UK Foreign Secretary Dominic Raab reaffirmed the UK’s commitment to reaching agreement on a future treaty between the UK and European Union in respect of Gibraltar when he visited the Rock on 29 March to attend the UK-Gibraltar Joint Ministerial Council and hold bilateral talks with Gibraltar Chief Minister Fabian Picardo.
The Joint Ministerial Council was originally formed to discuss the UK’s exit from the EU, but has come into its own as a forum for agile discussion between the UK and Gibraltar across the range of shared interests. As a result of the position taken by the EU prior to Brexit, Gibraltar was not covered by the UK-EU Trade and Cooperation Agreement.
The UK, working side-by-side with the Gibraltar government, reached a political agreement with Spain on 31 December 2020 for a political framework to form the basis of a separate treaty between the UK and the EU regarding Gibraltar, which is a British Overseas Territory.
This outline agreement, currently being examined by the European Commission, will allow Gibraltar to join the Schengen zone that guarantees passport-free travel and freedom of movement to more than 400 million EU citizens. As a result, Gibraltar’s port and airport will become external borders of the Schengen area.
This will then need to be agreed by the European Council before negotiations can begin. The key issue for the negotiation is border fluidity in respect of the movement of people and goods between Gibraltar and the surrounding region.
While this treaty is being prepared, the UK and Spain have also agreed a six-month extension to three memorandums of understanding for cooperation regarding tobacco, the environment, and customs and policing, which were signed in 2018 and had been due to expire at the end of 2020.
“As a valued member of the UK family, we stand side-by-side with Gibraltar as we enter into the forthcoming negotiations with the EU on Gibraltar’s future relationship,” said Raab. “We are committed to delivering a treaty that safeguards UK’s sovereignty of Gibraltar and supports the prosperity of both Gibraltar and the surrounding region.”
Gibraltar enjoys a unique relationship with the UK through passporting rights, which allow financial service providers in Gibraltar unique access to the UK market. To prepare for Brexit, the Gibraltar government brought a new Financial Services Act into force in January 2020 under the Legislative Reform Programme (LRP).
The LRP consolidated and rationalised over 90 financial services legislative instruments into one Act and 41 sets of supporting, sector specific regulations to provide a clear, more navigable and accessible legislative framework for financial services.
The Gibraltar Finance Centre Council, which represents Gibraltar’s financial services industry, said: “A stable relationship with the EU which guarantees frontier fluidity and unhindered travel throughout the Schengen zone is to be welcomed. Coupled with bilateral access in financial services to the UK market, sensible regulation, competitive tax rates and a developing double tax treaty network, the outlook for the financial services industry and its prosperity are very positive.”