UK and Spain clash on Rock smuggling

MICHAEL SHERIDAN and ELIZABETH NASH

Madrid

Douglas Hurd, the Foreign Secretary, criticised Spain yesterday for its tight border controls at Gibraltar, but publicly acknowledged there were concerns over money laundering and drug smuggling around the Rock.

Mr Hurd and the Spanish Foreign Minister, Javier Solana, discussed the issue at Madrid talks that appeared to avert Spanish threats of punitive measures against Gibraltar, but did not produce agreement. The two admitted profound disagreement over Gibraltar's future, but pledged to try to resolve differences through co-operation.

Britain is concerned that the Gibraltar problem, rooted in a dispute over sovereignty, could overshadow more important concerns during the new Spanish presidency of the European Union. Britain is also aware that evidence of drug smuggling is undermining its case.

Mr Solana, for his part, said Spain was not satisfied with promises of better controls on smuggling. He did not think enough had been done to bring Gibraltar law into line with EU legislation, saying: "There are too many words and not enough deeds." He claimed the border controls, which cause considerable delays to travellers entering Spain from the Rock, were necessary under the EU's Schengen agreement on open frontiers.

Mr Hurd is understood to have rejected that argument during the talks. "I expressed our concern, our dismay indeed, about the delays at the frontier," he said. He admitted continuing concern over money laundering, financial services, the implementation of EU directives and what he referred to as "drugs and fast boats".

Mr Hurd conceded that progress had not been as quick as Britain would desire. The Foreign Office is tied up in negotiations with Gibraltar's abrasive Chief Minister, Joe Bossano, who accused it of undue pressure and "dirty tricks" against him.

Mr Hurd said: "I agree with Javier Solana that what counts is not words but action, but the British government is not in a position to give instructions to the chief minister of Gibraltar under the 1969 constitution."

Mr Hurd said there had been an increase in police activity to record levels in the first half of this month with 42 crews and 63 vessels seized. Britain and Spain agreed their legal experts would meet again soon.

Nerves have been frayed for months in London and Madrid over two painful rows: the running sore of Gibraltar, which has become more acute in recent months, and the Greenland halibut war in March, which Mr Solana said recently had "deeply wounded" his country.

Spain is preparing to tighten further its vigilance at the border and has a package of measures ready which Mr Solana indicated could be implemented shortly.

They have yet to be announced, but could include the closer monitoring of investment in Spain from Gibraltarian funds, or restrictions on the use of Spanish airspace for aircraft using the Rock's airstrip.

Madrid also plans to report to the European Commission on the "fiscal fraud" of the EU implicit in the smuggling of tobacco from Gibraltar to Spain, no value-added tax being paid on such goods.