Brexit: here is the Abi guide with "questions and answers" to prepare bank customers for the UK's exit from the EU
The exit of the United Kingdom from the European Union, scheduled for midnight on March 29, has been postponed by the European Council to the next 12 April, due to the continuing uncertainty caused by the British Parliament's failure to ratify the withdrawal agreement, necessary to regulate the transitional phase immediately following Brexit and to lay the foundations for future relations between the EU and the United Kingdom.
As a result, unless changes are made to date that cannot be prefigured, at midnight on April 12 the United Kingdom will leave the Union "without agreement" and become a "third country". All the primary and secondary legislation of the European Union, therefore, will cease to be applied to the United Kingdom and European standards will no longer be applied within the British borders. It is therefore important for bank customers to immediately know everything they need to continue to operate in peace and to make investments, withdrawals and payments or to transfer money to the United Kingdom.
Here, then, is the ABI guide on some of the main aspects that bank customers need to know to prepare for Brexit. Through a series of "Questions & Answers", the vademecum provides useful information in view of the United Kingdom's exit from the EU, which takes into account the provisions issued in this regard by the Supervisory Authorities - Bank of Italy and Consob - and the indications provided by the Italian government with the so-called DL Brexit.
The guide, available to the entire banking sector thanks to the circular letter sent by the ABI to its associates, is also available online on the Banking Association website (https://www.abi.it/Documents/QA%20ABI%20su 20Brexit.pdf%).
BREXIT: WHAT CHANGES FOR PAYMENTS, BANK TRANSFERS AND CHARGES?
- If I go to the UK, can I continue to make payments and withdrawals with my card issued by an Italian bank?
Yes, if you are the holder of an international circuit card, just like today, you can continue to use your payment card in the UK, even after withdrawal from the EU, to withdraw cash from ATMs and make payments at commercial establishments. Just like today you will use the PIN for withdrawals and payments (or the signature, if you are still required). Of course, by taking British pounds from UK ATMs you will have to bear the costs of currency exchange, as, indeed, is already happening in the UK or in the US with dollars.
- Can I continue to use an IBAN to transfer money to the UK?
Yes, this international standard code that serves to identify the current account, in fact, will not change following the withdrawal. If the recipient's account is also in euro, you can continue to make SEPA payments, such as wire transfers and direct debits in euros. To transfer money to a British account - in British pounds - you will have to bear the costs of currency exchange, just as it does now.
- If I plan a vacation in the UK, will I have to bring the pounds with me?
You could do it, but it is not necessary, because Italian bank card holders will be able to continue making payments with any merchant that accepts the card and withdraw British pounds from the UK's ATMs, even after withdrawal.
- Will I still be able to order and pay for items on UK websites from Italy?
Certainly. However, in the absence of a trade agreement between the EU and the United Kingdom, it may be necessary to pay import duties where it is not currently envisaged.
- After withdrawal, in the UK will there be additional fees for card payments or withdrawals?
Generally speaking, no. In fact, even after the withdrawal, all European legislation relating to payments will also remain valid in the United Kingdom and retailers, therefore, will not be able to charge additional costs on payments made by card. Should the conditions for withdrawals in the UK change in the future, your bank will inform you - as is the case with any other change in the terms of the contract - 60 days in advance.
BREXIT: WHAT CHANGES FOR SAVINGS AND INVESTMENTS?
- What will be the consequences of a withdrawal without agreement on the operation of British banks in Italy?
With regard to banking services, the DL Brexit distinguishes between banks that operate in Italy with a branch and those that "freely lend" their services, ie without having established a branch in our country.
During the transitional period, the former may continue to carry out the same activities in Italy as they did before the withdrawal, after notification to the Bank of Italy.
British banks without branches in our country, on the other hand, may continue to carry out the same activities, subject to notification to the Bank of Italy, but exclusively to manage the relationships established before the withdrawal date and without the possibility of concluding new contracts or renew (even tacitly) the existing ones.
In both cases, the British banks will be required to send their customers in Italy a detailed individual information, also indicating which deposit guarantee scheme they adhere to.
With regard to investment services, the DL Brexit establishes that in the event of withdrawal without agreement the banks and other British intermediaries will not be able to continue lending them to European citizens without having a branch in one of the EU countries. All individuals without this requirement must therefore communicate to customers, by the next 10 April, the initiatives taken to ensure the orderly cessation of their activities.
Banks and other British intermediaries that already operate in Italy through a branch, on the other hand, in the event of withdrawal without agreement, will still be able to continue to provide investment services in Italy during the transitional period, subject to notification to the competent authority and communication to customers.
- What will be the consequences of a withdrawal without agreement on the protection of my savings and investments deposited in a British bank?
For customers of UK banks operating in Italy or Italian banks operating in the UK, withdrawal without agreement could result in deposits being guaranteed by another guarantee system (DGS). In any case, the Brexit Law Decree has provided that, in the transitional period, these banks offer equivalent levels of protection to that enjoyed by depositors of banks in EU countries, regulating in detail all the obligations to which they are bound, including communications to the customers.
With regard to financial instruments held at a British bank operating in Italy, with or without a branch, it is advisable to check whether the UK investor compensation system will continue to protect non-UK investors for the period after the withdrawal date without agreement. In any case, the Brexit Law Decree has established that in the transitional period British banks and investment companies operating in Italy, with or without a branch, will adhere, under certain conditions, to the Italian investor compensation system.
- Will I still be able to invest in British financial instruments issued / listed?
The possibility of investing in UK financial instruments will depend on the possibility of accessing trading venues where these financial instruments are traded, which can be either UK or EU. In the case of withdrawal without agreement, the British trading venues
they will formally become trading venues of a Third Country and will have to start the relevant recognition procedure. However, DL Brexit has provided that, during the transitional period, the operators of United Kingdom trading venues may continue to carry out their business in Italy in compliance with certain conditions and allowing their members, and therefore their clients, to to carry out sales or purchase transactions of the negotiated financial instruments.