Thursday, January 20, 2005

Commission sets out phasing-out deal

Exempt Companies - European Commissioners yesterday took a decision that will allow a limited continuity for the exempt companies in Gibraltar (Dominique Searle reports).

The decision has not been formally announced but Commission sources have confirmed that the Commission is recommending to the United Kingdom that the exempt companies be phased out by 2010. If this is agreed to, it will be legally binding on the UK; if it is rejected the Commission has said it would then commence formal state aid proceedings.

The Chief Minister Peter Caruana was understood to be briefing the Finance Centre Council yesterday afternoon explaining to them the nature and modalities of the agreement.

The Commission is understood to be stipulating that the ceiling for the number of beneficiaries would stand as at those existing at the end of 2003 – some 8,500. Current beneficiaries will be allowed to continue into 2010 but new entrants will have to the end of 2007.

The agreement was decided yesterday but has not changed from that negotiated in December 2004.

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