The Foreign Office has pledged to find a political solution to a row with Spain over fishing rights off Gibraltar after its EU partner threatened serious retaliatory measures, several directly targeting the Rock’s igaming industry.
Spain’s foreign minister Jose Manuel Garcia-Margallo told the ABC newspaper on Sunday that Spain was considering several measures aimed at financially supporting Spanish fisherman potentially affected by Gibraltar starting work on an artificial reef. These included changing the law so igaming companies operating from the British overseas territory at the southern tip of Spain would have to use Spanish servers and become subject to the jurisdiction of the Community of Madrid’s tax regime.
Garcia-Margallo also said Spain would look to introduce a €50 border-crossing fee - which would seriously impact igaming sector workers commuting across the border every day - shut Spanish airspace to Gibraltar-bound flights, impacting British executives working for UK online operators, and open a tax investigation into Spanish property owned by approximately 6,000 Gibraltarians.
The majority of the UK’s major online players have operations licensed and based in Gibraltar, including bet365, William Hill, Ladbrokes, 888, Betfair, Gala Coral, 32Red and Bet Victor. Many entered the regulated Spanish igaming market last June, paying up to 25% in gross profits. The Spanish government also squeezed €150m from foreign operators last summer by springing a retrospective tax probe while they waited for licences.
In a statement issued by the Foreign Office yesterday, the UK government said it “will not compromise on sovereignty” so long as Gibraltar’s population wished to remain British, also reminding the Spanish government to abide by its obligations under the tripartite Cordoba Agreement signed in 2006. It also said it was “seeking an explanation” from Spain over Garcia-Margallo’s reported threats of further measures targeting the overseas territory.
The latest row between Spain and the UK over the disputed territory was sparked around ten days ago when Gibraltar began dumping blocks of concrete into the sea to create an artificial reef it said would help develop local fish populations. Spain claimed the new reef would block its fishing boats and result in damage to its local fishing industry, and in an apparent retaliatory move, ramped up border checks on vehicles, resulting in waits of up to seven hours to enter the territory.
The UK subsequently complained to the European Commission about the unreasonable constraints on freedom of movement at the Spanish border.
The sovereignty of Gibraltar remains a major point of contention in relations between the UK and Spain, as Spain continues to assert a claim to the territory.
The 2.6 square mile rocky outcrop is home to around 30,000 people, with a sizeable expat community also commuting across the border from Spain every day to work in its main industries of online gambling, offshore financial services and tourism.
Article written by Katy Stirland
