Govt sets out transitional rules for goods ahead of treaty, as GSD flags business unease 

The Government of Gibraltar has set out transitional arrangements for goods in the run-up to the expected entry into force of the treaty on Gibraltar’s post-Brexit relationship with the European Union. 

In a technical notice issued to the business community on Monday, the Government outlined how goods already in transit, in storage or on the market in Gibraltar will be treated once the treaty takes effect. 

The expected date for the entry into force of the treaty is April 10, coinciding with the expected date of full implementation of the EU’s Entry and Exit System (EES), the EU new automated border control system. 

Political agreement on the treaty was reached on June 11 2025 between the Governments of Gibraltar, the United Kingdom and Spain, together with the European Commission, with the treaty text agreed in December 2025.  

Under the agreement, Gibraltar port and airport will operate dual Gibraltar and Schengen border checks for persons, removing checks at the land frontier with Spain. For goods, the treaty will establish a customs union between the EU and Gibraltar, alongside agreed principles on indirect taxation including tobacco.  

The Government said the technical notice was being issued ahead of publication of the full treaty text to provide some clarity to businesses, alongside work carried out through the Business Transitional Advisory Group established in early 2025.  

The notice confirms that the treaty’s rules on the transit regime, transaction tax and compliance with EU standards will not apply to goods whose movement to Gibraltar started before April 10 2026 but ends afterwards, for a period of two months.  

Those goods may be sold in Gibraltar during that time without transaction tax, excise duty where applicable, or compliance with EU standards, but after two months they can only be sold if they meet EU requirements.  

Goods covered by a certificate of exemption from import duty issued under Regulation 8, Part 3 of the Integrated Tariff Regulations 2017 will not be subject to the transaction tax for the duration of the certificate or for three months after April 10 2026, whichever is earlier.  

After that, any such goods imported for those projects will be subject to the transaction tax on import into Gibraltar.  

Goods already on the market in Gibraltar before the treaty enters into force will not initially need to comply with EU standards, but only for a three-month period after April 10 2026.  

After that, they cannot be sold in Gibraltar if they do not comply with EU rules.  

The notice also addresses goods in bonded warehouses or temporary storage facilities before the treaty takes effect.  

These can continue under existing Gibraltar legislation provided they are discharged from bonded warehouses within two months of April 10 2026, and that temporary storage ends within thirty days of the goods being placed there.  

However, the treaty will apply to the release of those goods for free circulation, the discharge of any special procedure and any re-export from Gibraltar, and will also apply if a trader wishes to keep the goods in a warehouse beyond those periods.  

The Government will hold a treaty briefing for the business community on Wednesday February 4 at Grand Battery House at 2.30pm, and said further details would be provided at such meetings and in subsequent technical notices as required. 

The briefing follows an earlier engagement held last week by the Minister for Business, Gemma Arias-Vasquez, together with the Attorney General, Michael Llamas, with the Business Transition Advisory Group. 

That meeting focused on the position following the conclusion of treaty negotiations, with particular emphasis on the transitional arrangements that will apply during the implementation phase.  

Wednesday’s town hall meeting is intended to extend this engagement to the wider business community, providing an opportunity to hear directly from the Government on the treaty, its implications for business and the preparations underway to support a smooth transition once the agreement comes into force.  

The meeting at Grand Battery House is open to anyone from the business community who wishes to attend, advance registration on MHCB@gibraltar.gov.gi is required. 

The Chief Minister, the Deputy Chief Minister, the Minister for Business and the Attorney General will all be present at the briefing and will be available to answer questions from members of the business community.  

“Over the past week, Government has moved quickly to brief key stakeholders on the implementation phase of the treaty,” Mrs Arias-Vasquez said.  

“This town hall briefing builds on that work by opening the conversation directly to the wider business community.” 

“Businesses rightly want clarity on what comes next, how transition arrangements will work in practice and how Government is preparing for implementation.”  

“I am grateful to the Chief Minister, the Deputy Chief Minister and the Attorney General, who were all part of Gibraltar’s negotiating team and instrumental in securing this treaty, for coming together to address our business community directly.” 

“As we move from negotiation into implementation, it is very important that businesses are kept fully informed of developments.” 

GSD 

Announcement of the briefing on Wednesday came as the GSD flagged “justifiable concerns” in the business community about what it described as a “lack of meaningful consultation and clarity” surrounding the proposed treaty. 

“In particular, there are concerns as to uncertainty in the processes and the consequent unnecessary strain on local companies, particularly the retail sector,” the GSD said in a statement.  

“Despite the significance of the possible treaty for trade, customs procedures and border operations, formal engagement with businesses has been limited.” 

The GSD said the Business Transition Advisory Group had met only three times to date, most recently last week.  

“This level of consultation falls well short of what businesses expected for a change of this magnitude,” it said.  

“Businesses fear the compressed deadline will not ensure a smooth and well-managed transition for Gibraltar’s economy.” 

The GSD acknowledged Wednesday’s briefing but said it would take place “only around 40 working days before the speculative implementation date” of April 10.  

While the meeting was welcomed, “many in the business sector view it as too little, too late”, the GSD said, adding key questions remain unanswered.  

“Is Government fully prepared? Do HM Customs and other departments have clear, fully mapped processes in place? Are guidance documents, procedural manuals and briefing notes ready for immediate dissemination to businesses?” it asked.  

It also noted that “no comprehensive sector-specific guidance” had been issued to date, leaving many business owners “unclear” about the operational changes they will be required to implement.  

The GSD noted too that the treaty has yet to be published, debated and approved in the Gibraltar Parliament, and must still be ratified by both the UK and EU parliaments.  

The treaty detail is not available for businesses to study and pore over, it said, adding: “Despite this, businesses are being asked to prepare for imminent implementation without the certainty, detail or transition support originally envisaged.” 

“Oral assurances are an insufficient basis for preparation and it would have been expected that there would be a reasonable period of time for businesses to adjust and prepare once the treaty was published and the detail could be studied.” 

“Many business owners, particularly retailers, feel they have been left to absorb the commercial and administrative risk, describing the timelines involved as ‘horrific’ and, in some cases, saying they are ‘lost for words’.”  

“A longer, phased transition period had been widely expected, but Government now appears caught unprepared, with the cost of that unpreparedness likely to fall on businesses.”  

GSD MP Craig Sacarello added: “Collectively, everyone is keen to make this work, but Government needs to up its game.” 

“Businesses need clarity, certainty and time.” 

“A calm and smooth transition is essential if the business community, and ultimately every Gibraltarian, is to benefit from the new proposed treaty.”