Gibraltar’s Position in Europe

Gibraltar has a special relationship with the European Community, which is different from any other colony of a member state.
Under the Treaty of Rome 1973 and the UK Act of Accession of the same year, Gibraltar was classified as a dependent territory of the United Kingdom. Although Gibraltar has its own Parliament which is responsible for passing legislation, including European Community Directives, the UK Government is responsible for Gibraltar's foreign affairs, including their relationships within the European Union.

Gibraltar is therefore not a separate EEA state but a territory for which the UK is responsible for the purpose of single market directives. So the single market directives (including the IMD) apply to it. Passporting rights apply only between EEA states, so directive passporting rights do not apply in the same way. The UK and Gibraltar have special arrangements under the Gibraltar Order, which allows rights equivalent to directive rights. The Order applies to insurers and insurance intermediaries, so Gibraltar insurers can 'passport' into other EEA territories. EEA insurers can also 'passport' into Gibraltar. The UK and Gibraltar have also concluded special “post-boxing” arrangements so that regulatory communications to other member states can pass via the UK Government.

As part of the arrangements for its attachment to Britain within Europe, Gibraltar was granted derogation from three principal elements of European law - the Common Customs Tariff. the Common Agricultural Policy (Gibraltar has no agriculture as such) and the Value Added Tax rules.

Otherwise Gibraltar has to act as a member state, albeit elements such as regulations of financial activity in theory fall under the remit of the appropriate UK authorities.

Her Majesty's Government's response to this situation has been to grant autonomy to the Gibraltar regulatory authority, the Financial Services Commission, albeit with the prerequisite that UK standards of regulations are applied.

The Commission is a statutory body corporate established by the Financial Services Commission Ordinance, 1989. It consists of the Commissioner, as Chairman, and seven other persons, four of whom shall have relevant experience in the United Kingdom and three of whom shall have relevant experience in Gibraltar.

The Commissioner is appointed by the Governor, acting with the approval of the UK's Foreign and Commonwealth Secretary, and the other members are appointed by the Governor, acting with the approval of the Foreign and Commonwealth Secretary, after consulting with the Commissioner.

The Commissioner, who is also the Commissioner of Banking and the Commissioner of Insurance, is the chief executive officer of the Commission and is charged with the responsibility of supervising institutions carrying on finance business in or from within Gibraltar. He is required to ensure that such supervision complies with any applicable obligation Gibraltar has as a constituent of the European Union and to establish supervisory standards which match those required by legislation and supervisory practice governing the provision of financial services within the United Kingdom.

In connection with regulated activities such as Insurance and Banking etc., therefore, entities authorised in Gibraltar will be able, subject to the proper procedures, to take advantage of the single European passport for financial services, and carry on activities in any other European state under its Gibraltar licence.

For further information, please contact:

Chris Johnson ACII
4 Bishop Rapallo’s Ramp
Gibraltar

Tel: + 350 75326
Fax: + 350 75190
Mobile: + 350 58452000
E-mail chris.johnson@gibraltar.gi

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