Here’s the full text of a statement delivered to Parliament earlier this afternoon by the Chief Minister Fabian Picardo:

With permission, Madam Speaker, I will now make a statement on the agreement for a treaty between the United Kingdom and the European Union in relation to Gibraltar. 

Background 

On the 12th June, the Deputy Chief Minister and I returned from Brussels having announced that political agreement had been reached with the European Union on a treaty setting out Gibraltar’s future relationship with the EU. 

On that day, I had joined Foreign Secretary, David Lammy, European Commission Vice, President Maros Sefcovic, and the Spanish Foreign Minister, Jose Manuel Albares, in the Berlaymont building, where, together with the Deputy Chief Minister and each party’s respective teams, we were able to reach agreement on the last remaining politically sensitive issues. 

That agreement now clears the way for the completion of the drafting of the legal text of the treaty. 

Madame Speaker I cannot emphasise strongly enough the spirit of conviviality, friendship and sheer joy shared by all four delegations in that room on that historic day in Brussels as we shook hands and congratulated each other on the job done. 

It has been tough, but we got there. 

It comes at the back of a tremendous amount of work that we have carried out since the announcement of the Brexit referendum result back on notorious date of the 23rd June 2016. 

The period since then has seen us fend off all the challenges we have faced as a Community – not least the not small matter of a world wide pandemic through which we continued to negotiate and progress. 

That included our inclusion in the Withdrawal Agreement under a specific Protocol in November 2018. 

This was a crucial achievement which meant that Gibraltar, like the UK, was able to benefit from the continued application of EU law from the date of the eventual entry into force of the Withdrawal Agreement. 

That period was from 1st February 2020. In effect, the period has gone on until now. 

Our people should never lose sight of the huge value that has provided for personal fluidity and to our economy throughout the lengthy periods of negotiation. 

The formal rounds of treaty negotiations started on 11th October 2021. 

Since then, there have been no less than 19 formal rounds of negotiations, numerous technical meetings and, more recently, sherpa meetings and meetings at Ministerial level with the teams from the European Commission and the Spanish Government. 

In the end, we were in a permanent meeting, in person and on video conferences, that lasted, on and off for 7 days. 

And, all throughout these almost 4 years of negotiations, the Gibraltar Government has worked hand in glove with the UK Government. 

A sentiment that is shared in both London and Gibraltar is that never before in our common history have we worked so closely with each other and never before has there existed such a level of knowledge of, and support for, Gibraltar across virtually all Whitehall Departments. 

My sincere thanks, on behalf of the People of Gibraltar, to the successive Conservative and Labour Prime Ministers, Foreign Secretaries and Ministers that I and my team have worked with in these years. 

All have been unfailingly loyal to the matters that the Government of Gibraltar variously set out to achieve and to protect. 

I want to particularly thank James Cleverly who worked so closely with me, and, Lord David Cameron and David Lammy who were the two who attended meetings in the new format of four in the Berlaymont each on two successive occasions. 

With the Davids at my side, little Gibraltar faced the Goliath that is the EU, not with a slingshot but with reasoned argument and the Attorney General’s encyclopaedic knowledge of EU law and practice which has been this Community’s lifeline in the negotiation. 

In particular, it is fair and right to single out also the current Minister for Europe, Stephen Doughty, for his remarkable commitment and work on this matter from the days when he was in Opposition and was fully briefed on progress. 

Moreover, Madam Speaker, I must commend the many officials in the UK negotiating team who have become like family to us in the past couple of years. 

So much so that finishing this part of this negotiation felt almost like being on the set of the last series of FRIENDS! 

The treaty 

The treaty that will now emerge, Madam Speaker, is bespoke to Gibraltar’s needs. A bespoke agreement was vital to Gibraltar. 

For that reason, it was never a desire or an option for my Government to form part of the UK’s own treaty with the EU, the Trade and Cooperation Agreement. 

As I have said many times before when I have been pressed on why we were ‘left out’ of the TCA, the fact is that the TCA delivers the opposite of what Gibraltar wants and needs after Brexit. 

I will clearly give a more detailed statement to this House once the treaty text is settled. 

Today, I would like to say this. 

Ever since we conducted our first Heat Maps, back in the autumn of 2016, on the anticipated effects of Brexit to Gibraltar, it became clear to us that achieving fluidity at Gibraltar’s land border with Spain was vital to our economic wellbeing and to our way of life. 

It was what people wanted.

It was what businesses were asking us to achieve.

It was what this negation had to be all about.

This has, therefore, been the overriding political priority of my Government since then. 

Only the worst moments of the Covid pandemic have displaced achieving that agreement as the top political priority of my Government since the autumn of 2016. 

The treaty therefore focuses on the two EU laws that deliver border fluidity: The circulation of persons and the circulation of goods.
But before I turn to that, a word on the key issue: sovereignty. 

Sovereignty 

One of the very first clauses of the treaty will be a clause that sets out, in the clearest of ways, that neither the treaty nor any action taken in application of the treaty will prejudice or otherwise affect the respective legal positions of the United Kingdom or Spain with regard to sovereignty and jurisdiction. 

