UK–EU agreement on Gibraltar: What has been agreed?

Stefano Fella

The UK, EU, Spain and Gibraltar announced on 11 June 2025 that they had agreed the core aspects of a future formal treaty between the EU and the UK in respect of Gibraltar. It involves removing the need for border checks between Spain and Gibraltar while enabling EU/Spanish checks at other entry points into Gibraltar.

Gibraltar is a British Overseas Territory. It is bordered by Spain to the north and sits at the entrance to the Mediterranean.

What was agreed?

The agreement will remove all checks and controls on people and goods circulating between Spain and Gibraltar and establish a customs union between Gibraltar and the EU.

There will be two sets of checks for people arriving at Gibraltar airport and port: Gibraltar authorities will continue to carry out their own checks and the Spanish authorities will carry out Schengen area checks on behalf of the EU. The new arrangements will involve close cooperation between the EU/Spanish and Gibraltar border, law enforcement and customs authorities.

Other areas covered by the agreement include taxation, the rights of frontier workers (those who cross the Spain–Gibraltar border for work) and ensuring a “level playing field” between Spain/the EU and Gibraltar on issues including state aid, labour rules and the environment. These arrangements reflect commitments made in a framework agreement announced by the UK and Spain on 31 December 2020 (PDF).

The UK Government said that the June 2025 agreement guarantees full operational autonomy for the UK’s military facilities in Gibraltar, including its RAF base. The Foreign Secretary said that the military base will “continue to operate as it does today”.

He also said the UK and the EU had agreed a clause “explicitly protecting” UK sovereignty over Gibraltar. Spain disputes UK sovereignty over Gibraltar.

Will Gibraltar be part of the Schengen area?

Gibraltar will not join the Schengen area under the agreement, and Foreign Secretary David Lammy told the House of Commons that this “was never on the table”. He said that immigration, policing and justice in Gibraltar will remain the responsibility of Gibraltar’s authorities.

The Schengen area is an area without internal border checks on the movement of people, comprising all EU member states except Ireland and Cyprus, plus Iceland, Norway, Switzerland and Liechtenstein. Membership of Schengen also requires the adoption of a broader legal framework covering cross-border police and judicial cooperation with EU institutional oversight.

However, the Foreign Secretary confirmed that time spent by UK nationals who are not residents of Gibraltar in Gibraltar will be counted as part of the time-limited allowance for short stays in the Schengen area. Citizens of countries outside the EU or Schengen area, including the UK, can only spend 90 days in the Schengen area in any 180-day period.

The EU sees the Schengen checks at arrival points into Gibraltar as necessary to ensure that anyone entering Gibraltar and then crossing into Spain complies with rules on staying in the Schengen area.

Why was an agreement needed?

As Gibraltar is a British Overseas Territory, it left the EU along with the UK in January 2020, although Gibraltarians had voted overwhelming to remain in the EU in the 2016 UK referendum on EU membership.

At Spain’s insistence, Gibraltar was not covered by the Trade and Cooperation Agreement (TCA), which sets out arrangements for the UK and EU’s post-Brexit relationship. The UK Government described an agreement on the EU–Gibraltar relationship as “the last piece of the EU exit jigsaw” (PDF).

The Gibraltar Government welcomed the agreement, with Chief Minister Fabian Picardo stating that it would “bring legal certainty to the people of Gibraltar, its businesses and to those across the region who rely on stability at the frontier”.

Economic importance of an open border for Gibraltar

Since the vote to leave the EU, Gibraltar’s Government has stressed the importance of maintaining an open “fluid” border between Gibraltar and Spain, given the importance to Gibraltar’s economy of frontier workers residing in Spain but working in Gibraltar. These number around 15,000 people, over half of Gibraltar’s workforce.

It has also emphasised the importance of access to the EU single market for key sectors of its economy, notably services.

Interim measures have been in place since the UK left the EU: Spain has allowed Gibraltar residents to continue to cross the border without the passport stamping normally required to enter the EU/Schengen area, and Gibraltar has reciprocated for Spanish residents coming into Gibraltar. There have, however, been complaints about the Spanish authorities tightening checks.

New EU entry/exit system

All sides have stressed the importance of reaching an agreement before the EU implements its new entry/exit system (EES). This is an automated border system involving biometric checks, which Spain would need to implement at the border with Gibraltar if there were no agreement on different arrangements. The new EES had been scheduled to begin in November 2024, but this has been postponed and a phased-in launch is now envisaged from October 2025.

David Lammy said that without a solution, the EU’s new border system would have introduced a hard border between Spain and Gibraltar, at which every individual’s passport would be checked and goods also subject to “time-consuming customs checks”. He said this would “wreck the territory’s economy and possibly cost it hundreds of millions of pounds a year”.

What happened in the negotiations?

UK–EU negotiations on the proposed agreement began in October 2021. There have since been 19 formal negotiation rounds as well as other talks.

The UK and Gibraltar adopted a joint approach to the negotiations, with the UK Government stressing that it would not agree to arrangements that passed sovereignty over Gibraltar to another state or that Gibraltar was not content with. The Labour government reiterated this stance after it took office in July 2024.

Sticking points in the negotiations included the precise role of Spanish officials operating Schengen checks in Gibraltar and the status of Gibraltar airport, which hosts the RAF base and is managed by the Ministry of Defence.

The UK and Gibraltar objected to elements of a proposed EU mandate for talks in July 2021 that involved giving wide-ranging powers to the Spanish authorities over immigration and asylum policy in Gibraltar and powers to EU institutions to enforce relevant legislation in Gibraltar.

A joint statement in April 2024 indicated that general political lines in the talks had been agreed, “including on airport, goods and mobility”. However, negotiations continued under the Labour government in the second half of 2024, with Chief Minister Picardo indicating that the UK negotiating stance had not changed.

For further details on the negotiations see House of Commons Library briefing paper UK-EU negotiations on Gibraltar-EU relations

What happens next?

The joint statement on the agreement on 11 June 2025 said that the way was now clear for negotiating teams to swiftly finalise the full legal text. Although Spain and Gibraltar were fully involved in the negotiations, the formal agreement will be between the UK (which retains responsibility for Gibraltar’s external affairs) and the EU.

On the UK side, the Foreign Secretary said the procedure set out in the Constitutional Reform and Governance Act 2010 (CRAG) would apply, and that Parliament would be able to fully scrutinise and debate the agreement.