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Some UK banks start to withdraw accounts from UK citizens in the EU

Financial discussion for any financial queries for Expats
mike
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Some UK banks start to withdraw accounts from UK citizens in the EU

#341554

Postby mike » September 20th, 2020, 7:18 pm

A heads up if anybody affected isn't aware

An article in the Times today is stating that Lloyds & Barclays (and Coutts !) have started writing to British customers in the EU to tell them that their accounts will be closed on 31 December. Barclays have gone further, and have stated that Barclaycards will no longer be valid after November.

Tens of thousands of Britons who live in Europe are to be stripped of their UK bank accounts and credit cards within weeks, because the government has failed to negotiate post-Brexit rules.

Times article (paywalled) https://www.thetimes.co.uk/article/brexit-strips-expats-of-uk-bank-accounts-565bsvn6k
Photo of article https://twitter.com/acgrayling/status/1307612328750391297/photo/1

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341563

Postby GrahamPlatt » September 20th, 2020, 8:24 pm

Here as well, BBC4 Moneybox...

https://www.bbc.co.uk/sounds/play/m000mrcm

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341692

Postby stevensfo » September 21st, 2020, 12:33 pm

I'm pretty sure that most Brits in the EU will have learned long ago, as I did, that you never, ever tell any bank that you're not in the UK. Obey the law, don't add to an ISA etc, but don't expect anyone in a bank to sympathise with your predicament.

Steve

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341724

Postby dspp » September 21st, 2020, 2:20 pm


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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341748

Postby carioca » September 21st, 2020, 4:28 pm

I came across this story on the Yahoo UK Financial page, but found the article less than enlightening.

It starts off with talking ab out "British expats," but later it mentions that banks were notifying their "EU based customers." Clearly, that's not the same thing. You can be EU based and have an account with a UK bank without being an expat. In my case, I've never been a "pat" so I can't be classified an expat. But I lived and worked for a considerable time in the UK, and paid taxes and pension contribution. Now, I have reached the stage where I receive my pension, and for this purpose it's convenient to keep a sterling bank account. In my case, it is with the Jersey branch of a major UK bank. Also, I am not "EU based." Does that make a difference? So far I have not heard anything from my bank, but that does not mean anything. Some letters take several months to reach me.

Does anybody know where I can find the text of the legislation, which, I hope, uses more specific terms?

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341761

Postby mike » September 21st, 2020, 4:59 pm

carioca wrote:Does anybody know where I can find the text of the legislation, which, I hope, uses more specific terms?


This isn't legislation, it is those banks themselves deciding it is not worth the hassle to provide account facilities to British citizens living in the EU. From the Guardian article linked above, it seems HSBC may not be following the lead of Barclays & Lloyds, others are still to be confirmed.

Other banks have yet to decide on future arrangements. Santander and NatWest said they were keeping the situation under review and currently had no plans to withdraw retail or corporate accounts.

HSBC, which has a large number of customers in France, Germany and Switzerland, said that as an international bank it could continue to serve UK customers across the EU, but would keep them informed of any changes that might affect services.


I don't know how accurate is the reporting, but note the report says HSBC "could continue", not "will continue", to serve UK customers

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341772

Postby JohnB » September 21st, 2020, 5:36 pm

Uk bank need eu subsidiaries to legally offer banking services, country by country. They may judge it too much hassle, but its a legal consequence of brexit.

The uk has not insisted on the reverse for eu banks.

This loss of 'passporting' is of little consequence for private accounts, but will cost banks dear commercially.

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341776

Postby Spet0789 » September 21st, 2020, 5:48 pm

mike wrote:
This isn't legislation, it is those banks themselves deciding it is not worth the hassle to provide account facilities to British citizens living in the EU. From the Guardian article linked above, it seems HSBC may not be following the lead of Barclays & Lloyds, others are still to be confirmed.



JohnB wrote:Uk bank need eu subsidiaries to legally offer banking services, country by country. They may judge it too much hassle, but its a legal consequence of brexit.

The uk has not insisted on the reverse for eu banks.

This loss of 'passporting' is of little consequence for private accounts, but will cost banks dear commercially.


It is legislation but it's not quite as bad as JohnB suggests.

To do retail banking business in the EU, you need to have either one EEA subsidiary (which can then do business anywhere in the EEA via the single market passport) or you need to have a locally regulated branch in each EEA country where you do business.

