Photo: Boatshed Gibraltar.
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Morocco ahoy!

This Friday (12 June) sees the 15th yacht rally to Port Smir, Morocco.

This Friday (12 June) sees the 15th yacht rally to Port Smir, Morocco, sponsored by Ocean Village and organised by Boatshed Gibraltar. Last year 34 yachts registered (although only 32 started), and there was a colourful backdrop as gunboat HMS Sabre, provided by the RN Gibraltar Squadron, provided the starting signals.

This year the event is getting bigger. HMS Scimitar will provide the starting and so far 40 boats have registered to take part. More will be welcome, although Boatshead owner John Alcantara warns that latecomers may not qualify for goodie bags, to be given out at the Skipper briefings. There will be two of these, a champagne reception on arrival in Morocco sponsored by Eroski Gibraltar and a dusk briefing with beer and canapés sponsored by Ocean Village.

At the time of writing it’s too early to predict the weather with any certainty, and it’s fair to say the event has had mixed luck in this area. Last year it was fine with light winds only. At the time of writing the forecast says light cloud, but this can change.

All comers have always been welcome. On the event’s Facebook page, Alcantara says: “Every seaworthy boat is welcome, whether sail, motor or powered by solar energy! The start will be given by a patrol boat from the RN Gibraltar Squadron at 13:00.” Unusually, Gibraltar has a public holiday for the Queen’s birthday this coming weekend, adding to the festive atmosphere as several Skippers and crews will have decided to stay in Morocco for an extra day.

The event is growing. Last year for the first time the organisers were able to donate £2000 to the Gibraltarian Red Cross, a target they’d like to exceed this year. Helping in this effort will be the addition of a charity auction for the first time this year, as crew getting to Smir (and only people completing the race) will bid for:

1. A free haul out/re-launch and three days hard standing at Isla Verde and free International anti-fouling paint. The organisers estimate that for a 12m yacht this represents nearly £1000 of value and a lot more for a larger yacht.

2. A Makita power tool combination pack with power drill, angle grinder and jig saw.

There will also be raffles of donated prizes including iPads and cameras.

The emphasis during the 25 nautical miles (40KM for the rest of us) is on safety of course but there’s a lot of fun involved too. Last year’s event was typical, with skippers calling in swiftly after the off to claim “First to Spot a Dolphin” prize as well as visiting the souks once in Morocco and claiming the “Biggest contribution to the Moroccan Economy” prize, in spite of everyone having agreed not to buy any rugs. There will be the customary fancy dress party on the evening of arrival, and people will leave on the Sunday or Monday.

Anyone interested in taking part will need to know entry fees, which go in their entirety to the Red Cross. These are £40 or €55 for yachts under 12m LOA and £50 or €65 for yachts over 12m LOA. Contact information and further details are available from the event’s Facebook page, where there is also a list of sponsors: - the page being part of the reason the event gets called the “world’s most sociable rally”, although the briefings and post-event party on the 20th will help in that area too.


We are grateful to Boatshed Gibraltar for supplying pictures from last year’s rally.

Guy Clapperton is the freelance journalist who edits the New Statesman’s Gibraltar hub. You can also find him in the Guardian, Computer Business Review and Professional Outsourcing which he edits.

Photo: Getty
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Gibraltar - impact of Brexit

Last week our editor took a general overview of some of the scenarios for Gibraltar if Britain were to leave the Euro. This week, as the atmosphere in the British Conservative Party becomes ever more toxic, Michael Castiel, partner at Hassans lawyers on the Rock, goes into more detail (this piece written before the Iain Duncan Smith resignation and subsequent arguments happened).

However unlikely it may prove, the prospect of Britain's withdrawal from the EU sends shivers through Gibraltar's financial services, gaming and tourism industries, which are at the core of Gibraltar’s economy. For, if Britain leaves the EU, Gibraltar goes too, and, should Brexit occur, it is Gibraltar’s relationship with the UK that as in the past, largely will shape Gibraltar's future.

Gibraltar joined the European Union in 1973 as part of the UK. While rights to freedom of services across borders of EU member states apply between Gibraltar and the rest of the EU, because Gibraltar is not a separate member state (and is in fact part of the UK Member State) those rights do not apply between Gibraltar and the UK. Instead a bilateral agreement, formalised almost two decades ago, gives Gibraltar's financial service companies the equivalent EU passporting rights into the UK. Accordingly and pursuant to such agreement, where EU rights in banking, insurance and other financial services are concerned, the UK treats Gibraltar as if it is a separate member state.

