Ireland’s expenditure of EU Brexit compensatory funding for the seafood sector is to be extended into next year.

The so-called Brexit Adjustment Reserve (BAR) was paid by the EU to Ireland and other affected member states to mitigate the impact of Britain’s withdrawal from the EU.

Ireland, as the EU member state most affected, received the biggest allocation at a value of €1.165 billion for fisheries, agriculture, enterprise customs and others.

The EU had stipulated monies had to be spent by the end of 2023. Ireland has to prepare a detailed claim by September 2024, setting out the projects undertaken, how they have mitigated the impact of Brexit, and other required information.

In response to questions put to him by Independent senator Victor Boyhan at an Oireachtas Agriculture, Food and Marine committee, Minister for Marine Charlie McConalogue said he had approved the introduction of “limited flexibility” for capital supports for the seafood processing sector.

To date, Bord Iascaigh Mhara (BIM) has paid out €127.8 million in total in Brexit fundings, and says that €47.9 million remains to be spent. This is equivalent to 4.4% of the remaining funds, it notes.

McConalogue says he has secured approval to allow BIM to make payments for projects approved under a “transformational change” scheme into early 2024.

“I am aware that some processors who have been approved for funding under this scheme have encountered delays and difficulties in completing their projects in time to draw down their approved funding,”he said.

Independent senator Victor Boyhan

Senator Boyhan welcomed the move.

The scheme aims to mitigate the effects of the EU/UK Trade and Cooperation Agreement (TCA)/Brexit while also “building more environmentally friendly, sustainable and competitive enterprises which serve the EU and wider global markets”, McConalogue explained.

Projects must also “create higher levels of employment more locally, and make better and more sustainable use of Irish landed or imported raw material”, he said.

“Ireland’s fish processing sector sustains over 4,000 jobs and is of particular importance to the economies of our rural coastal communities,”McConalogue said.

McConalogue said that was “pleased to be able to announce this practical solution”, whereby seafood processors who would otherwise have lost some of their approved funding will now have an opportunity to receive at least some of this funding.

The scheme has a budget of €45 million, he said.

Marine Minister Charlie McConalogue has announced a €560,000 support package for the Irish fishing fleet segment of 22-28m vessels that targets scallop in the Irish Sea, Celtic Sea and the English Channel.

Speaking on Friday (10 November), Minister McConalogue said: “I am pleased to announce that I have secured €560,000 State Aid approval for support for this segment of the Irish scallop fleet.

“The Specific Scallop Fleet Transition Support Scheme recognises that the EU-UK Trade and Cooperation Agreement (TCA), while directly impacting quota species, has also indirectly impacted non-quota species such as the scallop sector, which has been significantly affected by reductions in fishing time and logistical issues related to landed catch.”

Prior to Brexit, scallop caught in the English Channel were landed into the UK and shipped directly back to Ireland for processing. These processed scallops were then re-exported to other EU countries.

Post-Brexit, as a consequence of the TCA, these operators now face significant additional logistical and administrative burdens, with associated additional costs.

There are currently seven vessels of 22-28m that target scallop in the Irish Sea, Celtic Sea and the English Channel.

On average the days at sea fished by this fleet segment has reduced from 217 days in the period 2018-2020 to 142 days in 2021, a reduction of 34%.

This has resulted in reductions in average turnover of €227,000 (37%) across the fleet segment, with an averaged loss of 37.5% between trips now landed on the continent compared to previous trips which were being landed in the UK.

The minister added: “In that context I consider it appropriate to put in place a short-term liquidity aid scheme covering losses incurred by this segment during the 2021 scallop season due to reductions in fishing time, which have led to reduced turnover.”

The scheme will be open to owners of vessels in the specific scallop segment and aims to partially offset losses incurred by the sector due to the TCA during 2021 compared to 2018-2020.

To be eligible for funding, vessel owners/companies must have suffered a 30% or more reduction in turnover over in 2021 compared to the period 2018-2020 as a direct result of Brexit.

