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The UK has agreed that Spain will check goods entering Gibraltar as part of a deal to remove border controls for people moving between the two territories, according to British and European officials.
The Rock’s airport will be almost entirely closed to cargo, and trucks and ships will need to stop at Spanish customs near the border, said a European Commission official.
The British territory will also lift its sales tax from 3 per cent to at least 15 per cent within three years of the deal’s ratification to avoid unfair competition with Spain where VAT is higher, the European official added.
The Gibraltarian authorities have backed the deal since almost all goods already enter by land, the European official said, and the changes will allow its citizens to travel unhindered to Spain and to work in bordering areas.
A UK official confirmed that Gibraltar had accepted the terms on sales tax and that goods imported to the territory will be checked and cleared by EU customs officers in Spain. A Gibraltar official did not immediately comment.
There will be exemptions from checks for particular products, such as cars that are imported, refitted and exported again — a key segment of the Gibraltarian economy. It will also be possible to ship goods with a stop at the nearby Spanish port of Algeciras for checks.
Gibraltar’s port, which occupies a strategic position at the gateway to the Mediterranean, is a key asset for reasons other than cargo imports. It hosts British naval vessels, cruise liners and luxury yachts, and is a key fuel bunkering hub for vessels leaving and entering the Mediterranean.
The territory was handed to the UK by the Spanish crown in 1713. While Spain claims sovereignty, the vast majority of its 34,000 people want to remain British.
UK Prime Minister Sir Keir Starmer praised the deal unveiled on Wednesday, which solves one of the last big post-Brexit conflicts. Gibraltar’s first minister Fabian Picardo has also strongly supported the deal.
Kemi Badenoch, leader of the opposition Conservative party, said on Thursday that while she had not yet seen the full details of the deal she was reassured by the fact Picardo has supported it.
“I do actually trust his judgment,” said Badenoch, who was trade minister in the previous government. “My concern is that whenever Keir Starmer signs a deal it’s never a good deal. We always lose out.”
Spanish border guards will check passports at the airport and port and can refuse UK citizens entry in some circumstances, since the abolition of the border in effect puts the territory in the EU’s borderless Schengen zone.
The agreement, which must be approved by EU member states and the European parliament, was necessary if Spain was to allow a wider reset of relations with London, the European official said.
“It would have been very difficult for . . . a number of states like Spain to conclude new agreements with the UK without finding a solution for Gibraltar,” they said.
Madrid has been blocking British entry into some EU defence co-operation agreements because of its military presence on the Rock, where it has a naval and air base.
At a summit last month the EU and UK agreed to negotiate a veterinary deal to smooth trade in food and animals and a security pact that could allow the UK defence industry to access EU money.”