So the starting point is that from Jan 1st it is illegal for a British bank to provide retail banking services to any EEA person. Whether they choose (or have already decided) to spend the millions to set up either an EU sub or a local branch may differ from bank to bank, but at the heart this is a simple legal consequence of leaving the single market.

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341785

Postby JohnB » September 21st, 2020, 6:35 pm

I think the licence to trade to needs to be applied for in each country, as we are outside them all, but I am no expert.

banks that do not have an EU arm would have to apply for a licence to trade in each EEA country. Some banks have too small a customer base in the EU to justify the cost
https://www.theguardian.com/money/2020/ ... ays-brexit

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341786

Postby stevensfo » September 21st, 2020, 6:42 pm

Spet0789 wrote:
mike wrote:.

So the starting point is that from Jan 1st it is illegal for a British bank to provide retail banking services to any EEA person. Whether they choose (or have already decided) to spend the millions to set up either an EU sub or a local branch may differ from bank to bank, but at the heart this is a simple legal consequence of leaving the single market.


But is a Brit working in France actually an EEA person? My old boss, many years ago was from London and worked in Germany before the UK joined the EEC, then in France. He never had any problems. It just seems to me that the banks are making the rules up as they go along. In Grenoble c.1985, there was a Barclays bank but they refused to recognise my account in the UK. All quite surreal. They were Barclays, yet not Barclays. Since then, I've learned to treat banks with the disdain that they show to their clients and, as they do, stick to my rules. The banks don't give one iota about their clients and will not show one ounce of sympathy.
Brexit is a classic 'Turkeys voting for Christmas' but I have to say that the way it has been manipulated and organised is absolutely fascinating and will fill History books for hundreds of years.

Steve

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341791

Postby Spet0789 » September 21st, 2020, 7:15 pm

JohnB wrote:I think the licence to trade to needs to be applied for in each country, as we are outside them all, but I am no expert.

banks that do not have an EU arm would have to apply for a licence to trade in each EEA country. Some banks have too small a customer base in the EU to justify the cost
https://www.theguardian.com/money/2020/ ... ays-brexit


This article and I are saying the same thing. If a bank does have an EEA subsidiary then it doesn’t need county by county permissions. Otherwise it does.

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341792

Postby Spet0789 » September 21st, 2020, 7:18 pm

stevensfo wrote:
Spet0789 wrote:
mike wrote:.

So the starting point is that from Jan 1st it is illegal for a British bank to provide retail banking services to any EEA person. Whether they choose (or have already decided) to spend the millions to set up either an EU sub or a local branch may differ from bank to bank, but at the heart this is a simple legal consequence of leaving the single market.


But is a Brit working in France actually an EEA person? My old boss, many years ago was from London and worked in Germany before the UK joined the EEC, then in France. He never had any problems. It just seems to me that the banks are making the rules up as they go along. In Grenoble c.1985, there was a Barclays bank but they refused to recognise my account in the UK. All quite surreal. They were Barclays, yet not Barclays. Since then, I've learned to treat banks with the disdain that they show to their clients and, as they do, stick to my rules. The banks don't give one iota about their clients and will not show one ounce of sympathy.
Brexit is a classic 'Turkeys voting for Christmas' but I have to say that the way it has been manipulated and organised is absolutely fascinating and will fill History books for hundreds of years.

Steve


I have no idea what the rules were like 50 years ago, but it’s pretty standard that if you provide banking services to a retail customer resident in a given country, the regulator in that country will have a view on how you do it.

If you don’t have a residence in the U.K. I think it’s hard to argue you’re resident here. The clue is in the name!

Bank regulation has certainly evolved a lot, generally to give consumers greater protection. Scandals like BCCI played their part. With internet banking I am sure regulators care more about this as it is now far easier for your bank to be anywhere.

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341793

Postby JamesMuenchen » September 21st, 2020, 7:25 pm

It's not just banks.

InteractiveBrokers have written to me to say that they are moving my UK account to their subsidiary in Luxembourg.

If you are using another UK broker from the EU, it might be an idea to check their plans and make preparations to ensure you don't hit a problem.

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341811

Postby carioca » September 21st, 2020, 8:20 pm

mike wrote:
carioca wrote:Does anybody know where I can find the text of the legislation, which, I hope, uses more specific terms?


