Effect of Brexit on Gibraltar
Effect of Brexit on Gibraltar
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Effect of Brexit on Gibraltar

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Effect of Brexit on Gibraltar

The effect of Brexit on Gibraltar concerns the status of Gibraltar after the United Kingdom's withdrawal from the European Union ("Brexit"). The UK left the EU on 31 January 2020, having formally notified the EU in March 2017 of its intention to do so. Gibraltar is not part of the UK, but unlike all other British Overseas Territories, it was a part of the European Union along with the UK. It participated in the Brexit referendum and it ceased, by default, to be a part of the EU upon the UK's withdrawal.

Gibraltar's position during the process of UK withdrawal from the European Union presented specific issues during Brexit negotiations. Gibraltar voted strongly to remain in the European Union during the referendum, and its unique situation presented potential difficulties due to the Spanish claim on Gibraltar, the large contribution of on-line gambling, offshore banking and duty-free shopping to the economy of Gibraltar, and the strong likelihood that Gibraltar would cease to be a part of the single market.

Gibraltar was not covered by the Brexit agreement made in December 2020 and formal negotiations took place until June 2025 to determine its relationship with the EU.

Until 2020, Gibraltar was part of the European Union (EU), having joined the European Communities (the forerunner to the European Union) through European Communities Act 1972 (UK), which gave effect to the Treaty of Accession 1972, as a dependent territory of the United Kingdom. Its status in the European Union was under what was then article 227(4) of the Treaty Establishing the European Community covering special member state territories, with exemption from some areas such as the European Union Customs Union, Common Agricultural Policy (CAP) and the Schengen Area. It was the only British Overseas Territory included in the European Union.

Gibraltar did not participate in the 1975 UK European Communities membership referendum, the result of which had a direct impact on the territory. Neither did it participate in any European Parliamentary Elections between 1979 and 1999, but in 2002 legislation was passed by the British Parliament which allowed Gibraltar to formally take part in the 2004 European Parliament election as part of the South West England constituency in all subsequent European elections. Following the surprise election victory by the Conservatives in May 2015, it was announced that Gibraltar would fully participate in the proposed referendum on continuing EU membership, and this was legislated for in the European Union Referendum Act 2015. Gibraltar was unique in being the only British Overseas Territory within the European Union (EU), and hence was the only such territory with the right to vote in EU elections and the Brexit referendum.

In 2015, the Chief Minister of Gibraltar, Fabian Picardo, suggested that Gibraltar would attempt to remain part of the EU in the event the UK voted to leave, but reaffirmed that, regardless of the result, the territory would remain a British overseas territory. In a letter to the UK Foreign Affairs Select Committee, he requested that Gibraltar be considered in negotiations post-Brexit.

Before the referendum, José García-Margallo, the Spanish minister of foreign affairs at the time, stated that in the event of Brexit, Gibraltar would not have access to the Single Market unless a formula giving Spain co-sovereignty were agreed for a transitional period. After the referendum, he saw the result as increasing the chance of a Spanish flag on Gibraltar. He also said Spain would seek talks on Gibraltar, whose status is disputed, the "very next day" after a British exit from the EU.

The European Union (Referendum) Act 2016 (Gibraltar), was passed by the Gibraltar Parliament and implemented in Gibraltar after the European Union Referendum Act 2015 was passed by the UK Parliament.

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