Gibraltar–EU Post-Brexit Agreement

On June 11, the UK, the EU, Spain, and Gibraltar jointly declared that they had reached an agreement on the fundamentals of a future formal treaty between the UK and the EU on Gibraltar. It entails enabling EU/Spanish checks at additional Gibraltar entrance ports while eliminating the necessity for border checks between Spain and Gibraltar.

Gibraltar’s Background and Brexit Context

Gibraltar is a British Overseas Territory located on the southern extremity of the Iberian Peninsula, near the entrance to the Mediterranean. Spain has its sole land boundary. Although Gibraltarians overwhelmingly chose to stay in the EU in the 2016 UK referendum on EU membership, Gibraltar and the UK both exited the EU in January 2020.

Gibraltar was excluded from the Trade and Cooperation Agreement (TCA), which lays out plans for the UK and EU’s relationship after Brexit, at Spain’s demand. There have been 19 official rounds of negotiations since October 2021, in addition to other discussions. Therefore, “the last piece of the EU exit jigsaw” is the agreement on the EU-Gibraltar relationship.

Importance of Frontier Workers and Border Fluidity

Given the significance of the 15,000 or so frontier workers who live in Spain but work in Gibraltar, accounting for more than half of Gibraltar’s workforce, the Gibraltar government has emphasized the need to maintain an open “fluid” border between Gibraltar and Spain ever since the Brexit vote. It has also emphasized how crucial it is for important sectors of its economy, particularly services, to have access to the EU single market.

Since the UK’s exit from the EU, temporary restrictions have been in place. In exchange for Spanish citizens entering Gibraltar, Gibraltar has permitted Gibraltar residents to continue crossing the border without the passport stamping often needed to enter the EU/Schengen area.

Before the EU introduces its new entry/exit system (EES), all parties emphasized how crucial it is to agree. In the absence of other arrangements, Spain would have been required to install this automated border system, which uses biometric checks, at the Gibraltar border. The start date of the new EES was originally set for November 2024, but it was delayed. It is currently planned to launch gradually, starting in October 2025.

Schengen Area and Gibraltar’s Status

The new deal will create a customs union between Gibraltar and the EU and eliminate all restrictions and checks on the movement of persons and products between Spain and Gibraltar. People arriving at Gibraltar’s harbor and airport will undergo two sets of checks: the Spanish authorities will conduct Schengen area checks on behalf of the EU. At the same time, Gibraltar officials will continue to conduct their own checks.

All EU member states, with the exception of Ireland and Cyprus, as well as Iceland, Norway, Switzerland, and Liechtenstein, make up the Schengen region, which is an area free from internal border controls on human mobility. Adopting a more comprehensive legal framework encompassing cross-border police and judicial cooperation with EU institutional control is another requirement for Schengen membership.

Gibraltar will not become a part of Schengen. The Gibraltar government will continue to be in charge of immigration, law enforcement, and justice. To make sure that everyone entering Gibraltar and then crossing into Spain complies with the regulations on remaining in the Schengen area, the EU views the Schengen inspections at Gibraltar’s entry points as essential.

This means that the time-limited permission for brief stays in the Schengen region will include time spent in Gibraltar by UK nationals who are not Gibraltar residents. Only 90 days of any 180 days may be spent in the Schengen area by nationals of non-EU or non-Schengen nations, such as the UK.

Wider Cooperation Under the Agreement

The border, law enforcement, and customs departments of Gibraltar, Spain, and the EU will work closely together under the new arrangements. Taxation, frontier workers’ rights, and maintaining a “level playing field” between Gibraltar and Spain and the EU on matters like state assistance, labor laws, social security, anti-money laundering, transportation, and the environment are among the other topics covered by the agreement.

Regarding commodities, the agreement outlines the fundamental tenets of the future customs union between Gibraltar and the EU, abolishing checks on products and fostering close collaboration between the various customs departments. The principles of indirect taxation, including tobacco, that would be implemented in Gibraltar, are also agreed upon.

Sovereignty and Military Autonomy

The UK and the EU have agreed on a provision “explicitly protecting” UK sovereignty over Gibraltar, according to UK Foreign Secretary David Lammy. Full operational autonomy for the UK’s military assets in Gibraltar, notably Gibraltar airport, which is run by the Ministry of Defence and serves as the location of the Royal Air Force base, is guaranteed under the June 2025 agreement. Direct flights from Gibraltar to EU locations are also available.

The accord would “bring legal certainty to the people of Gibraltar, its businesses, and to those across the region who rely on stability at the frontier,” said Gibraltar Chief Minister Fabian Picardo.

According to the agreement’s joint statement, the path for the negotiating teams to finalize the entire legal text was now clear. The formal deal will be between the EU and the UK, which still has authority over Gibraltar’s external affairs, even though Spain and Gibraltar participated fully in the negotiations. Until the parties have signed and ratified it in accordance with their “internal procedures,” it will not become operative.

Economic and Business Implications

By establishing long-term legal and regulatory clarity, facilitating travel between Gibraltar and Spain, and presenting the possibility of seamless cross-border trade in goods and specific services, the agreement significantly increased investor confidence. This also strengthens Gibraltar’s standing as a reliable jurisdiction in Europe, which aligns with GERAI LTD’s international company incorporation services supporting businesses with cross-border operations.

Securing the future prosperity of the entire region is the primary goal of the future agreement. In addition to increasing trade, cross-border employment, and tourism, the removal of all checks and controls on people and goods moving between Spain and Gibraltar will solidify Gibraltar’s standing as a reliable and well-regulated jurisdiction in Europe and improve the capacity of Gibraltar-based financial services, gaming, insurance, and fintech companies to serve EU customers.

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