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Difficulties Brexit poses for Crown Dependencies’s financial services sector highlighted in Lords report

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Article Tags:
brexit
Difficulties Brexit poses for Crown Dependencies's financial services sector highlighted in Lords report

The difficulties Brexit poses for the financial services sector in the Crown Dependencies and the issue of securing regulatory equivalence where appropriate between the UK and EU has been highlighted by a Lords committee’s report.Significant financial services sectors have been the “biggest transformation” in the economies of the Crown Dependencies since the UK’s accession to the EU, the European Union Committee’s Brexit: the Crown Dependencies states.

The report quotes the Jersey government, which estimates that the island is “a conduit of something like £188 billion into Europe … equivalent to about 88,000 jobs”.

Leaders from Jersey and Guernsey are bullish about the Islands’ fortunes after Brexit, believing it possible to “continue with the terms of their existing third country relationship with the EU post-Brexit, and that, consequently, concerns over a financial services ‘cliff edge’, and over relocation, did not have the same resonance as for the City of London.”

The report states that Professor St John Bates said the Crown Dependencies might be forced to decide between equivalence with the UK and with the EU but said this is mainly a political rather than legal matter. He stated that it would require “a bit of political as well as legal sophistication—probably more political than legal sophistication. Once you have decided what you are going to do, it is fairly easy to achieve the equivalence.”

The committee’s report also covers:

  • The ability to trade freely both with the UK and the EU including in fisheries, agriculture and manufacturing

  • The ability to continue to attract EU citizens to live and work in the Crown Dependencies while maintaining the Common Travel Area with the UK

  • The UK government’s constitutional responsibility to represent the interests of the Crown Dependencies in the Brexit negotiations.

    • The Crown Dependencies are not part of the UK, nor are they included in the UK’s membership of the EU. However, the Islands have a limited relationship with the EU that is set out in Protocol 3 to the UK’s Act of Accession.As such, Brexit is set to bring an end to the Islands’ relationship with the EU, at least in its current form.

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