Why a no-deal Brexit has British Overseas Territories worried

In the lead up to Brexit, some five weeks away, the likelihood of the UK crashing out of the bloc without a deal is increasing. Come end of October, a disorderly exit will also have dramatic consequences for the 20 or so British Overseas Territories and exclaves.

Anguilla

Despite the vast distance, the Carribean island would be greatly impacted by a no-deal Brexit.

The majority of its 13,000 inhabitants oppose Brexit but they were not eligible to vote in the 2016 referendum.

The fear now is that they will no longer be able to cooperate so closely with the neighboring island of St. Martin, which partially belongs to the French Overseas Territories. This cooperative relationship is of absolute importance to Anguilla: Many essential products — ranging from construction materials to drinking water — are imported to Anguilla via the freight harbor in St. Martin.

Anguilla's infrastructure will certainly not be spared in the wake of leaving the European Union without a deal. The damage left by Hurricane Irma in late 2017 has still not been repaired, and there are houses and schools that are yet to be rebuilt.

The EU is the island's biggest financial donor to its aid development program and has helped support reconstruction costs.

With the uncertainty of Brexit, the voices of those calling for independence from the United Kingdom are growing louder.

Falkland Islands

The Falkland Islands lie in the southern Atlantic Ocean some 13,000 kilometers (8,077 miles) from the UK, but the archipelago is almost entirely dependent on the UK. Its currency, the Falkland pound, is tied one-to-one to the pound sterling. As an overseas territory, the British crown colony has no voting rights — including in an EU referendum.

The Falklands' economy relies not only on the sales from its livestock, wool and tallow, but also on its fishing industry.

Nearly all fish is exported to Spain and then from there makes its way to other EU countries, while a third of all the calamari bought in Spain comes from the Falkland Islands.

In the event of a no-deal Brexit, buyers would suddenly have to pay customs duty between 6%-18%, making seafood much more costly. Whether Spain, or other EU states, would still be interested in the goods is questionable.

Gibraltar

The British territory at the southern tip of Spain voted almost unanimously — with 96% — to remain in the EU.

The small colony and its 34,000 inhabitants are economically dependent on its Ibrerian neighbor: Every day some 15,000 people commute to Spain and, conversely, about 10,000 Spaniards work in Gibraltar.

The borders have been sealed before — albeit temporarily — between 1969 and 1985. But even factoring in such precedence, the consequences remain unforeseeable.

For the last 300 years, Gibraltar's sovereignty has been an issue of contention between Spain and the UK. The Gibraltar question ended up being a major stumbling block in Brexit negotiations — but London and Madrid were, at least back in 2018, able to reach an agreement. The arrangement would have seen decisions on Gibraltar also be approved by Spain.

Channel Islands and Isle of Man

This archipelago is geographically located in the southwest of the English Channel — but it is not part of the British Overseas Territories. The islands of Guernsey and Jersey, as well as the Isle of Man in the British Isles further north, are the three Crown Dependencies.

Though known for its picturesque beaches, the primary GDP is likely not from tourism — it's from being a tax haven.

On the islands of Guernsey and Jersey and the Isle of Man, many foreign companies can pay zero tax. Moreover, there are no capital gains tax nor inheritance tax. But Brexit may cause a serious headache for those seeking the tax havens, as Great Britain may not be able to protect the territories from the EU. The three Crown Dependencies could find their business model inharmonious quite quickly.