-flagged vessels. How such a hybrid measure will play out with the commercial yachting community will soon become evident.

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