Gibraltar is a British territory within the European Union.

• Gibraltar is required to implement in full all EU legislation on financil service regulations and related matters such as anti-money laundering.

• Gibraltar therefore co-operates on matters such as insider dealing and other investigations carried out under EU directives.

• By law, Gibraltar is required to match United Kingdom standards of financial supervision where EU legislation applies.

• The Financial Services Commission (FSC) is appointed by the United Kingdom Government.

Constitutionally, Gibraltar is a Crown Colony with internal self-government, the United Kingdom being responsible for defence, foreign affairs, financial stability and internal security.

Gibraltar has its own House of Assembly, which consists of fifteen elected members and two nominated members. There is a Council of Ministers which consists of the Chief Minister and seven other Ministers, which is responsible for "defined" domestic matters such as trade, economic development, education, public works and services, and housing.

Other matters are dealt with by the Gibraltar Council, which consists of the Governor, the Chief Minister, four other Ministers, the Deputy Governor, the Attorney General, the Financial & Development Secretary and the Deputy Fortress Commander. Gibraltar is a constituent of the European Union, having joined with the United Kingdom in 1973, under the provisions of the Treaty of Rome relating to European dependent territories. However, it is excluded from the Common External Tariff, the Common Agricultural Policy and the requirement to levy Value Added Tax.

The reopening of the border with Spain in 1985 has enabled Gibraltar, a British possession since 1704, to expand its role as a major offshore finance centre, against a background of political stability and administrative and legal systems derived from the English models.

The absence of any exchange control restrictions together with exemptions and concessions from domestic taxes for certain categories of companies, non-resident individuals who do not work in Gibraltar itself, and trusts administered for non-residents has created many opportunities for offshore investors and led to substantial growth in financial sector services.