External Relations

Our relationship with the United Kingdom

The Isle of Man is an internally self-governing dependency of the British Crown and its people are British citizens. The Crown has ultimate responsibility for the "good government" of the Island and it acts on the advice of Ministers of the UK Government in their capacity as Privy Councillors.

The Isle of Man is not part of the United Kingdom but is a territory for whose international relations the United Kingdom is responsible in international law. The United Kingdom is responsible for the defence of the Isle of Man and for providing consular services. The Island makes an annual contribution to the United Kingdom in recognition of defence and other common services provided on its behalf.

The Lieutenant Governor is the Crown's representative on the Island. The Island's Government is consulted before any international treaty which would affect the Island is agreed by the United Kingdom.

Our relationship with the European Union

The Isle of Man is not part of the European Union but it has a special, limited, relationship with the EU set out in Protocol 3 to the United Kingdom's Treaty of Accession.

Under Protocol 3, the Isle of Man is part of the customs territory of the Union. It follows that there is free movement of industrial and agricultural goods in trade between the Island and the Union. The Isle of Man neither contributes to, nor receives from, the funds of the European Union, thus guaranteeing the Isle of Man's fiscal independence. Any proposal to change Protocol 3 would require the unanimous approval of all Member States of the Union, including, of course, the UK.

Apart from the requirements of the Protocol, in particular that the Isle of Man Authorities shall apply the same treatment to all natural and legal persons of the Union, the other Union rules do not apply. The Island's relationship with the Union allows it to trade with countries in the European Economic Area in a fashion generally similar to its trade with the Union itself.

The full text of Protocal 3 can be found at: www.gov.im/cso/externalrelations/eu.xml

OECD

When the Organisation for Economic Co-operation and Development Convention (OECD)was ratified by the United Kingdom in 1961, the territory to which the Convention applied was not specified. After consultation with the Island's Government, on 19th July 1990, the UK clarified its territorial application and confirmed that the OECD Convention also extended to "certain UK dependencies including the Isle of Man."

The National Treatment Instrument which is currently non binding lays down an obligation that foreign controlled and owned companies should be afforded a standard of treatment equivalent to that accorded to similarly placed domestic firms.

By acceding to the Convention, Isle of Man based financial institutions should benefit from improved rights of access to markets and establishment in OECD member states.

The World Trade Organisation Agreement

The World Trade Organisation Agreement (WTO) has taken over from the General Agreement on Tariffs and Trade (GATT) for the purpose of promoting free trade. The United Kingdom’s ratification of the Agreement Establishing the World Trade Organisation was extended to include the Isle of Man in 1997.