The United Kingdom left the European Union on 31 January 2020, having formally notified the EU in March 2017 of its intention to do so. Gibraltar is not part of the UK, but unlike all other British Overseas Territories, it was a part of the European Union along with the UK. It participated in the Brexit referendum and it ceased, by default, to be a part of the EU upon the UK's withdrawal.

Gibraltar's position during the process of UK withdrawal from the European Union presented specific issues during Brexit negotiations. Gibraltar voted strongly to remain in the European Union during the referendum, and its unique situation presented potential difficulties due to the Spanish claim on Gibraltar, the large contribution of on-line gambling, offshore banking and duty-free shopping to the economy of Gibraltar, and the strong likelihood that Gibraltar would cease to be a part of the single market.

Gibraltar was not covered by the Brexit agreement made in December 2020 and formal negotiations took place until 11 June 2025 to determine its relationship with the EU. The treaty text for the was concluded on 12 December 2025. It started to apply provisionally on 15 July 2026, a day after its signature. On that date, the UK and EU removed routine border controls between Gibraltar and Spain, and Gibraltar started to participate in the Schengen travel area and the EU Customs Union.

History Until 2020, Gibraltar was part of the European Union (EU), having joined the European Communities (the forerunner to the European Union) through European Communities Act 1972 (UK), which gave effect to the Treaty of Accession 1972, as a dependent territory of the United Kingdom. Its status in the European Union was under what was then article 227(4) of the Treaty Establishing the European Community covering special member state territories, with exemption from some areas such as the European Union Customs Union, Common Agricultural Policy (CAP) and the Schengen Area. It was the only British Overseas Territory included in the European Union.

Gibraltar's status in EU elections Gibraltar did not participate in the 1975 UK European Communities membership referendum, the result of which had a direct impact on the territory. Neither did it participate in any European Parliamentary Elections between 1979 and 1999, but in 2002 legislation was passed by the British Parliament which allowed Gibraltar to formally take part in the 2004 European Parliament election as part of the South West England constituency in all subsequent European elections. Following the surprise election victory by the Conservatives in May 2015, it was announced that Gibraltar would fully participate in the proposed referendum on continuing EU membership, and this was legislated for in the European Union Referendum Act 2015. Gibraltar was unique in being the only British Overseas Territory within the European Union (EU), and hence was the only such territory with the right to vote in EU elections and the Brexit referendum.

Before the 2016 referendum In 2015, the Chief Minister of Gibraltar, Fabian Picardo, suggested that Gibraltar would attempt to remain part of the EU in the event the UK voted to leave, but reaffirmed that, regardless of the result, the territory would remain a British overseas territory. In a letter to the UK Foreign Affairs Select Committee, he requested that Gibraltar be considered in negotiations post-Brexit.

Before the referendum, José García-Margallo, the Spanish minister of foreign affairs at the time, stated that in the event of Brexit, Gibraltar would not have access to the Single Market unless a formula giving Spain co-sovereignty were agreed for a transitional period. After the referendum, he saw the result as increasing the chance of a Spanish flag on Gibraltar. He also said Spain would seek talks on Gibraltar, whose status is disputed, the "very next day" after a British exit from the EU.

Referendum

The European Union (Referendum) Act 2016 (Gibraltar),Act No. 2016-01 (Legislation Number (L.N.) 2016/034, as amended by L.N. 2016/035, L.N. 2016/082 and L.N. 2016/120. was passed by the Gibraltar Parliament and implemented in Gibraltar after the European Union Referendum Act 2015 was passed by the UK Parliament.

During the campaign leading up to the United Kingdom's national referendum on whether to leave the European Union (known as "Brexit"), the Spanish government warned that if the UK chose to leave, Spain would push to reclaim control over Gibraltar. The Chief Minister of Gibraltar, Fabian Picardo, warned the UK of the threat to Gibraltar's safety posed by Brexit. All three parties represented in the legislature supported remaining in the EU during the referendum and the Remain campaign was known as Gibraltar Stronger in Europe.

The referendum result within Gibraltar was declared early on Friday, 24 June 2016, by the counting officer and Clerk to the Gibraltar Parliament, Paul Martinez, at the University of Gibraltar at 00:40 CEST, making it the first of the 382 voting areas to declare, and its result was fed into the South West England regional count and then the overall UK national count. The result saw 95.9% of Gibraltarian voters opting to remain, on a turnout of 84%. Overall the United Kingdom voted by 51.9% to 48.1% to leave the European Union.

Gibraltar in the Brexit negotiations Gibraltar had no direct say in the negotiations between the UK and the 27 remaining countries of the European Union (EU27), since the duty and responsibility of dealing with foreign affairs rests with the UK, as do the duties of defence and internal security in Gibraltar.

Robin Walker MP, Parliamentary Under-Secretary of State for Department for Exiting the European Union, visited Gibraltar in March 2017 to discuss Brexit with Fabian Picardo (Chief Minister of Gibraltar) and Joseph Garcia (Deputy Chief Minister of Gibraltar).

