Why the Schengen New Year's Eve deal does not cede control

by Rafael Benzaquen

The UK/Spain/Gibraltar New Year’s Eve deal (“the deal”) is a complex document.
For that reason, Mr Azopardi’s ‘simple’ analysis is, self-evidently, inappropriate, as he knows. The deal purports to enable Gibraltar to benefit from Schengen without actually joining Schengen.
Likewise, it allows Gibraltar to benefit from the EU Customs Union (should it wish to) but without actually joining the Customs Union.
To achieve this, two sets of laws have to be made to co-exist: EU/Schengen – Customs Union laws on the one hand and Gibraltar laws on immigration and imports/exports on the other.
The operative word here is “co-exist” – a term that does not denote cession of control by any party.
By Gibraltar law “co-existing” with EU law, both jurisdictions are legally taking into account the existence of the other. Nothing else. Indeed, much less than has been the case until now during our period of membership of the EU where EU law was dominant over our law in all aspects, including in respect of some aspects of immigration and imports/exports.
This subtlety may be the cause of so much confusion amongst our political classes.
Both the GSD and TG refer to the surrender of “control” over our borders. This is a totally and mischievously inaccurate interpretation of the published text.
But let’s start at the very beginning. Why should Gibraltar aspire to free movement of people (and possibly also goods) with the EU? Well, Gibraltar’s geography means that Spain is our largest trading partner after the UK. The easier it is to do business with our partners the more business will be done, the more people will be employed, the more GDP will increase and the more tax will be paid.
That is the theory.
But this is not another Cordoba. This is not a “entente” with Spain. It is a deal with the EU. This is made clear in the very first paragraphs of the letters to the Council and Commission signed off by the UK and Spanish ambassadors.
The deal foresees the creation of a “common travel area” covering both Gibraltar and Schengen and (should HMGOG want) a “common customs area” covering both Gibraltar and the Customs Union. The issue is therefore ensuring Gibraltar law is compatible with Schengen and EU rules. This is made clear in paragraphs 5 and 11 and 8 and 9 of the Non-Paper attached to the Council Working Paper.
The deal is sovereignty neutral. Spain cannot use the deal to advance its claim over Gibraltar or any part of Gibraltar. This is very clearly set out in the last sentence of the Spanish Ambassador’s letter, the penultimate paragraph of the UK ambassador’s letter and paragraphs 1 and 3 of the Non-Paper.
The deal is an “understanding”, as the UK ambassador calls it in his letter or “entendimiento” as the Spanish ambassador calls it in his. It is meant to give rise to a number of other political, administrative and other legally binding agreements. This is set out in paragraphs 4, 8 and 9 of the Non-Paper.
So, why do I say that the deal does not involve any cession of control over our borders? Well, for a variety of reasons which are worth analysing in detail.
Firstly, Paragraphs 5 and 6 clarify that legislating for Gibraltar is a matter for the Gibraltar Parliament only. The EU has asked Spain to be politically responsible for ensuring Schengen rules are being honoured ‘as regards the European Union’ but this is an internal arrangement between the EU and Spain with no impact on Gibraltar law.
Secondly, under Paragraph 10 of the Non-Paper ONLY Gibraltar officers have jurisdiction within Gibraltar’s borders. ONLY Gibraltar officials can enforce the law.
Frontex officials will assist when matters affect Schengen and EU rules but with no executive powers. For Frontex to carry out any action, Gibraltar officials must have given the go-ahead first. This is set out in detail in paragraphs 13 to 15 and Annex 1 of the Non-Paper.
Thirdly, under paragraphs 4, 5 and 8 of Annex 1, ONLY Gibraltar can determine who enters Gibraltar and UK nationals will not be subject to Schengen Visa requirements when entering Schengen through Gibraltar. Of course, long and short-term visas for access to Schengen can only be given by Schengen states. But additionally, only Gibraltar can grant visas for access to Gibraltar.
Fourthly, Gibraltar residence permits are a matter for Gibraltar only. Because Gibraltar is not part of Schengen, a Gibraltar residence permit does not confer a right of residence in the Schengen area. However, Gibraltar rules regarding residence have to be aligned with Schengen rules because those residing in Gibraltar will have the freedom to access and traverse the Schengen area unimpeded – a fantastic selling point for Gibraltar going forward.
On all the Schengen aspects of the deal there can be no cession whatsoever, as we have never had any rights or obligations under Schengen to cede.
Should HMGOG choose to include a customs union in the deal, Paragraphs 13 to 15 deal with how customs arrangements would work, including that an office will be located adjacent to the airport – built straddling the two separate jurisdictions at the frontier - where Gibraltar and Frontex officials will work side by side. This is also dealt with in paragraph 2 of Annex 1.
Paragraphs 11 and 12 and 13 to 15 together set out basic principles of how the “common customs area” could work in practice. For example, the potential adoption by Gibraltar of customs and excise tariffs being “substantially” (importantly, not ‘identically’) the same as the EU’s, consideration of the adoption of VAT on certain goods and of the adoption by Gibraltar of the EU’s trade policies and restrictions and such like.
To ensure fair competition, Paragraphs 16 to 25 provide that costs such as social security rights of frontier workers achieve the minimum standards in Annex 2 of the Non-Paper, which means continuing as at today. Maintenance of environmental standards, free-flow of data and citizens rights also involve costs and the need for Gibraltar to abide by minimum standards is clearly mentioned.
Finally, the paragraphs set out the need to ensure the “traceability of tobacco”, which Gibraltar already agreed under the Tobacco MOU and every other developed economy in the world has done.
An important element set out in Paragraph 3 of Annex 1 is the need for police and judicial cooperation. This would be ground breaking recognition of the jurisdiction of the Supreme Court of Gibraltar which has been long overdue and will mean real cooperation against criminals.
Finally, Annexes 2 and 3 ensure equality of employment and social rights, which really just means the preservation of existing EU rules.
The application of these new arrangements with the EU could produce a positive and timely transformation of Gibraltar’s economy by creating new wealth for us and for the area around us.
The Government’s continued attempts to deliver a UK/EU Treaty does so deserve our support. In the end, despite the bluster and spin for the gallery, that is the conclusion that Mr Azopardi and Ms Hassan-Nahon have reached through transparently gritted political teeth.

Rafael Benzaquen is a barrister.