On Thursday 23 June 2016, the British electorate voted to leave
the European Union (EU). We are confident that Jersey's
financial services industry will continue to be able to operate in
both the UK and EU. As a British Crown Dependency, Jersey is not
part of the UK or EU. For financial services it has access to the
EU market through its own bilateral agreements which are
independent from the UK's relationship to the EU.
The UK held its referendum and the British people have chosen to
leave the European Union (EU).
Whilst financial markets are likely to be faced with a period of
some volatility, history has shown that Jersey has dealt well with
this in the past and will do so again.
Theresa May and her new government will decide when to trigger
Article 50, the the legal means by which the UK will leave the EU.
It is unlikely to be for some time.
Jersey will have no direct hand in the negotiations for a new
framework of relations between the UK and the EU, although it is
actively fostering close relationships with the UK decisions makers
Given the UK is our closest and most significant trading
partner, there will undoubtedly be implications in terms of both
risks and opportunities for the Island's finance industry which
is estimated to facilitate investment flows into the UK and the
rest of the EU to the tune of some Ł800 billion.
What you need to know
Prime Minister, Theresa May, has
commenced negotiations with the EU in relation to the British
The UK will need to provide notice
under Article 50 of the Treaty on European Union which then
triggers a two-year negotiation window, but in terms of legal
status the UK will remain a member of the EU for at least the next
relationship with the UK, as a British Crown Dependency, will not
be affected by the result of the referendum.
It is not envisaged that Brexit will
impact on Jersey's existing market access rights to the EU for
financial services. As a "third country" for financial
services, Jersey typically accesses the EU market through its own
bilateral agreements which are independent from the UK's
relationship to the EU. EU legislation provides for third country
access where the Island demonstrates equivalent standards.
The Government of Jersey have
confirmed that they believe the Island's best interests lie in
maintaining the substance of our current relationship with the EU,
as set out in Protocol 3, and with the United Kingdom. In the
short-term, uncertainty could result in the reduction of investment
flows into and out of the UK. However the increasingly global
outlook of Jersey's finance industry means the sector is well
placed to ride any such short-term UK contractions.
Longer-term, the traditional
strengths of the UK should result in it continuing as a major
finance centre and a desirable destination for foreign investment.
Jersey will continue to be a key functionary as investment flows
return. Furthermore, Jersey appears well positioned to continue
gaining future EU market access given the EU's commitment to
attract investment from across the world.
A former UK Foreign Office official has warned the City's financial services sector that any carving out of a sector-based agreement as part of a post-Brexit trade deal is likely to be seen as ‘cherry picking' and unacceptable to the European Union's remaining member states.
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