|General Information > Constitution and Legal System|
Gibraltar has achieved political stability and a solidarity with Britain which has been growing since its capture in 1704. The Rock of Gibraltar was formerly ceded, in perpetuity, to Britain by the Treaty of Utrecht of 1713.
Gibraltar is a peninsula with approximately 3 square miles situated at the southernmost tip of Spain. It is poised between two continents guarding the gateway to the Mediterranean and is one of the legendary Pillars of Hercules. Its population is approximately 30,000 enjoying a typically warm Mediterranean climate. Most inhabitants are bilingual in English and Spanish although the official language is English.
Gibraltar enjoys a special relationship with the European Union. Whilst Gibraltar under Article 227(4) of the EEC Treaty is within the European Union by virtue of being a European territory for whose external relations Britain is responsible, Article 28 of the 1971 UK Accession Treaty relieves Gibraltar from the common customs tariff, the common agricultural policy and the harmonisation of turnover taxes, in particular VAT.
European Economic Area
Gibraltar is within the European Economic Area. There is no doubt that it forms part of the Single European Market for services, including financial services. That is accepted by the Commission in Brussels and by all Member States. In order to reap the economic benefits which that can bring, it is important for Gibraltar to be in a position whereby it can take full advantage of its position and for its financial institutions to be able to passport their services throughout the European Economic Area.
A considerable amount of time and effort has been, and is being, expended on the difficult task of transposing into Gibraltar law all European Union Directives that relate to financial services. The assistance and co-operation of the UK has been plentiful and its substantial experience is helpful in ensuring that the required standards are achieved in Gibraltar's legislation.
It is hoped that all the necessary legislation will be in place, and other obstacles cleared, in the not too distant future so that minds can focus on the future development of the finance centre and the Government of the United Kingdom can be in a position to promote and defend Gibraltar's interests within the European Economic Area, as it has undertaken to do when the legislative and supervisory requirements are satisfied.
The Treaty of Rome applies to the European Territories for whose external relations a Member State is responsible, unless such a territory is specifically excluded. Hence Gibraltar's inclusion in the European Union and the European Economic Area. Although Gibraltar is a separate jurisdiction from the United Kingdom, in the eyes of other Member States, the United Kingdom and Gibraltar are one and the same Member State.
Currency and Exchange Control
Gibraltar's currency is the Gibraltar pound. The sterling pound is also accepted in Gibraltar on a one to one basis with the Gibraltar pound. There are no exchange controls in Gibraltar.
Gibraltar enjoys a sophisticated communications system boasting the most up to date telephone and satellite communication systems as well as regular air services to London.
Political and Legal System
Britain is responsible for Gibraltar's defence and foreign policy. Britain appoints the Governor who is a representative of the Crown in Gibraltar. However Gibraltar is self governing and its democratically elected House of Assembly enables Gibraltar to maintain its independent tax status and enact laws independently of Britain thereby ensuring the development of Gibraltar as a finance centre. The legal system is based on the common law and statute law of England and therefore embodies the advantage and security of British company and trust law.
Gibraltar's Sovereignty is assured by the preamble to the Gibraltar Constitution Order 1969 in which Britain assures the people of Gibraltar that Britain will never enter into arrangements under which the people of Gibraltar would pass under the sovereignty of another state against their freely and democratically expressed wishes.
The Constitution governs the protection of fundamental rights and freedoms of the individual including freedom of conscience and expression. It also governs the appointment of the Governor and the Deputy Governor, the legislature, the executive, the judicature, finance and the public service.
The Legislature of Gibraltar consists of the Governor and the Gibraltar House of Assembly. The Assembly consists of the speaker, the Attorney General and the Financial and Development Secretary as ex-officio members, and 15 democratically elected members.
The power of the legislature to make laws is exercisable by bills passed by the assembly and assented to by the Governor on behalf of Her Majesty. Whilst the executive authority vests in the Governor it is the Chief Minister and usually 7 Ministers which constitute the Government of Gibraltar with the remaining 7 elected members constituting the opposition. The present Government of Gibraltar, unlike previous Governments, consists of 8 full time Ministers responsible for defined domestic matters.
The Court System
The Supreme Court of Gibraltar has unlimited jurisdiction to hear and determine any civil or criminal proceedings under any law. It presently consists of two Judges, namely the Chief Justice and an additional Judge appointed by the Governor.
The Court of Appeal consists of a President and a number of Justices of Appeal. The Chief Justice of the Supreme Court is an ex-officio member of the Court of Appeal for all purposes except for the purpose of constituting the Court of Appeal for the hearing and determination of an appeal from his own decision. For the purpose of any determination of the Court of Appeal an uneven number of Judges shall sit which shall not be less than three.
The constitution governs the instances where, as of right, an appeal shall lie from decisions of the Supreme Court to the Court of Appeal and thence to Her Majesty in Council and the instances where the leave of the Supreme Court or the Court of Appeal is required.
The lower courts of Gibraltar consist of the Court of First Instance, which is similar to the County court in the United Kingdom, the Coroner's Court and the Magistrates' Court.
Common Law and Statute Law
The legal system of Gibraltar is based on the common law and statute law of England. In 1962 the English Law (Application) Ordinance was passed declaring the extent to which English law is in force in Gibraltar. The common law and the rules of equity from time to time in force in England apply to Gibraltar subject to any modifications or exclusions made by Her Majesty in Council, an act of Parliament or an Ordinance passed by the House of Assembly of Gibraltar.
In all causes or matters in which there is any conflict or variance between the common law and the rules of equity with reference to the same subject, the rules of equity prevail. The Ordinance further lists in its schedule the statute law of England which applies to Gibraltar.
Whilst the legal system is based on that of England the statute law has developed differently insofar as the House of Assembly has enacted and amended laws to suit Gibraltar's own particular requirements. This can be seen in particular areas such as landlord and tenant law as regards the protection of the right of all Gibraltarians to a secure home balanced against the need for the development of Gibraltar as an offshore finance centre. As well as the security of a legal system based on the common law and statute law in England, Gibraltar's lawyers and accountants are trained in the United Kingdom.
Gibraltar enjoys the benefits of a fused legal profession so that barristers and solicitors enjoy the same rights and privileges as regards appearances in court and direct contact with clients. The Chief Justice may approve admit and enrol as barristers any persons who have been admitted as barristers in England or Northern Ireland or the Republic of Ireland or as advocates in the Court of session in Scotland. Likewise in the case of solicitors any persons who have been admitted as solicitors of the Supreme Court of Judicature in England or any Court of Record in Northern Ireland or the Republic of Ireland or a solicitor in administrative practice in Scotland and all such persons shall be at liberty to act also as barristers.
Financial Services Commission
With the passing of the Financial Services Ordinance and the appointment of a Financial Services Commission dedicated to regulating investment business in Gibraltar people should be confident that Gibraltar has the necessary expertise, regulation and supervision to ensure the maximum protection for the investor or client whilst at the same time ensuring the development of Gibraltar as an offshore finance centre.