After years of gruelling negotiations, it was announced today that the the terms of a future treaty between the EU and UK in respect of Gibraltar have been agreed. A Joint Statement from the UK, European Commission, Spain and Gibraltar says:
“The main objective of the future Agreement is to secure the future prosperity of the whole region. This will be done by removing all physical barriers, checks and controls on persons and goods circulating between Spain and Gibraltar, while preserving the Schengen area, the EU Single Market and Customs Union.”
The Joint Statement also emphasises that the Agreement will be:
“without prejudice to the respective legal positions of Spain and the United Kingdom with regard to sovereignty and jurisdiction.”
As is well known, the governments of Spain and Gibraltar have been active participants in the negotiating process, and their agreement on the outcome has been treated as indispensable by the EU and UK respectively.
Ever since Spain ceded Gibraltar to the UK in 1713, relations between the territories have often been characterised by mutual distrust. At times the relationship has been highly acrimonious, especially whenever Spain has intensified its efforts to recover Gibraltar by military or political means. The fact that the parties have reached agreement on the movement of persons and goods across the Gibraltar/Spain border is therefore a historic diplomatic achievement.
The legal text is not yet finalised, but according to the Joint Statement the Agreement will include provisions on:
• The movement of persons. The physical infrastructure of the Gibraltar border will be removed, and Gibraltar will effectively be incorporated into the Schengen zone. This will entail dual checks at Gibraltar port and airport, with Schengen checks being carried out by Spain, and on the Gibraltar side checks continuing as they are today.
• The movement of goods. Gibraltar and the EU will form a customs union, thus removing the need for checks on goods. Principles of indirect taxation will also be applied to Gibraltar.
• Level playing field. The Agreement will include “level playing field” commitments across a range of areas (State aid, taxation, labour, environment, trade and sustainable development, anti-money laundering, transport, the rights of frontier workers and social security coordination). It will also include commitments on cooperation in environmental and other matters.
A fluid border for people and goods will bring immediate benefits to residents of Gibraltar and the Campo de Gibraltar. In the longer term, the deal could unlock significant social, economic and cultural opportunities.
The Agreement will not come into force until it has been signed and ratified by the parties according to their “internal procedures”. On the UK side, these internal procedures will presumably include a requirement for approval by the Gibraltar Parliament.
This week also saw another significant (if less momentous) development: the removal of Gibraltar from the EU Commission’s list of high-risk jurisdictions. This follows from the whitelisting of Gibraltar by the FATF last year. Gibraltar’s removal from Spain’s list of ‘non-cooperative jurisdictions’ (formerly labelled as tax havens / ‘paraisos fiscales’) is surely long overdue.
If you require advice on how the treaty may affect you or your business, please do not hesitate to contact us.
