The United Kingdom’s retraction from the European Union has created vast problems for suppliers, manufacturers, and procurement entities that now have to deal with tariffs and taxes, administrative requirements, among other bureaucratic border issues. The space sector is evaluating if the United Kingdom’s participation in the European Space Agency (ESA) activities may offer a solution for these problems.
Experts are also investigating if the ESA transactions could offer exemptions for duties, taxes, and restrictions associated with the transfer of items across the borders without invoking the new Brexit blockades. Initially, the ESA Convention of 1975 gave various entities affiliated with this program privileges like immunity of jurisdiction and execution, tax exemptions for property and salary, and the free movement across borders for members in the ESA deal.
Article VI of the convention requires import and export duties, restrictions on the movement of goods across borders, and the movement for official activities should be removed for business and related activities to run smoothly. The convention explained that official duties that are eligible for these exemptions must be within the field of space research, technology, applications, and pursuance of the agency’s objectives for them to be sanctioned.
Any other activities that have no relation to this rule will therefore be treated as an infringement of the laws stipulated by the member states. Moreover, the objectives of the ESA that require border-to-border operations must maintain or promote peace in the area involved for the space research and technology activities to be successful. Otherwise, the contrary may result in the agency spending more to salvage the programs rather than developing them to serve the member countries.
The convention policies add that the resumption of other research and technology activities would be judged by their intensity in staying in line with the privileges accorded to them. Furthermore, the taxes and duties are not hinged on the public utility services or goods and services passing across borders for personal benefit to the ESA members.
The legal counsel for ESA, Marco Ferrazzani, stated that this loophole allows only the operations that the UK has agreed upon in the Convention to proceed and not those that it has sanctioned against through the Brexit. Customs and duties exemptions for products from ESA activities that have not been authorized by the Convention might have to be dealt with as special cases with a likelihood of being disbanded. Hopefully, the UK can be lenient for businesses in this line to be effective.