This reliance on the special relationship with the UK is recognised by both the Government and the Opposition in Gibraltar, and when the territory (which in this instance as part of the UK electorate) goes to the polls on 23 June, the vote to remain in the EU is likely to be overwhelming. This may have symbolic significance but realistically seems unlikely to influence the outcome. In actual terms, although some non-EU jurisdictions use Gibraltar and its EU passporting rights as a stepping stone into Europe, almost 80% of Gibraltar’s business dealings are with the UK.

But whether or not Britain maintains the 'special relationship' with Gibraltar, if Brexit becomes a reality, other factors will come into play, with the ever-present Spanish Government’s historic sovereignty claim over Gibraltar topping the list.

Recently Spain's caretaker Foreign Minister Jose Maria Margallo went on record that if the UK voted to leave the EU he would immediately 'raise with the UK the question of Gibraltar.' If this was to come about it could take one or more of several different forms, ranging from a complete closure of the border between Spain and Gibraltar, demanding that Gibraltar passport-holders obtain costly visas to visit or transit Spain, imposing more stringent border controls, or a frontier toll on motorists driving into or out of Gibraltar. The latter idea was in fact floated by the Spanish Government three years ago, but dropped when the EU Commission indicated that any such toll would contravene EU law.

Here, again, imponderables come into play, for much will depend on which political parties will form the next Spanish government. A Spanish government headed by the right wing PP party is likely to take a less accommodating attitude towards Gibraltar (the Foreign Minister having recently indicated that in case of Brexit the Spanish Government may opportunistically push once again for a joint sovereignty deal with the UK over Gibraltar) whereas a left of centre coalition will likely adopt a more pragmatic and cooperative relationship with Gibraltar in the event of EU exit.

The most significant changes to Gibraltar's post-Brexit operation as an international finance centre are likely to be in the sphere of tax, and while Gibraltar has always met its obligations in relation to the relevant EU rules and Directives, it has also been slightly uncomfortable with aspects of the EU's moves towards harmonisation of corporate taxes across member states.

Although it was formed as a free market alliance, since its inception fiscal matters have been at the root of the EU, but Gibraltar's 'special relationship' with Britain has allowed considerable latitude in relation to what taxes it imposes or those it doesn't. However, as is the case with other member states, Gibraltar has increasingly found in recent years its fiscal sovereignty eroded and its latitude on tax matters severely curtailed.

As in Britain, Gibraltar has benefitted from several EU Directives introduced to harmonise and support the freedom of establishment, particularly the Parent-Subsidiary Directive which prohibits withholding taxes on cross-border intra-group interest dividend and royalty payments made within the EU.

As a stepping stone for foreign direct investment, should Brexit come about EU subsidiaries could no longer rely on these Directives to allow tax-free dividend or interest payments to their holding companies based in Gibraltar. In the case of the UK, bilateral double tax treaties will no doubt mitigate the impact of the non-application of any tax related Directives. Gibraltar, however, is not currently a party to any bilateral double tax treaties. Accordingly, Gibraltar would either have to seek from the UK the extension of all or some of the UK’s bilateral tax treaties to Gibraltar (subject of course to the agreement by the relevant counterparties) or it would need to negotiate its own network of bilateral double tax treaties with a whole series of EU and non EU Member States. To say the least, neither of these options would be straightforward to implement at short notice and would need the wholehearted support of the British Government

Whilst Gibraltar’s economy is likely to be adversely affected should Brexit occur, there may be some potential benefits. An EU exit would result in fewer regulations and possibly may provide Gibraltar with greater exposure to emerging economies.

From a tax perspective, an EU exit would probably enable Gibraltar to introduce tax rules and incentives that are contrary to EU tax laws and would provide the Gibraltar Government more freedom to adopt competitive tax regimes that may be considered contrary to EU state aid rules. How possible or effective any such strategy would be is doubtful given the OECD driven anti-tax avoidance climate affecting all reputable jurisdictions whether within or outside the EU.

In this as well as other possible change much will hinge on any post-Brexit relationship with the UK - an issue which the Gibraltar Government addressed recently in a paper sent to Westminster's Foreign Affairs Committee. It stressed not only that 'EU membership has been an important factor in the development of Gibraltar’s economy' but also the importance of 'clarity as to the rights the British Government will protect and defend for Gibraltar in the context of its own negotiations.'