With the impending Brexit negotiations, the House of Lords produced a report entitled "Brexit: Gibraltar".

The European Council released a series of guidelines for the EU27 on negotiations for withdrawal. Within these guidelines, core principle number 22 stated that "After the United Kingdom leaves the Union, no agreement between the EU and the United Kingdom may apply to the territory of Gibraltar without the agreement between the Kingdom of Spain and the United Kingdom". Pro-Brexit Conservative MP Jack Lopresti thought it shameful that the EU would attempt to allow Spain an effective veto over the future of British sovereign territory, ignoring the will of the people of Gibraltar. Foreign secretary Boris Johnson re-iterated the United Kingdom's commitment to Gibraltar.

Esteban González Pons, a Spanish MEP and chairman of the Brexit working group of the European People's Party, met with Ireland's Minister for European affairs Dara Murphy in May, when he (Pons) called Gibraltar a "colony" and pushed for support for the Spanish position that the status of Gibraltar is a bilateral issue solely for the UK and Spain to resolve. Ireland recognised that the issue was a bilateral one but wished to avoid parallels being drawn with the status of Northern Ireland. Murphy stated that "Ireland will address issues regarding the nature of the relationship of Gibraltar with the European Union post-Brexit as and when they arise in the course of negotiations on the future relationship of the UK with the European Union."

Key issues Sovereignty

The day after the result, Spain's acting Foreign Minister, José Manuel García-Margallo, renewed calls for joint Spanish–British control of the peninsula. These calls were strongly rebuffed by Gibraltar's Chief Minister. After the result, Spain reiterated its position that it wanted to jointly govern Gibraltar with the United Kingdom and said it would seek to block Gibraltar from participating in talks over future deals between the UK and EU.

In April 2017, British Prime Minister Theresa May reiterated that "the UK would seek the best possible deal for Gibraltar as the UK exits the EU, and there would be no negotiation on the sovereignty of Gibraltar without the consent of its people."

In April 2018, Spanish Foreign Minister Alfonso Dastis announced that Spain hoped to sign off a bilateral agreement with Britain over Gibraltar before October so as not to hinder a Brexit transition deal. Talks between London and Madrid had progressed well. While reiterating the Spanish long-term aim of "recovering" Gibraltar, he said that Spain would not hold Gibraltar as a "hostage" to the EU negotiations.

Movement over the border Questions were raised over the future of free-flowing traffic at the Gibraltar–Spain border. People Before Brexit, Gibraltar, like the UK, was outside the Schengen Area. All of the people crossing the border between Spain and Gibraltar were required to go through British and Spanish border controls. There are estimates that the total number of people commuting from La Línea in Spain to Gibraltar for work is upwards of 15,000. La Línea has an unemployment rate of 35% whereas Gibraltar has a 1% unemployment rate. With a substantial share of the territory’s workforce commuting daily across the border, concerns were raised about the future of Gibraltar's labour market and cross-border mobility. Goods Gibraltar was never part of the EU's customs union, so there were already more detailed checks on goods moving over the Spanish-Gibraltar border. Air travel In 2017 a Spanish diplomat indicated that any agreement on airline landing rights for flights between the EU and the UK agreed during Brexit negotiations would not apply to the Gibraltar International Airport. Most of the international flights using Gibraltar airport are to the UK or Morocco. There were some flights to Spanish destinations following the Cordoba Agreement, 2006, but there were none by the time of Brexit. The nearest airports in mainland Spain is Jerez Airport which has road distance from Gibraltar.

Finance industry Anticipating a loss of access to EU markets as a result of Brexit, the Government of Gibraltar received "a firm commitment from the United Kingdom government to maintain and broaden access to their financial markets," including "automatic access to the United Kingdom in banking, insurance, investment services and any other similar area where cross-border directives currently apply".

Fintech companies like Payoneer moved their offices from Gibraltar to Ireland, the main English-speaking country left in the EU, as a result of the Brexit.

On 4 March 2019, the UK and Spain signed an agreement of taxation pertaining to Gibraltar. This was the first treaty in 300 years that explicitly referred to Gibraltar. The agreement came into force on 4 March 2021 and established enhanced cooperation between Spain and the British Overseas Territory. Under the agreement Gibraltar provides Spain with regular information on those Spanish workers and assets that are registered in Gibraltar. The agreement also makes it more difficult for Spanish fiscal residents to register themselves in Gibraltar. A direct effect of this agreement was Spain taking Gibraltar off its list of tax havens.

Economic and social impacts Disruption to the fluidity of the border risked shortages in labour in key sectors such as hospitality and finance. Gibraltar's financial services industry also sought to preserve its access to EU markets. The UK Government emphasised safeguarding economic security for Gibraltar and ensuring arrangements to help those who lived there to avoid tedious border controls.

Brexit withdrawal agreement