Legalised tobacco smuggling and loss of sovereignty: Red lines set to collide as Gibraltar’s post-Brexit with Spain treaty edges closer

AS a post-Brexit treaty on Gibraltar’s border with Spain appears to loom into sight, both sides’ fears of a bum deal may yet derail the negotiations.

Details remain scant on the outlines of what’s been described as the ‘general political lines’ of an agreement.

But it’s thought that it will eliminate the hard border between Spain and Gibraltar in exchange for relocating the Spanish border checks to the airport.

While Brits fret that this will mean they effectively lose control of Gibraltar’s border, Spaniards fear a deal that locks in the Rock’s tax haven status and effectively legalises tobacco smuggling.  

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Foreign Secretary David Cameron meets Chief Minister of Gibraltar at 10 Downing Street yesterday. Picture by Ben Dance / No 10 Downing Street

British MPs heard yesterday that David Cameron and Fabian Picardo are preparing to cave in to a deal that threatens a ‘serious diminution of UK sovereignty’.

Perhaps the most strongly-contested issue has been that of the airport, which is under full British control.

Visitors arriving by plane currently land on British soil, and only encounter Spanish officials at the border with Spain.

But proposals to move Schengen controls into the airport itself has raised concerns that arriving Brits and Gibraltarians may be forced to undergo EU biometric registration without setting foot on Spanish soil.

This could effectively hand over control of the Rock’s border to the EU and render British sovereignty ‘in name only’.

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The European Scrutiny Committee cited these concerns as it called for a pause in negotiations with Spain and the EU.

The House of Commons select committee added it remains ‘unclear whether any time spent in Gibraltar by UK nationals would count towards the 90 days in 180 days permitted for non-EU nationals in the Schengen Area’ in a letter to the Overseas Territories Minister David Rutley.

Chief Minister Fabian Picardo has tried to reassure his constituents that British sovereignty over Gibraltar will not be infringed, the anxieties remain.

Meanwhile, across the border, they have their own set of worries to gnaw on as they seek ‘an agreement, yes; any agreement, no’.

The Popular Party (PP) has likened airy talk of a ‘shared zone of prosperity’ between Gibraltar and the Campo to a Miss World contestant wishing for ‘world peace’. 

The key issues for the Spanish which have not been addressed include tobacco smuggling, tax parity, pensions, and eliminating Gibraltar’s reputation as a tax haven.

A Spanish waiter who has lived in Spain and earned €1,050 a month in a Gibraltar restaurant all his life is only entitled to a pension of €200.

The PP are demanding uniform taxation with Gibraltar, as differing tax levels could devastate the Campo de Gibraltar region – something Picardo is unlikely to agree to 

They are also concerned about the potential increase in tobacco smuggling and the implications of removing the border fence.

Tobacco smuggling is already a sore point between the two sides, as cigarettes are so much cheaper on Gibraltar.

A lack of any checks whatsoever could effectively legalise this business, they fear.

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