Gibraltar: Our Place In Europe

I concluded last month's piece by promising something a little more seasonal. By that I meant that thoughts are now turning to the summer and any plans we may have for the warmer, longer days ahead.

Slightly jumping the gun I have already taken my own break – well five days of it anyway – and it was on the plane home to Gibraltar that I overheard an interesting conversation. Now please don't get the idea that I go around deliberately eavesdropping, but when two City types in suits talk loudly about our Rock, what is one to do?

"So," said the first chap, "is this your first time to the Rock?" "No," responded his colleague. "Apart from everything else it's the best duty free in the world and I always get cheap fags and a bottle. But it is confusing. Last time I could only take 200 ciggies back with me and I thought Gib was meant to be in the EU?" "Well yes," came the reply. "Sort of."

Sort of? I know that if I responded to a straightforward question from my superiors with "sort of", I'd sort of probably be out of the door before too long. But I forgave them after I had conducted a swift straw poll back at the office and discovered that there is indeed some confusion as to our position in the EU – and that's among people who live and work on the Rock. No better subject then, I thought, than our relationship with Brussels for my next article.

So let's start with a clear answer. Yes, Gibraltar is part of the EU – and has been since 1973. So why is there all the confusion? Time for a short history lesson.

The EU as we know it today began life back in the 1950s as an initiative from the European Coal and Steel Community. The 1957 Treaty of Rome, signed by the original six member states, established the European Economic Community (EEC) – more colloquially known as the Common Market. The UK wasn't party to the original agreement and throughout the 1960s any question of her joining was vetoed by then French President General Charles de Gaulle. Plus ça change. Eventually the UK was admitted to the expanded bloc in 1973 and, significantly for us, Gibraltar was included. The Channel Islands and the Isle of Man were not and this situation pertains to this day. From our standpoint, this leads to enormous advantages. A little more history follows, but just un soupçon – I promise.

In the 40 years since we joined up, a series of treaties has seen the 1973 group of nine countries expand. For example, Spain and Portugal joined in 1986 – i.e. 13 years after Gibraltar. The most significant enlargement occurred in 2004 when ten countries including Cyprus and Malta together with several states that had spent decades under the Soviet yoke joined. Still more expansion has been seen since, the latest entrant being Croatia in July 2013 so that fully 28 separate states today form what has become known as the European Union – or EU. The EU's statistical office, Eurostat, estimated the population in January 2013 to be 505.7 million and the land area in excess of 4.3m km².

Enough of the history. Let's turn to Gibraltar's membership and examine our special status. Whilst there are those who would like the present union to morph into a "United States of Europe", for most that is still a step too far; indeed some countries, including the UK, are questioning their own future within the bloc. This article would run to several pages if I started down that road so let us focus on our position as EU members today.

The EU's single market provides for the free movement of goods, services, people and capital. In order to achieve such lofty goals, an extensive harmonisation of law and economic integration has been necessary and this continues to develop. Of course the accompanying loss of political sovereignty is often cited by opponents to the ever increasing ties within the Union.

To appreciate the special status that Gibraltar enjoys, one need only compare it to the other 13 British Overseas Territories – a list that includes competing international finance centres such as the BVI, Cayman Islands, Bermuda and Turks & Caicos. Excluding Britain's sovereign bases in Cyprus, all were granted full British citizenship by the British Overseas Territories Act 2002 and are therefore citizens of the European Union, but they are not part of the EU and EU law does not apply.

A special article in the EU Treaty applies to Gibraltar – for the lawyers among you, it's number 355(3), which replaced Article 299(4) in the original Treaty of Rome. It defines and then applies treaty provisions to "the European territories for whose external relations a Member State is responsible". In practice this applies only to Gibraltar. Gibraltarians are considered for the purposes of Community law to be British nationals and, since 2004, have been entitled to vote in elections to the European Parliament. Last month, we went to the polls again as part of the UK's South West England constituency.

The Gibraltar government and parliament is responsible for the transposition of EU law into local law but international relations remain the responsibility of the UK government. Any disputes (perhaps with our closest neighbour) can end up in court at EU level where our interests are defended by our MEP and those UK government ministers and officials responsible for EU co-operation.

Gibraltar benefits enormously from this special form of membership; which leads us back to the besuited City chap on my airplane. Although an EU member, Gibraltar is outside the customs union – meaning goods must be declared and where applicable, duty paid – whether entering or leaving Spain using the land frontier or of course when travelling to or from Gibraltar by air or sea. Neither is Gibraltar part of the VAT area – meaning a lot less paperwork and cost for local businesses compared to their counterparts in other EU states – nor does Gibraltar form part of the Schengen Area. Finally, the Common Agricultural Policy does not apply to Gibraltar – after all there's not much scope for farming on the Rock.

Interestingly, it was announced on Europe Day 2014 (9th May for those of you unfamiliar with the celebration) that a consultation process is to be initiated that will consider potential membership of both the Customs Union and Schengen. Both would bring tangible economic benefits but there would be a cost, both financially and politically, so watch this space. It is another example of the ongoing development of the EU and this trend is unlikely to change any time soon.

As to the specific advantages enjoyed by Gibraltar businesses as result of our membership, access is available to European markets in the same way as in all 28 member states. Given a robust regulatory framework that I have discussed in recent columns, financial services providers are able to "passport" their services across the EU. As regular readers will know, Gibraltar is seeing growth in a wide range of financial service areas including insurance/re-insurance, captives, fund administration/management and other investment services. EU recognised structures such as Experienced Investor Funds (EIFs) and Protected Cell Companies (PCC) enhance our appeal to the international finance community.

"Passporting" of financial services simply means that locally authorised firms can provide their services in other EU states without the need for separate authorisation in those other countries. Firms regulated here by the Financial Services Commission in the banking, investment and insurance industries are able to do this by way of a straightforward notification process. This is hugely beneficial to Gibraltar-based firms because it expands their potential customer base from 30,000 Gibraltarians to over 500 million EU inhabitants, or 7.3% of the world population.

I have to avoid straying into politics in these columns but I can say this: to all those who doubt the value of the EU and would have the UK leave the bloc, do come and visit Gibraltar and consider the advantages membership affords our financial sector in particular. Many hundreds, perhaps thousands, of local jobs depend on our special status within the EU and long may that continue.

I mentioned above the consultation announced in early May relating to Schengen and the Customs Union. It is good to have those debates but we should weigh up the advantages against the costs very carefully. Personally speaking, I am proud to be a British citizen of the EU for I see its benefits here. In fact I might describe myself as being most "communautaire".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions