Starting today, a series of six articles focusing on Brexit and the impact to the Channel Islands, courtesy of Carey Olsen.
Four years, six months and eight days (and three British Prime Ministers) after the United Kingdom’s (UK) referendum on leaving the European Union (EU), the final stage of Brexit was completed.
Having ceased to be a Member State of the EU on 31st January 2020, the Agreement on the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (the Withdrawal Agreement) came to an end at 23:00 GMT on 31st December 2020 (the period during which it applied, the ‘Transition Period’), replaced immediately by the Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part (referred to as the TCA).
This article analyses the principal areas in which the Trade and Cooperation Agreement is likely to impact the Bailiwick of Guernsey (comprising the islands of Guernsey, Alderney, Sark and Herm) (‘Guernsey’) and the Bailiwick of Jersey (‘Jersey’) (referred to together, as the ‘Islands’).
Key points
The key points for the Islands following the end of the Transition Period and the entry into force of the TCA are:
- a reaffirmation of the principles of Guernsey’s and Jersey’s constitutional position with the UK (and a reaffirmation of the mutual intention of the UK and the Islands to the continued development of the Islands’ international personality);
- a new Customs Arrangement (the ‘UK-CD Customs Union’) between the UK and the Crown Dependencies (CD), enabling the Islands to enjoy the benefit of free trade agreements entered into by the UK;
- the extension of the UK’s membership of the World Trade Organisation (‘WTO’) to the Islands;
- the continuation of the Common Travel Area (‘CTA’) between the Crown Dependencies, the UK and Ireland;
- the end of the Protocol 3 arrangement;
- the entry into force of the TCA;
- the Islands remain third countries for EU financial services; and
- the new opportunities for the Islands as a result of the end of the Transition Period.
A reaffirmation of Guernsey and Jersey’s constitutional position with the UK
Guernsey and Jersey together form the Channel Islands, situated in the Bay of St. Malo, off the northwest coast of France. Although physically, culturally and constitutionally closely connected to the UK, the Islands are not (and have never been) subject to the laws of the UK, and are not (and have never been) a part of the EU.
The Islands are (together with the Isle of Man) Crown Dependencies and as such their constitutional relationship with Britain is with the legal institution of the British Crown as currently embodied by Her Majesty Queen Elizabeth II (the ‘Crown’), rather than the UK Parliament or HM Government. Whilst the entry into force of the TCA undoubtedly has implications for many aspects of the relationship that the Islands have with the EU, its effect differs from that in the UK.
The Islands are self-governing and have their own laws (including on taxation) and courts.
Jersey and Guernsey make their own domestic legislation, although certain primary legislation (a Projet de Loi) passed by their respective legislatures (the ‘States of Assembly’ in Jersey and the ‘States of Deliberation’ in Guernsey) is of no legal effect until given Royal sanction by Order in Council, made by Her Majesty acting by and with the advice of her Privy Council (through the Committee for the Affairs of Jersey and Guernsey), such Order in Council reciting the order of Her Majesty that the Project de Loi shall have force of law in the relevant island and shall be entered on the register and observed accordingly.
Traditionally, the UK has been responsible for defence and for the international relations of the Islands, including representing the Islands in external negotiations with other states and bodies, including the EU. However, this is changing. For example, the Islands have each entered into Tax Information Exchange Agreements with all 28 of the EU member states, Jersey has full bilateral double taxation agreements with 15 other countries and partial double taxation agreements with a further 12 nations, and Guernsey has bilateral taxation agreements with other jurisdictions including the US, Hong Kong, Malta and Singapore.
By a letter dated 24th December 2020 sent to Guernsey’s Chief Minister, Peter Ferbrache, the Right Honourable Robert Buckland QC MP (the Lord Chancellor and Secretary of State for Justice) emphasised that the UK’s decision to leave the EU and to enter the TCA “does not alter or affect the constitutional relationships, through the Crown, between the UK and each of the Crown Dependencies. Neither does it affect Guernsey’s participation in the TCA”.
The letter also emphasised the continued support of the UK government for the Crown Dependencies representing their own interests on the international stage[1], and to engage fully with Guernsey prior to entering negotiations under the TCA to create or amend obligations which could affect Guernsey and will only extend new or amended obligations arising under the TCA to Guernsey ‘in accordance with the established constitutional arrangements between the UK and Guernsey for consultation and consent’.
This reaffirms the principles set out in the ‘frameworks’ for developing the international identity of the Islands (entered into pursuant to the statements of intent signed on 11th January 2006 between the Islands and the UK Secretary of State for Constitutional Affairs).
Join us tomorrow for the next part in this Brexit series, focusing on customs, trade and travel.
[1] Guernsey and Jersey do not have separate international legal personality (as territories for which the UK is responsible). The UK recognises the Islands’ desire to develop their own separate international identity and has granted specific ‘entrustments’ to the Islands, pursuant to which the UK delegates to the Islands the UK’s power to enter into international agreements on the Islands’ behalf (usually in a specific and limited manner; most commonly double taxation treaties or tax information exchange agreements).
Our thanks to the Carey Olsen teams in Guernsey and Jersey for sharing their expertise and advice.
- Guernsey: Christopher Anderson (Partner), Elaine Gray (Partner), Matthew Brehaut (Senior Associate), Julia Schaefer (Senior Associate)
- Jersey authors: Robert Milner (Partner), David Patterson (Senior Associate)