This isn't legislation, it is those banks themselves deciding it is not worth the hassle to provide account facilities to British citizens living in the EU. From the Guardian article linked above, it seems HSBC may not be following the lead of Barclays & Lloyds, others are still to be confirmed.


Thanks for your reply, mike.
I wasn't happy with the vague language used in the articles I read (UK expats, EU-based customers) and hoped to find an precise definition as to who is affected by this change. You use "British citizens" in your answer. Afaik citizenship should not be relevant for this question. I guess and hope that what matters is the current place of residence. As I now live outside the EU area, I should be safe. But I wanted to be sure.

In another reply you talk about a EEA person, who could not hold an UK account. What determines who is a EEA person? Place of birth? Nationality in passport? Current place of residence?

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341838

Postby mc2fool » September 22nd, 2020, 12:25 am

Spet0789 wrote:To do retail banking business in the EU, you need to have either one EEA subsidiary (which can then do business anywhere in the EEA via the single market passport) or you need to have a locally regulated branch in each EEA country where you do business.

So the starting point is that from Jan 1st it is illegal for a British bank to provide retail banking services to any EEA person.

Really? There's something that doesn't sound quite right about this.

E.g. I've had a US bank account for some decades (I lived there for a few years many yonks ago and kept it after I left). Are you saying that in allowing me, as a UK resident, to continue having that account all the time we were still in the EU the US bank (which has no subsidiary or branches outside of New England, let alone outside the US) has committed an EU criminal offence?

And if someone living in, say, France, applies for a bank account in, say, the UK, or Channel Islands, or USA, or Japan, or South Africa, or ... etc ... where is the illegality, jurisdiction wise, if the bank provides one? For it to be illegal for a British, etc, bank to do so there has to be something in British, etc law against it, 'cos the EU can't exactly send in EU cops to arrest them....

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341853

Postby Spet0789 » September 22nd, 2020, 7:56 am

mc2fool wrote:
Spet0789 wrote:To do retail banking business in the EU, you need to have either one EEA subsidiary (which can then do business anywhere in the EEA via the single market passport) or you need to have a locally regulated branch in each EEA country where you do business.

So the starting point is that from Jan 1st it is illegal for a British bank to provide retail banking services to any EEA person.

Really? There's something that doesn't sound quite right about this.

E.g. I've had a US bank account for some decades (I lived there for a few years many yonks ago and kept it after I left). Are you saying that in allowing me, as a UK resident, to continue having that account all the time we were still in the EU the US bank (which has no subsidiary or branches outside of New England, let alone outside the US) has committed an EU criminal offence?

And if someone living in, say, France, applies for a bank account in, say, the UK, or Channel Islands, or USA, or Japan, or South Africa, or ... etc ... where is the illegality, jurisdiction wise, if the bank provides one? For it to be illegal for a British, etc, bank to do so there has to be something in British, etc law against it, 'cos the EU can't exactly send in EU cops to arrest them....


There is no such thing as an EU criminal offence, but EU member states enact EU law in their domestic law. As far as I know, all EEA member states require any institution offering retail banking services to be appropriately regulated either by them or in another member state (under the passporting regime).

As I said, it is the bank that commits the offence not the customer. The offence takes place in the country where it offers banking services. Any EU citizen can set up bank accounts wherever they like (although there may be disclosure obligations due to tax). The offence, if there is one, is on the bank.

Your example of US banking is irrelevant as you are receiving banking services in the US from a locally regulated bank. By analogy, if a British person with a French address wanted to set up a bank account in France with a French bank, that would be fine.

Look at it this way... no country wants Fred Bloggs Bank to just set up as a bank, collect retail deposits and blow them on the 3.45 at Chepstow (or more likely on bad investments). So they have laws that make it illegal to offer such services unless you are appropriately regulated.

On your point about enforcement, the ability of regulators to impose extraterritorial sanctions is well established. For example, the US has fined numerous large and small Swiss banks for offering banking services which facilitated tax evasion. In many cases they had no local presence. So it would be very easy for an EU member state to impose a fine on a British bank which was providing retail banking services to residents of that state without the appropriate regulatory permissions.

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341889

Postby mc2fool » September 22nd, 2020, 10:23 am

Spet0789 wrote:There is no such thing as an EU criminal offence, but EU member states enact EU law in their domestic law.

But that's exactly my point, we're talking about a non EU member (yes, I understand how directives and regulations work).

