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Relationship with EU

In 1967 Guernsey was faced with the prospect of the United Kingdom joining the European Economic Community (EEC).

The United Kingdom Government at that time held out to the insular authorities no prospect of a limited connection with the EEC which they contended would require a modification of the Treaty of Rome which, in all inevitability, would not be granted.  It seemed in 1967 there were two options - to become part of the EEC or to seek independence.

The loss of long established virtual sovereignty was plainly at risk if the Crown Dependencies joined the EEC.  There was great concern locally.  In the event the UK's application to join was rejected. 

In 1971, when the UK Government renewed its application to join the Community, similar issues confronted the Dependencies. 

Happily, as a result of representations made to the Home Office and able negotiating by the UK Government's chief negotiator, The Right Honourable Geoffrey Rippon, a deal acceptable to the Dependencies was negotiated.

On 19th November 1971, Geoffrey Rippon addressed the States of Deliberation in special session. He said

"Under the proposals your fiscal autonomy has been guaranteed. I can say quite categorically that there will be no question of your having to apply a value-added tax or any part of Community policy on taxation."

He offered

"a choice of accepting or rejecting the terms that have been negotiated".

and stated that it was not for him

"to try to influence you in that decision, because the decision is yours, and yours alone.  I can only say to you today that I know what my decision would be".

On 15th December 1971 the States of Guernsey concurred by voting unanimously to accept the negotiated terms.

Protocol 3 to the UK Treaty of Accession to the EEC
The terms relating exclusively to the Channel Islands and the Isle of Man were subsequently embodied in Protocol No. 3 of the Treaty of Accession of the United Kingdom to the EEC, signed on 22 January 1972.

Guernsey is neither a separate Member State nor an Associate Member of the European Community. Protocol No. 3 placed the Channel Islands and the Isle of Man within the Common Customs territory of the Community and the Common External Tariff of the EEC.  Broadly speaking this means that no customs duties are applied to goods exported to members of the customs union but a common customs tariff applies to goods imported into the customs union from non-member countries.

Protocol 3 also provides that Guernsey is "within" the EU for most of the purposes of the free movement of goods (e.g. so that Articles 28, 30, 34-36 and 110 of what is now the Treaty on the Functioning of the European Union ("TFEU") apply) but outside the EU for other purposes, in particular non-customs related fiscal matters and the free movement of persons and services.  The Islands are not eligible for assistance from the Union's structural funds or under the support measures for agricultural markets.

Under Protocol 3 the authorities in the Dependencies have to treat natural and legal persons of the European Union equally and therefore in a non discriminatory manner.

Although Channel Islands are British citizens and hence European citizens, they are not entitled to take advantage of the freedom of movement of people or services unless they are directly connected (through birth, descent from a parent or grandparent, or five years' continuous residence with the United Kingdom). This means that some Islanders with a very pure Guernsey family heritage do not have freedom of movement within the EU and their passports are marked accordingly.  They are reducing in number year by year.  These passports are marked with the words "The holder is not entitled to benefit from EU provisions relating to employment or establishment".  They can of course seek work permits or secure a university place allocated to non-EU citizens.

Application of EU law
In the early years after Protocol 3 came into force, it was a relatively simple matter to identify what legislation was needed in Guernsey to implement EU Directives and to identify applicable EU Regulations falling within the scope of Protocol 3 because they tended to be made in a compartmentalised way according to subject matter. Nowadays, matters have become more complicated and a provision relating to say agriculture might be found in a Directive relating to development or climate change.

In brief, Regulations are directly applicable in the EU Member States.  Insofar as they are binding on the Bailiwick under Protocol 3, they have immediate legal effect and form part of Bailiwick law without the need to enact local legislation (see further the European Communities, (Bailiwick of Guernsey) Law 1973) as amended.

Directives on the other hand, are binding on Member States as to the result to be achieved but it is for national authorities to decide the form and methods of implementing them. In so far as they may be applicable under Protocol 3, they can be implemented by Ordinance under the European Communities (Implementation) (Bailiwick of Guernsey) Law, 1994, as amended. This means that the Bailiwick can bring relevant legislation into effect swiftly without the need for Royal Assent.  Further, under this law, the Bailiwick (meaning for this purpose the States of Guernsey in relation to Guernsey; States of Alderney in relation to Alderney and Chief Pleas in relation to Sark), has the power to implement "any provision" of EU law, whether or not it falls within Protocol 3. This means that other provisions of EU law which might, for example, be thought of interest to the Bailiwick may be brought into force under this legislation even if there is no obligation to do so under the terms of Protocol 3.  

Development of EU competencies and the Bailiwick
In 1985 the European Community initiated the single market initiative. It was a Community strategy to intensify harmonisation and it included monetary union in 2002.  It has had some impact on competition in the financial services sector.

In 1992 the Maastricht Treaty changed a purely economic community into a union embracing additional areas of co-operation.  It enacted a 3 pillar legal structure for the EU.  It included new intergovernmental sections covering co-operation in foreign and security policy, police and judicial co-operation.  In 1997 the Amsterdam Treaty consolidated Community powers and in 2001 the Nice Treaty made a number of changes to the Community's institutional structures which were indicative of an ever changing community or union.  As part of a reform agenda, a Constitutional Treaty was agreed and signed in 2004, however following its rejection by several Member States during the ratification process the Treaty was dropped. 

Following a period of reflection, the Lisbon Treaty was agreed on 2007.  The Treaty implemented some of the reforms proposed by the Constitutional Treaty such as, inter alia: giving the Union a single legal personality; adapting the institutional framework; replacing the term 'Community' with 'Union'; and creating a new architecture of treaties.  The Treaty also abolished the pillar system replacing it with categories of competence, namely, conferred, shared and supporting competences, alongside special competences such as Common Foreign and Security Policy (CFSP) and gave legal force to the Charter of Fundamental Rights of the EU.  The EU legal personality enables it to conclude treaties within its area of competence.

So far as the Dependencies are concerned it is for the Dependencies to consider the extent to which they wish to take on board any intergovernmental measures, no such EU obligation arises under Protocol 3.  It would be for the islands themselves to decide whether, and to what extent, they wished to be included in any such measures and the United Kingdom has undertaken that the islands will be fully consulted about any such measures which may affect them. No such measure will be applied to any of the islands without the consent of the authorities for the island in question.

In short and contrary to some concern expressed in the Bailiwicks of both Jersey and Guernsey at the time, the Channel Islands position in relation to Protocol 3 remains as originally set out and is unaffected by the Lisbon Treaty.