Payments will be based on the per days at sea lost in 2021 compared to the period 2018-2020, up to a maximum of 20 days or €80,000 per vessel.

Minister McConalogue said: “I am confident this support of up to €80,000 per eligible vessel will assist this segment of the Irish scallop fleet to consider all options to restructure and adapt to the issues created by Brexit in the scallop fishery.”

Scheme information, once launched, will be available on the BIM website.

The UK has been fined €32m by the European Court of Justice (ECJ) for allowing pleasure boats to use red diesel before Brexit came into effect.

Under EU law, only commercial boats can use lower-tax dyed diesel, following a ruling by the ECJ in October 2018.

In Ireland a ban on green diesel use by pleasure boats came into effect on 1 January 2020. But a similar ban was not introduced for red diesel use in Northern Ireland until October 2021.

The ECJ brought proceedings against the UK in early 2020, and said the rule had applied to the whole of the UK for almost three years since the original ruling, therefore it was irrelevant that it only applied in NI since Brexit came into force in January 2021.

The court also determined that even though the UK is no longer a member state, it is still bound by some EU rules because of Northern Ireland’s unique position within the single market — meaning that its fine was based on the size of the UK’s economy as a whole.

Marine Industry News has more on the story HERE.

At the EU Agriculture and Fisheries Council in Luxembourg on Monday (26 June), Ireland’s Marine Minister highlighted the need to protect the EU’s mackerel quota in the face of external threats from third countries.

Minister Charlie McConalogue said: “At council, fisheries ministers held an initial discussion on the preparation for the negotiations on setting quotas for 2024. I set out clearly Ireland’s priorities, including the need for action to prevent the unsustainable actions of other coastal states, outside of the EU, diluting the EU’s mackerel quota share.”

Fisheries ministers also discussed the conclusions on the European Commission’s Fisheries Policy Package, which was published in February.

Minister McConalogue acknowledged the considerable progress that has been achieved to date through the framework of the Common Fisheries Policy and the key role played by stakeholders in this regard.

However, the minister also highlighted the need to take account of the significant changes over the past number of years, especially Brexit.

“The package did not, in my view, address the real and detrimental impact of Brexit on Irish fishers in particular,” he said. “Neither did it address the new reality that the majority of EU fishing opportunities are determined by annual negotiations with third parties.”

The minister added: “At my insistence, the conclusions now include a demand that the [European] Commission fully analyse and report on the impacts of quota transfers, as well as the need to develop a comprehensive strategy for relations with third countries. This demand was supported by the majority of member states.”

The Royal Yachting Association (RYA) has expressed its disappointment as the British Government’s rejection of its proposal to allow recreational boat owners, established in the UK and who lawfully purchased and kept their boat in the EU at the time the UK was an EU member, to be eligible for Returned Goods Relief (RGR).

The RYA, British Marine, Association of Brokers and Yacht Agents, and the Cruising Association were informed of the decision at a meeting with HMRC last Wednesday (14 December).

On 25 April 2019, the Government originally said: “The intended UK policy is that a UK vessel will not lose its status as VAT paid in the UK because it is outside UK territorial waters on EU Exit Day. When the vessel returns to the UK the person responsible for the vessel can claim Returned Goods Relief.”

On 03 November 2020, the Government reaffirmed: “If a vessel was re-imported during 2021, it would be sufficient to show that any sale or transfer or ownership had been made in compliance with [EU] VAT legislation.”

Despite two separate confirmations by the government in April 2019 and November 2020, the RYA says, it was not until 17 December 2020 that HMRC stated the prior advice was incorrect and that it would be unable to apply an easement for returning vessels after Brexit.

This gave boat owners just 14 days to re-base their boats to the UK to avoid a second VAT charge. Given the distance, winter weather conditions and above all COVID travel restrictions, this was not only unrealistic but for most it was simply impossible, the RYA says.