I can therefore state, without any caveat, to this House, and with full confidence that nothing in the treaty compromises British sovereignty over Gibraltar. 

Not one grain of our land. Not one drop of our water. Not one breath of our air. 

That was the negotiating objective and it has been met. 

Needless to say, this was the reddest of our negotiating lines and I am glad to report that it has been fully achieved. 

You will have heard the words of the Father of the House, the Hon Sir Joe Bossano, the most stalwart defender of the protection of the British sovereignty of Gibraltar, on Viewpoint last week and the words of reassurance he expressed there. 

I need not add anything further to that. 

Circulation of persons 

Madam Speaker, on circulation of persons, the treaty will establish a common travel area between Gibraltar and the Schengen Area. 

This was our overriding objective and it has been achieved. 

Border checks at the land border will therefore disappear, both for persons travelling from Gibraltar to Spain and for persons travelling from Spain to Gibraltar. 

Gone will be the days of an aggressive Spanish Government or a Rogue Spanish Police Officer being able to strangle our economy by being tougher on passport checks, especially in application of the Schengen Border Code. 

In fact, the benefit of the absence of those checks shall be enjoyed by ALL residents of Gibraltar, whether you currently have a red ID card or a blue, green or magenta civilian registration card. It shall also be enjoyed by red ID card holders who do not reside in Gibraltar. 

We shall all enjoy free access to the Schengen Area in the same way. We shall all be exempted from the stamping of our passports. 

We shall also be exempted from the Entry Exit System and ETIAS (the EU equivalent of the ESTA system in the USA) when they become operational. 

That will also apply whenever we travel to the Schengen Area from a third country, for example, on a flight from London to Rome. Schengen IT systems will be configurated to recognise our cards. 

No visas shall be required by any Gibraltar red ID card holder or resident to travel to the Schengen Area. 

Indeed, the benefit of fluidity between Gibraltar and the Schengen Area will be enjoyed also by any visitor to Gibraltar from third countries. 

In order to achieve that full level of fluidity, border crossing points shall be set up at the airport and port since once cleared here, a person will enjoy unhindered access to the Schengen Area. 

Cumulative Gibraltar and Schengen immigration checks shall therefore be performed here. 

All persons arriving in Gibraltar from a non-Schengen country will be subject to the dual immigration controls. 

Only Gibraltar will be able to determine who comes in Gibraltar.
A Second Line Schengen Control Area shall be built as an addition to the current terminal. 

As as previously been announced, it will straddle equidistantly Spain and Gibraltar and it will become a joint operating area for our border guards and those of Spain. 

Schengen checks will be carried out principally by automated border control systems. 

In the vast majority of cases, this will be the only interaction that a passenger will have with a Schengen check. 

The cases where a physical Schengen check may be necessary are very limited, for instance, where there is a technical problem with the automated border control systems, or a Schengen alert is flagged at the automated border control machine. 

The Second Line Schengen Control Area will allow Gibraltar and Spanish border guards to carry out follow-up checks wherever necessary. 

Our power to grant red ID card is unaffected by the treaty. 

The treaty will also make it clear that we will remain responsible for issuing and renewing Gibraltar residence permits. 

Since the effect of this part of the treaty is to grant residence permit holders access to the entire Schengen Area, it is necessary and logical for the provisions on residence permits to be based on those which apply between Schengen States. 

All Schengen States are, logically, also themselves required to consult one another when they propose to issue residence permits in their respective countries. 

And, in the same way, the treaty will require us to carry out a further consultation with the Schengen States, before we issue or renew residence permits. 

The purpose of the consultation on residence permits will be to check whether the applicant poses a threat to any of the Schengen States. 

That is exactly the same reason as to why Schengen States are required to consult each other before they issue or renew residence permits. 

The threshold is very high and in keeping with that which would, in effect, prevent a citizen of one Member State from establishing themselves in another Member State. 

Quite frankly, we would not want a person who fails to pass such a high threshold test to be residing in Gibraltar. 

That, Madam Speaker, is the essence of the regime on the circulation of persons. 

It will guarantee our economic wellbeing and the way of life we are accustomed to. 

It will ensure that the 15,000 frontier workers who come to work in Gibraltar will be able to continue to do so and in the best conditions we have ever known, during our time as members of the EU. 

This will ensure the stability and growth of important sectors of our economy which depend on frontier workers, such as online gaming and financial services. 

It will also ensure the provision of our health and care services. 

And of our hospitality services. 

The chapter on circulation of persons will also establish security regimes with specific provisions on asylum applications, police cooperation, cooperation with Europol and Eurojust, judicial cooperation in criminal matters, extradition processes, freezing and confiscation of property and exchange of criminal record information. 

Madam Speaker, as the father of a gorgeous 7 year old girl, and two robust, handsome boys 13 and 10, I would not do ANYTHING that would make Gibraltar less safe. 

With a new police sub station in the area of the airport and other measures to be implemented, believe me, Gibraltar will be safer than ever under these arrangements. 

Not less safe. 

Safer than ever. 

