Background
Gibraltar is a British overseas territory. It was ceded to the Crown of Great Britain in perpetuity by the Treaty of Utrecht in 1713. Gibraltar comprises approximately 5.8 square kilometres of land and approximately 4.5 km of territorial waters.
Gibraltar is a separate jurisdiction to the United Kingdom with its own government administration and parliament. They are responsible for the transposition of the EU law into Gibraltar law in the relevant areas. Gibraltar is formally part of this South Western parliamentary consistency in European Union elections.
A new constitution was agreed for Gibraltar in 2006 with complete self-government for all areas except defence and foreign affairs. The British government is responsible for these areas. Gibraltar has a parliament with 17 elected members.
Relationship with EU
Gibraltar is not part of the European Union but has a special relationship with it. Its status is such that is as if it is an EU member for many purposes. It is a dependent territory of the United Kingdom under the Treaties. It has its own parliament and administration. The United Kingdom is responsible for its foreign affairs.
The European Union treaties apply the terms of the treaty to European territories for whose external relations a member state is responsible. The only applicable UK state territory in this context is Gibraltar. Upon accession, none of the other British overseas territories were covered not being European territory. A similar status was accorded to some non-European territories of France, Denmark, and the Netherlands which were integral parts of those states.
Exceptions were made for Gibraltar in the UK Act of Accession to the EEC including the exclusion of Gibraltar from the customs territory and in respect of VAT. The exclusion further entails the inapplicability of the treaty provisions and secondary legislation on trade and goods unless otherwise expressly provided. Gibraltar is outside the EU customs territory.
The European Union referendum was implemented in Gibraltar by legislation and held on the same day as the UK referendum under the European Union Referendum Act 2015. 95.9% of votes in Gibraltar were in favour of the UK remaining a member of the EU.
The UK government has indicated it will work on a deal that will preserve the UK access to the European Union. It is made clear that it will maintain and broaden Gibraltar’s access to the UK market post-Brexit.
Status of Citizens
Gibraltarians are British nationals for the purpose of EU law. This is so, notwithstanding that they were formerly British Overseas Territory citizens. They became European citizens on the commencement of the Maastricht treaty.
Subsequently, Gibraltarians have been granted a right to register as full British citizens and those who previously held British overseas territory citizenship was automatically converted to British citizenship. Any child born in Gibraltar after 21 May 2002 becomes a British citizen if one of his parents is a British citizen or a Gibraltarian resident.
Trade
Gibraltar is part of both the European Union and the European Economic Area for most purposes. Gibraltar translates most EU law including, in particular, those in relation to banking and financial services in which many of its business specialise. Regulations of the EU become part of Gibraltar law and are directly applicable. Gibraltar joined the Schengen area in March 2017.
Gibraltar is excluded from the customs union, common customs tariff, common agricultural policy and the requirement to apply VAT on goods and services. Gibraltar is not part of the EU customs areas nor VAT area. Goods imported from Gibraltar to the EU are subject to import Vat as if coming from outside the EU No Vat is charged in Gibraltar. Import duties in Gibraltar vary from 0 to 10%.
It is not subject to the common agricultural policy. It was not part of the Schengen area until 2017.
Gibraltar airport has been a source of controversy. It is located in part at the border. Following disagreement between Spain and UK, it was excluded from EU aviation liberalisation measures and was the subject to a joint declaration. In 2006 Spain agreed to its admission to EU civil aviation measures.
Issues with Spain
When the UK joined the European Union, Spain was not a member, the border was closed and General Franco was still the Spanish ruler. Gibraltar was a historic free port and being outside the customs union thus enabled it to maintain its status as a free port. The gate with Spain had been closed by General Franco in 1969. It remained closed until February 1985.
European Council guidelines for the first phase of negotiations made it clear that a deal in relation to Gibraltar will be subject to a bilateral agreement between the United Kingdom and Spain. Spain’s consent will also be required at certain points in the withdrawal agreement process and in the putting in place of a substituted trade agreement
Spain has proposed joint sovereignty as an overall solution. This would involve transitional joint sovereignty between the UK and Spain, with British and Spanish nationality. The statute of autonomy, which provides for a significant devolution within Spain, would be applicable. Spain will resume external responsibility for external relations after UK’s effective withdrawal from the EU. Gibraltar would remain part of the EU Border controls would disappear.
Joint sovereignty has been proposed in the past and rejected. A 2002 referendum in Gibraltar strongly reaffirmed the relationship with the United Kingdom. Since 2006 the UK has indicated that it will not take any step without prior agreement which Gibraltar. This position has been noted by the UN general assembly joint committee.
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