A no-deal Brexit threatens the mutual recognition of financial-protection schemes for holidaymakers across Europe.
That is the view of leading industry accountant Chris Photi, a senior partner at White Hart Associates in London.
He warns: “If there is no deal, mutual recognition will presumably cease.”
Mutual recognition of EU member states’ financial-protection arrangements for consumers is a key element of the EU Package Travel Directive (PTD) 2015 which came into force across the EU on July 1 this year.
It has been widely touted as among the directive’s biggest benefits to EU travel businesses.
But Photi warned this week that a no-deal Brexit, which looks increasingly likely, could end the arrangements “taking us back to where we were before July”.
He told Travel Weekly: “EU states will be unlikely to recognise UK insolvency protection. Traders may need again to comply with multiple insolvency and licensing regimes across the EU.
“Similarly, EU traders selling packages or Linked Travel Arrangements in the UK will be required to comply with UK insolvency-protection rules.”
He noted: “The thinking of regulators appears clear.
“The UK Civil Aviation Authority (CAA) withdrew the Atols of several EU companies without a UK place of establishment at the end of September.
“Similarly, UK tour operators without a place of establishment in Ireland were advised by the Irish Commission for Aviation Regulation (CAR) that their licences would not be renewed at the end of October.”
Photi argues the regulators should have facilitated interim licence renewals until the outcome of Brexit negotiations is clear.
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