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Brexit - Tense Times for the territories

International 28 Nov, 2018 Follow News

Brexit - Tense Times for the territories

Prime Minister Theresa May specifically mentioned the Overseas Territories as part of ‘the UK family’ in reporting on the agreement reached with the European Union on the Brexit Withdrawal Agreement.


Although Gibraltar was the key reference point in that mention - due to the demands made and agreement reached with the Spanish government regarding border issues with that OT - the very fact that the Overseas Territories were at all mentioned is noteworthy…and reassuring to a degree.


The UK’s choice by a simple majority referendum in which Gibraltar (for obvious reasons) was the only territory to have participated, will have significant ripple effects across and throughout the global network that makes up the UK’s OTs network.


Funding that will now be lost from the EU, along with borders and trade, are crucial issues that will directly impact the OTs.




The thorny border conundrum between the Irish Republic (EU) and Northern Ireland (UK), plus the contentious Spanish (EU) and Gibraltar (UK) border are just two of the three the UK and Europe must to resolve in order for Brexit to be realised.


The other is Anguilla. That UK Caribbean Overseas Territory member of the UK family lies just offshore from and relies heavily on its French and Dutch European neighbours - and families by blood - for most of its trade and international travel connections.


Anguilla’s anxiety has been stated by its Chief Minister Victor Banks in a statement issued shortly after Sunday’s Withdrawal Agreement ‘deal’ between Prime Minister Theresa May and her EU counterparts.


“Post Brexit, Anguilla will become a border nation of an Outer Most Region of the EU in the guise of French St Martin and, secondly, a border nation of the Dutch nations with which it also shares direct marine borders that are, for this purpose, treated as one Dutch entity.


“The EU fully recognise the desirability of continued mutually beneficial interaction between the islands that aligns with much of its work with independent countries in the region.


“I therefore anticipate that the second phase of negotiations will reflect this mutual objective fortified by the consensus of the people in the islands."


Despite assertions from both Spain and from within the UK that Prime Minister May might have given too much leeway over Gibraltar’s border and sovereignty, both Mrs May and the Chief Minister Fabian Picardo are standing firm.


Mr Picardo is adamant that the UK has not let Gibraltar down and has dispelled the assertions by Spain's premier, Pedro Sanchez, that the UK had made concessions over Gibraltar.




The Overseas Territories are beneficiaries of millions in funding specifically set aside by the European Union for them for a range of economic and social development projects


For the territories listed in the 11th European Development Fund (2014-2020) the amount being disbursed totals 364.5 million Euros.


Brexit means that all of this will be lost.


However, the OT’s have been assured by the British government that it will fill the void, although to what extent is yet unclear as this also depends on what is eventually agreed when Brexit is finalised.


A UK government paper titled “Funding for British Overseas Territories if there’s no Brexit deal” states:


“In the unlikely event of a no deal, the UK will leave the EU Budget in March 2019. Without further action, this would mean governments and other organisations in our Overseas Territories could lose future funding for existing projects under EU programmes.


“However, the Chancellor has agreed that the UK government will guarantee funding for specific EU projects. This will provide certainty for British Overseas Territories governments and participating organisations over the course of our EU exit.”




A major report by a top global business consultancy and tax advisory firm cautions that the UK might not prioritise the tax and regulatory freedoms of the Crown Dependencies and Overseas Territories (CD/OTs) in the Brexit trade negotiations - which are still to come.


It also notes that “concerns therefore exist that the UK could even compromise on CD/OTs interests as part of a broader Brexit negotiating strategy”.




The road to Brexit is fraught with challenges, not just for the UK but also for the OTs, inasmuch as the mantra of bright future and opportunities outside the EU continue to be preached.


This also brings added urgency to the ongoing UK parliamentary inquiry into the future of the Overseas Territories, discussions about their constitutions, and the vexed issue of public registries of beneficial ownership especially in their financial sectors.

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