Mel Hide, RYA director of external affairs, said: “This proposal has been with the Government since January 2022 following the successful case we made for an easement of the three-year RGR condition. It is therefore a deeply disappointing outcome and falls well short of resolving the issue for those who have been caught out by incorrect advice provided by the Government.

“It would also seem to fall short of the Government commitment to assist UK industry as we forge our future outside of the EU. We must now consider what action we can collectively take to seek a better outcome.”

Lesley Robinson, CEO of British Marine, commented: “This is obviously very disappointing news in light of the previous commitments from Government to support UK boat owners bringing their vessels back to the UK. We will continue to work with our strategic partners to challenge this decision and press for a change in policy.”

Significant “negative impacts” of Brexit on the British fishing industry have been highlighted in a video released by the British All-Party Parliamentary Group (APPG) on Fisheries.

Seven of its group’s members outline what a post-Brexit future for the British fishing industry could and should look like and say that the fishing industry was let down by Brexit.

The group’s report, published earlier in the summer, recorded how significant financial losses were a common experience for respondents, with “fears widely expressed for the long-term viability of individual businesses, fishing fleets, and other parts of the industry including processors and transporters”.

"The British fishing industry was let down by Brexit"

“Respondents who fed into the report recommended various actions that the government should now take to support the British fishing industry, which included investing in infrastructure and new markets at home and abroad, and ensuring effective and inclusive management of domestic stocks,” the APPG says.

Tina Barnes of the Seafarer’s Charity, which co-funded the report, spoke about the human costs of economic challenges to the fishing industry following Brexit.

“The negative impacts of Brexit on the livelihoods – and therefore the welfare – of individual fishers has been significant,” she says. The report “provides compelling evidence that action should be taken to support the industry”.

APPG vice chair Alistair Carmichael MP referred to a recent parliamentary debate that he secured on the issue on October 13th last, which “provided an important opportunity for myself and other MPs to emphasise the urgency of supporting the UK fishing industry.”

APPG chair Sheryll Murray MP said that “the strength of the APPG on Fisheries lies in its cross-party nature, with the needs of fishers, coastal communities and other marine stakeholders taking precedence over party politics. This timely video, bringing together voices from several different parties on how to support UK fishing for the benefit of all, provides a fantastic illustration of this.”

Both the video and report can be found on the APPG website, and the video can be viewed is below

Minister Charlie McConalogue met on Friday (23 September) with representatives of the broad seafood sector covering the fishing fleet, aquaculture and processing, providing an update on progress on the implementation of the recommendations of the Seafood Task Force.

Minister McConalogue said: “I set out how each of the main support schemes recommended by the Seafood Task Force are progressing including the €24 million voluntary tie-up scheme for the fishing fleet which continues to the end of November, the €60 million voluntary decommissioning scheme which commenced in early September, the €45 million processing capital, the €20 million aquaculture growth schemes which opened at the end of August and the €25 million Blue Economy Enterprise Scheme and the Fisheries Co-operative Transition Scheme.

“I listened to the requests from the sector to progress quickly the remaining schemes provided for in the task Fforce report and I undertook to work to progress consideration of these proposals with the Department of Public Expenditure and Reform and the EU State Aid approval processes.”

The seafood sector also explained the challenges they are facing with the high cost of fuel and energy prices and asked for additional supports across all elements of the sector.

“I am very aware of the challenges being faced by the seafood sector arising from the increased costs of marine fuel and of energy,” the minister said. “I advised that I have made clear the position that the seafood sector must be supported under any business supports provided in the upcoming Budget.

“I also undertook to continue to monitor the situation and in particular the fuel costs, which have stabilised albeit at a higher level than Quarter 1 2022 prices. The current ongoing extensive supports under the task force are targeted at addressing the impacts of Brexit taking account of the current situation. I will continue to monitor and assess the situation over the coming period and keep all available options under active consideration.”