Circulation of goods 

Madam Speaker, the second pillar of the treaty will be a trade agreement that will allow the free flow of goods between Gibraltar and the EU’s Customs Union. 

All goods imported into Gibraltar will be cleared by an EU customs point that shall be designated in the treaty. 

These will include customs points in La Linea and in Algeciras. 

Once imported into Gibraltar those goods will be in free circulation here subject only to the payment of the transaction tax. 

The transaction tax will effectively replace the current import duty regime that will disappear. 

It is not a VAT. 

EU VAT rules will NOT apply in Gibraltar. 

A formula has been agreed whereby Gibraltar will not apply a rate of transaction tax that is lower than the rate of VAT applied by any EU Member State. 

That currently stands at 17% in Luxembourg. 

We will not move to that rate immediately, but an escalator will be agreed to get us there after a number of years. 

A mechanism will also be established whereby a panel of experts will annually assess the effect of the progressive rates being implemented. 

Some goods will benefit from a reduced rate of 5% or no transaction tax at all. 

For instance, children’s clothing can be rated at 5% TT, Foodstuffs at 0% TT, Pharmaceuticals at 0% TT and Medical equipment at 0% TT. 

Special customs procedures will also exist, whereby goods brought into Gibraltar but not sold in Gibraltar will benefit from certain exemptions including the non-payment of the transaction tax. 

This will cover bunkering, motor vehicles and ship supplies thereby protecting these important sectors of our economy. 

Traders purchasing goods in Spain or elsewhere in the EU will be able to do so VAT-free. 

They will then have to pay the relevant transaction tax when they import those goods for sale in Gibraltar. 

But there will not be double taxation. 

On the other hand, individuals purchasing goods in Spain or elsewhere in the EU will pay the VAT on those goods and will not be able to obtain a VAT refund. 

Our traders will be able to sell their goods to all those coming to Gibraltar with no restrictions or allowances for so long as such goods are for their own personal use. 

They will also be able to sell their goods in the EU without the restrictions that have existed in the past and, notably, without having to pay customs duties when entering the EU customs territory. 

With regard to third country goods, the EU’s Common Customs Tariff shall apply. 

This will not, however, apply to goods which are of UK origin. 

This is a consequence of the customs arrangements we are establishing with the EU under the treaty and the fact that, under the EU-UK Trade and Cooperation Agreement, no tariffs apply on UK goods being imported into the EU. 

Other parts of the treaty 

Madam Speaker, those are the main pillars of the treaty. But the treaty will also cover other important areas. 

There will be provisions on Environmental protection, Climate Change, Labour and Social Standards, Frontier Workers and Transport. 

With respect to air transport, the treaty will open up Gibraltar Airport to flights to and from airports in the European Union. 

This means that, for the first time in our history, and directly as a result of these negotiations, we may see commercial flights operated between Gibraltar and places in the EU. 

These arrangements therefore take us beyond the short-lived Cordoba arrangements which only provided for flights to Spain. 

It is truly remarkable that we have been able to achieve this now that we are outside of the European Union and in a way which does not cross any of our red lines on sovereignty, jurisdiction or control. 

We trust that this will put to rest an issue which has plagued Gibraltar’s political history ever since Spain first opposed Gibraltar’s participation in the EU single sky package of measures close to 40 years ago in 1987. 

On that day, together with tens of thousands of our fellow citizens, I joined the demonstration to say NO to the then Airport Agreement. 

What we have agreed crosses none of the concerns that all our people had then. 

This area of policy and negotiation was ably led, Madam Speaker, by my dear friend the Deputy Chief Minister whose tenacity, understanding and skill on this issue was recognised by all around the table – not least and especially by those sitting opposite us as well as those sitting alongside us. 

The Gibraltar Team 

Madam Speaker, the Gibraltar team has been extraordinary in its ability, capacity and resilience. 

I exclude myself when I say that Gibraltar should be proud of how its team has delivered in this negotiation. 

The Deputy Chief Minster and all current and former Ministers, the Attorney General, our representative in Brussels, the Chief Secretary, the current and former Chief Secretaries, the current and former Financial Secretaries & Collectors of Customs, all have been more than equal to the tasks. 

This has been hugely important work and they have all delivered. 

As the conductor of the Gibraltar orchestra, my work has been to bring that work together but it is their work that must be recognised. 

I could not have done my part without my magnificent team at No6 who put up with so much travel, so much inability to deal with the day-to-day because of the negotiation and so much diary upheaval as a result of the need to move at the last minute. 

My deepest gratitude to all of them. 

Indeed, I want thank all who have played a role in supporting me and the Deputy Chief Minister in this negotiation and leading us to what can only realistically be described as a very positive result for Gibraltar. 

Madam Speaker, I acknowledge that in the absence of a final treaty text there will be many questions, of course. 

Madam Speaker, the government set up an email address to receive the queries of citizens about the agreement. 

That address [email protected] has already received almost 1,000 emails. 

The Chief Secretary is already working to marshal responses to all queries and publish an FAQ based on the most frequently asked questions coming into that address. 

Madam Speaker, 

For all of the reasons above, I commend this statement and the agreement it refers to, to this House and to the People of Gibraltar.