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Gibraltar-Spain Tripartite Forum Abandoned?

by Jason Gorringe,, London

17 May 2012

The Gibraltar government has said that the introduction of a new Spanish government of the People's Party has caused the disintegration of the tripartite forum between Spain, Gibraltar and the United Kingdom. The Forum had previously been credited with yielding improvements in relations between Gibraltar and Spain after more than a century of fractious relations.

The Forum had begun to build a framework under which Gibraltar and Spain could discuss contentious issues, including maritime borders, customs policy, and, critically, tax information exchange. It was thought that through a tax information exchange agreement, relations between Spain and Gibraltar could be markedly improved, including through recognition by Spain of Gibraltar's status as a transparent, highly-regulated international financial centre, independent from the United Kingdom.

However, the newly-appointed Prime Minister, Mariano Rajoy said prior to his election that he would seek to undo the work of the previous government, and reduce Gibraltar's powers in trilateral talks on cooperation. He stated that his government would seek to restore the idea of 'Two Flags (the United Kingdom and Spain), Three Voices'. This would remove Gibraltar's power of veto over discussions pertinent to the territory, and force it to mediate issues with Spain through the United Kingdom, potentially reducing its influence in discussions. The position would seek to undermine Gibraltar's autonomy, after several years of disputes in which Spain has unsuccessfully argued that Gibraltar should not be recognized as a territory separate from the United Kingdom.

In a statement last week, dismissing the comments made to the Spanish press by Spanish Foreign Minister Jose Manuel Garcia-Margallo, the Gibraltar government underscored that it, and the United Kingdom government, remain committed to the Trilateral Forum, and said instead that the lack of participation by the newly-appointed Spanish government had led to the recent 'abandonment' of the Forum.

TAGS: tax | economics | tax information exchange agreement (TIEA) | Gibraltar | law | international financial centres (IFC) | United Kingdom | offshore | Spain

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