There was also in-depth discussion on the upcoming negotiations with the UK on setting whitefish quotas for 2023 and negotiations with the maritime states of the UK, Norway, Faroe Islands and Iceland on the management, sharing and quota setting for the mackerel stock and arrangements for the blue whiting fishery in 2023.

Organisations attending the meeting were the Irish South and East Fish Producer Organisation, Irish Fish Producer Organisations, Irish South and West Fishermen’s Organisation, Killybegs Fishermen’s Organisation, Irish Island’s Marine Resource Producer Organisation, National Inshore Fisheries Forum, Irish Fish Processors and Exporters Organisation and IFA Aquaculture. Bord Iascaigh Mhara and the Marine Institute also attended.

The meeting came two days after a Joint Oireachtas Committee on Agriculture heard that aquaculture businesses in Ireland will “no longer be profitable” without significant supports to cope with “spiralling input costs”, as previously reported on Afloat.ie.

BIM has announced the Brexit Voluntary Permanent Cessation (“decommissioning”) Scheme is open for applications.

The purpose of the scheme is to restore balance between the fishing fleet capacity and available quotas following quota reductions arising from the Brexit Trade and Cooperation Agreement (TCA) between the EU and the UK. The scheme follows from a recommendation of the Seafood Task Force, established by the Minister for Agriculture, Food and the Marine Charlie McConalogue TD, in 2021,

The scheme will support vessels in the polyvalent and beam trawl segments to permanently cease all fishing activity, increasing the quota available for remaining vessels, and thereby ensuring the sustainable profitability of the Irish fishing fleet.

The target of the voluntary scheme, as recommended by the Task Force, is to remove up to 60 vessels of 8,000 GT and 21,000 KW at a cost of €60million. The aid amount will be calculated on the basis of the capacity of the scrapped vessel along with a catch sum payment. The catch sum payment is based on the dependence of the vessel on quotas that were reduced under the TCA Agreement.

The total aid amount for any applicant will not exceed €12,000 per GT and part of the aid should be passed to crew members. To incentivise participation in the scheme, vessel owners and crew members will also benefit from specific tax treatment as set out in the Finance (Covid-19 and Miscellaneous Provisions) Act

Licence holders of fishing vessels registered on the Irish sea-fishing boat register in the polyvalent or beam trawl segments and holding a valid sea-fishing boat license issued by the Licensing Authority for Sea-Fishing boats are being invited to apply.

The deadline for submission of applications is 10am, Monday 24 October, 2022.

More information, including details on eligibility and on how to apply can be found by visiting www.bim.ie

Marine Minister Charlie McConalogue today (Thursday 28 July) welcomed State Aid approval to facilitate the implementation of the voluntary decommissioning scheme for the whitefish fishing fleet recommended by last October’s Report of the Seafood Task Force – Navigating Change.

Reacting to the approval decision by the EU Commission, Minister McConalogue said: “The Seafood Task Force, which included representatives of the five fisheries producer organisations and the four main fisheries cooperatives, recommended in its October 2021 report that a voluntary decommissioning scheme should be implemented to help restore balance between fishing fleet capacity and available quotas, following the reductions in quotas for stocks arising from the EU/UK Trade and Cooperation Agreement.

“I have ensured that the dimensions of the scheme will follow the recommendations of the task force. The task force considered that a scheme targeting the voluntary decommissioning of vessels with total capacity of up to 8,000 gross tonnes and 21,000 kilowatts could restore the viability of the remaining fleet.

“Today’s decision makes way for implementing this key recommendation of the task force which will offer vessel owners a premium of up to €12,000 per gross tonne. This will comprise a basic premium of €3,600 per gross tonne and a catch incentive premium of up to €8,400.

“The catch incentive premium paid will reflect the TCA quota stocks catch history of the vessel applying, ensuring that the scheme is most attractive to active vessels, whose voluntary departure from the fleet can contribute most to rebalancing the remaining fleet with the reduced quota available.”

