Spotlight on… Brexit

On Thursday 23 June 2016, the British electorate voted to leave the European Union (EU). We are confident that Jersey's financial services industry will continue to be able to operate in both the UK and EU. As a British Crown Dependency, Jersey is not part of the UK or EU. For financial services it has access to the EU market through its own bilateral agreements which are independent from the UK's relationship to the EU.

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Overview

The UK held its referendum and the British people have chosen to leave the European Union (EU).

Whilst financial markets are likely to be faced with a period of some volatility, history has shown that Jersey has dealt well with this in the past and will do so again.

Theresa May and her new government will decide when to trigger Article 50, the the legal means by which the UK will leave the EU. It is unlikely to be for some time.

Jersey will have no direct hand in the negotiations for a new framework of relations between the UK and the EU, although it is actively fostering close relationships with the UK decisions makers and influencers.

Given the UK is our closest and most significant trading partner, there will undoubtedly be implications in terms of both risks and opportunities for the Island’s finance industry which is estimated to facilitate investment flows into the UK and the rest of the EU to the tune of some £800 billion.

 

What you need to know

  • Prime Minister, Theresa May, has commenced negotiations with the EU in relation to the British exit.
     
  • The UK will need to provide notice under Article 50 of the Treaty on European Union which then triggers a two-year negotiation window, but in terms of legal status the UK will remain a member of the EU for at least the next two years.
     
  • Jersey’s constitutional relationship with the UK, as a British Crown Dependency, will not be affected by the result of the referendum.
     
  • It is not envisaged that Brexit will impact on Jersey’s existing market access rights to the EU for financial services. As a "third country" for financial services, Jersey typically accesses the EU market through its own bilateral agreements which are independent from the UK's relationship to the EU. EU legislation provides for third country access where the Island demonstrates equivalent standards.
     
  • The Government of Jersey have confirmed that they believe the Island’s best interests lie in maintaining the substance of our current relationship with the EU, as set out in Protocol 3, and with the United Kingdom. In the short-term, uncertainty could result in the reduction of investment flows into and out of the UK. However the increasingly global outlook of Jersey’s finance industry means the sector is well placed to ride any such short-term UK contractions.
     
  • Longer-term, the traditional strengths of the UK should result in it continuing as a major finance centre and a desirable destination for foreign investment. Jersey will continue to be a key functionary as investment flows return. Furthermore, Jersey appears well positioned to continue gaining future EU market access given the EU’s commitment to attract investment from across the world.
     

Links to further information

White Paper Sounds a Positive Note - 6 February 2017

CEO Brexit Commentary - 26 January 2017

Connect interview with Richard Corrigan, Deputy CEO, Jersey Finance – August 2016

TheCityUk Meeting the challenges and delivering opportunities - August 2016

Jersey Finance statement - 24 June 2016

Jersey Finance updated factsheet - Brexit: The Implications - 24 June 2016

Further information (for Jersey Finance member firms only) - 24 June 2016

Government of Jersey statement - 24 June 2016

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