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The Madrid Protocol of 1885 is an agreement between Great Britain, Germany and Spain to recognise the sovereignty of Spain over the Sulu Archipelago as well as the limit of Spanish influence in the region. Under the agreement, Spain relinquishes all claim to Borneo.
The Spanish Government renounces, as far as regards the British Government, all claims of sovereignty over the
territories of the continent of Borneo, which belong, or which have belonged in the past to the Sultan of Sulu (Jolo), and which comprise the neighbouring islands of Balambangan, Banguey, and Malawali, as well as all those comprised within
Another important point regarding the agreement relates to Article IV which guarantees of no restriction on trade to the parties of the protocol within the Archipelago and North Borneo.