The minister added: “In line with the recommendations of the task force I am also requiring that owners of vessels who choose to participate in the scheme must ensure that crew working on their vessel are compensated for their loss of livelihood following the decommissioning of their vessel.”

The scheme provides for a payment by the vessel owner to the crew member for each year of service in the fleet, up to a maximum of €50,000 for a crew member who had worked in the fleet for 40 years.

The Seafood Task Force recommended that in order to achieve the objective of improving the viability of the fleet within available fishing quotas post Brexit a package of tax measures be put in place to support vessel owners who choose to apply to leave the fleet under what is a voluntary exit scheme.

The tax measures recommended by the Seafood Task Force in relation to payments under the scheme were enacted on 2 June 2022 through section 15 of the Finance (Covid-19 and Miscellaneous Provisions) Act 2022, which provide for beneficial treatment of the scheme payments with regard to capital gains and income tax with potential benefit up to €20 million.

Minister McConalogue concluded: “This scheme flows directly from the recommendations of the Seafood Task Force. I have asked BIM to ensure that the scheme will allow for an adequate period of time for vessel owners to reflect before making what are important decisions in relation to whether or not they wish to avail of the scheme.

“The overall package of measures that are being implemented on foot of the Seafood Taskforce Recommendations will contribute to the long-term viability of the fishing fleet, the wider seafood sector and the coastal communities dependent upon it.”

The scheme will be administered by Bord Iascaigh Mhara (BIM) which will publish full technical details and open the scheme in a matter of weeks. A fund of up to €60 million in direct payments is available to deliver the voluntary scheme.

Further details of the scheme will be available from bim.ie/fisheries/funding/.

The European Commission has approved, under EU state aid rules, a €1 million Irish scheme to mitigate the impact of reduced quotas for landed fish on fisheries cooperatives in the wake of the UK’s withdrawal from the EU.

Support will be available to fisheries cooperatives that are primarily focused on fish species whose quota has been reduced and are reliant on the commission earned from landings of fish species caught by their members’ vessels for revenue.

Under the scheme, compensation will be granted in the form of a direct grant to cover for the losses in revenue resulting from the shortage of landed fish. Eligible fisheries cooperatives will be able to receive up to €250,000. The scheme will run until 31 December this year.

The measure is planned to be financed under the Brexit Adjustment Reserve (BAR), established to mitigate the economic and social impact of Brexit, subject to approval under the specific provisions governing funding from that instrument.

The commission assessed the measure under Article 107(3)(c) of the Treaty on the Functioning of the European Union, which allows member states to support the development of certain economic activities or regions under certain conditions, and under the guidelines for the examination of state aid to the fishery and aquaculture sector.

The commission says the scheme will ensure that the fishing and processing sector and onshore fishing-related activities remain economically viable and competitive.

It adds that approval under EU state ad rules was granted on the basis that the scheme facilitates the development of an economic activity and does not adversely affect trading conditions to an extent contrary to the common interest.

Announcing the scheme on Friday (22 July), Marine Minister Charlie McConalogue said: “The cooperatives collectively manage the sales and distribution of close to €100 million worth of fish. Over the course of 2021, sales from the cooperatives were reduced by approximately €15 million compared to 2019, translating to a loss of commission for the cooperatives of up to €1.2 million.

“This caused cash flow difficulties for the cooperatives throughout 2021, limiting their financial capacity to re-configure and re-structure their businesses to adapt to the changed trading environment under the Trade and Cooperation Agreement.

“The Brexit Fisheries Cooperative Transition Scheme I am announcing today will provide liquidity aid of 7.5% of the reduction in fish sales for the cooperative’s boats compared to 2019, up to a maximum payment of €250,000 per qualifying cooperative. The scheme will be open to fisheries cooperatives that are primarily focused on TCA quota species — that is, cooperatives whose members’ landings comprise 75% or more TCA quota species.”

Further details of the scheme will be available from the BIM website.