Page 6 - Layout 1

News
Guarantees protect UK
market access post Brexit
The British government repeated parliamentary guarantees that Gibraltar will have continued, and even enhanced access to the UK, post Brexit to protect more than 90% of the territory’s financial services and eGaming companies
insurance companies wanting to continue to write books of UK business looking at establishing a Gibraltar insurer to passport into the UK post-Brexit. As a contingency strategy, some insurers have asked whether it would be possible to obtain a provisional Gibraltar license that would be subject to opening an office, having senior management in Gibraltar and meeting requisite solvency capital requirements, in line with GFSC mind and management requirements for all financial services businesses.
A move by the Bank of England to consider existing well-established EU insurers and banks trading in the UK to operate as ‘Third Country Branches’, a new classification not linked to reciprocity with the EU “is not necessarily bad news for Gibraltar’s pitch to be a springboard into the UK”, Ashton maintained. Dependent on the timing and volume of such moves, Gibraltar’s ability to process license applications quickly and provide easy access to the regulator, along with its low tax environment, “still makes the territory attractive by comparison”.
Larger insurance businesses
There is also interest from new applicants wanting to establish larger insurance companies in Gibraltar and license applica- tions being prepared “by investors with significant financial resources, which is different from many previous insurance start-ups”, the implication being they are expecting larger volumes of business in their early years rather than a more gradual expansion of premium income.
In January, a global multi-line reinsurer with headquarters in Bermuda writing all major property, casualty and specialty lines of business, Qatar Re exchanged contracts to buy four insurance companies in Gibraltar’s Markerstudy Group, which underwrites more than 5% of the UK motor market.
As Qatar Re’s chief executive, Gunther Saacke, noted: “The transaction will enable us to write UK business under any post-Brexit scenario.”
At the same time, Gibraltarian Nigel Feetham, a partner in Hassans law firm, has been exploring the potential for some existing Gibraltar insurers that undertake EU business to establish mini-hub operations across the Spanish border in La Linea so they can continue to access EU markets post- Brexit no matter what the outcome on access. Ray Spencer
In a statement marking a year before leaving the EU, Gibraltar Chief Minister, Fabian Picardo explained negotiators had
“secured the continuation of our current trade arrangements with the UK, enhanced in some areas, not least in online gaming and insurance, where cooperation on regulatory outcomes with the UK will be closer and more aligned to be mutually beneficial.”
Spain last year gained EU veto rights on any Gibraltar-related aspect of the Brexit agreement it didn’t like, but the UK and EU March Withdrawal Agreement ensures EU law will continue to apply to the UK, including Gibraltar, as if it were still a Member State during the transition period to end-December 2020.
Mechanisms for Gibraltar market access to the UK are in place until the transition period ends, “and work commenced on updated mechanisms for thereafter”, Picardo asserted.
It was "better than excellent progress at this stage in the process of leaving the EU” he declared.
Spain’s foreign minister, Snr Alfonso Dastis, told Reuters in April that he hoped “to reach an agreement with the UK on Gibraltar by October”, including on joint use of the airport and the EU ‘open skies’ policy.
Snr Dastis added: “We want to be constructive because our objective, as we’ve said from the outset, is to preserve as far as possible the rights of citizens and have no disruption to their lives or their jobs, and even to create a space for shared prosperity.”
Relief over frontier
That statement, backed by interviews with the BBC and Financial Times, has come as a relief as 12-13,000 people cross the border daily from Spain to work in Gibraltar.
By end-March, Paul Astengo, senior executive at Gibraltar Finance (GF), a government development body, had visited San Francisco, Miami, Tel Aviv, Singapore, Hong Kong, and will go to Amsterdam, New
“DLt impact wider than might be expected” Paul astengo, Gibraltar finance
York, and Lisbon before end-July, with more visits to be planned thereafter.
Primary interest has been in the jurisdiction’s Distributed Ledger Technology licensing since January, which has already resulted in some 30 applications for a wide range of blockchain-related businesses.
“Although this activity was not started as a result of Brexit – I’ve been working on it for 4 years now - the coincidence of timing with Brexit is very convenient.” The first wave of license applications probably will become operational by June.
Some DLT / blockchain businesses will be “of quite significant size”, Astengo revealed, "and the impact on areas of privatised businesses much wider than might be expected.
“For example, DLT is ideal for use by charitable concerns with large-scale projects – and typically they will use Foundation status which will give a boost to trusts, banking, employment and social aspects, including the potential for new courses relat- ed to DLT at Gibraltar University”, he said.
The wide-scale application of blockchain outside of financial services is anticipated, including having an impact on other areas, such as social, health, education and philanthropic endeavors on a global scale.
GF insurance expert, Mike Ashton, declared: “We are seeing a number of EU
6
Gibraltar International
www.gibraltarinternational.com