Guernsey and Jersey have never been part of the EU or the European Economic Area (EEA), so the islands' fundamental position is not changed by the UK's departure from the union.
The islands were however part of the EU Customs Union in accordance with Protocol 3 to the Act of Accession to the European Economic Community of 1972.
In practical terms, other than in relation to the free movement of goods and the requirement to treat all natural and legal persons from the EU in the same way as natural and legal persons from the UK, Guernsey and Jersey were already treated as jurisdictions outside of the EU and the EEA before Brexit.
On 31 January 2020 at 11 p.m., when Big Ben failed to bong and the UK left the EU, the Withdrawal Agreement that had been negotiated between the UK and the EU came into effect.
Guernsey and Jersey fall within the scope of the Withdrawal Agreement, and it is also expected that the islands will fall within the scope of the Political Declaration on the framework for the future relationship with the European Union, which includes arrangements for market access for financial services under equivalence decisions under existing EU regulatory frameworks.
While the framework for the future relationship is developing and being negotiated, there are some key points to consider:
- Businesses within the islands will largely be concerned with the trade of services with EU countries, in which context we have never been part of the EU and have always been treated as a "third country"
- Up until 11pm on 31 December 2020, EU nationals and their family members will still be able to enter the Islands to live and work (subject to each Island's right to work laws), just as they do now. After that date, to remain living and working in the Islands lawfully, they will need to apply by 30 June 2021 at the latest for settled or pre-settled status under the relevant Island's EU Settlement Scheme. A new mobility agreement may be agreed in the future relationship between the UK and the EU, covering for example temporary movement for work, which will have an impact on the Islands, but it is far from clear what that agreement is likely to be.
- It is possible that discussions on equivalence in terms of financial services regulation will open new markets to the islands if the UK is granted equivalent status to the EU, and the islands are recognised in a similar way as the UK.
Until 31 December 2020, the UK and the EU are in a transition
period, during which the UK is no longer an EU Member State. For
Guernsey and Jersey, the rights and obligations in relation to the
EU Customs Union under Protocol 3 are continuing during the
transition period.
It is business as usual, there is no change in the islands' trading relationships and people can move between Guernsey, Jersey and the EU as they did before Brexit.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.