Spet0789 wrote:Your example of US banking is irrelevant as you are receiving banking services in the US from a locally regulated bank. By analogy, if a British person with a French address wanted to set up a bank account in France with a French bank, that would be fine.

Uh? How is that an analogy? That's all in the same country, but what we're talking about is banking outside of your country of residence. Nationality is irrelevant, only residence, I am a person with a British address with a bank account in the USA with a US bank, and the analogy would be a person with a French address with a bank account in the UK with a UK bank. That is what we're talking about, isn't it?

In any case, I am a bit surprised that there are (apparently) still so may UK expats with UK accounts (with non-UK addresses at least). Non-UK residents opening/keeping UK accounts has been increasingly difficult since 9/11 and the KYC (know your customer) and money laundering laws that ensued, and with the UK banks pushing their non-UK resident customers offshore to their Channel Islands/Isle of Man branches.

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341923

Postby Spet0789 » September 22nd, 2020, 11:39 am

mc2fool wrote:
Spet0789 wrote:There is no such thing as an EU criminal offence, but EU member states enact EU law in their domestic law.

But that's exactly my point, we're talking about a non EU member (yes, I understand how directives and regulations work).

Spet0789 wrote:Your example of US banking is irrelevant as you are receiving banking services in the US from a locally regulated bank. By analogy, if a British person with a French address wanted to set up a bank account in France with a French bank, that would be fine.

Uh? How is that an analogy? That's all in the same country, but what we're talking about is banking outside of your country of residence. Nationality is irrelevant, only residence, I am a person with a British address with a bank account in the USA with a US bank, and the analogy would be a person with a French address with a bank account in the UK with a UK bank. That is what we're talking about, isn't it?

In any case, I am a bit surprised that there are (apparently) still so may UK expats with UK accounts (with non-UK addresses at least). Non-UK residents opening/keeping UK accounts has been increasingly difficult since 9/11 and the KYC (know your customer) and money laundering laws that ensued, and with the UK banks pushing their non-UK resident customers offshore to their Channel Islands/Isle of Man branches.


Not quite. What we are talking about is banking outside your country of residence with a bank which has no authorisations to provide banking services in the place where you use those banking services.

Offshore banking is fine (though under greater scrutiny now than in the past).

As an aside, it may well be that the EU applies higher regulatory standards to the provision of banking services to customers based inside the EU than other jurisdictions, as they do with food and other imports. There was the hope that U.K. banks would achieve equivalence by Jan 1st (ie the EU confirms that our regulatory standards achieve the same outcomes from a consumer protection perspective as theirs) but this hope is fading.

Bloomberg News also supports my view btw.

www.bloomberg.com/amp/news/articles/202 ... exit-nears

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341931

Postby mc2fool » September 22nd, 2020, 12:11 pm

Spet0789 wrote:
mc2fool wrote:
Spet0789 wrote:There is no such thing as an EU criminal offence, but EU member states enact EU law in their domestic law.

But that's exactly my point, we're talking about a non EU member (yes, I understand how directives and regulations work).

Spet0789 wrote:Your example of US banking is irrelevant as you are receiving banking services in the US from a locally regulated bank. By analogy, if a British person with a French address wanted to set up a bank account in France with a French bank, that would be fine.

Uh? How is that an analogy? That's all in the same country, but what we're talking about is banking outside of your country of residence. Nationality is irrelevant, only residence, I am a person with a British address with a bank account in the USA with a US bank, and the analogy would be a person with a French address with a bank account in the UK with a UK bank. That is what we're talking about, isn't it?

In any case, I am a bit surprised that there are (apparently) still so may UK expats with UK accounts (with non-UK addresses at least). Non-UK residents opening/keeping UK accounts has been increasingly difficult since 9/11 and the KYC (know your customer) and money laundering laws that ensued, and with the UK banks pushing their non-UK resident customers offshore to their Channel Islands/Isle of Man branches.

Not quite. What we are talking about is banking outside your country of residence with a bank which has no authorisations to provide banking services in the place where you use those banking services.

Just like my US bank then.

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Re: Some UK banks start to withdraw accounts from UK citizens in the EU

#341983

Postby tjh290633 » September 22nd, 2020, 3:54 pm

It's a long time ago now, but both in Peru and in the UK, they seemed to have a rule that foreign based non-nationals could not open current accounts, but could open savings accounts. This is going back to 1971 but I had a savings account with a bank in Lima, which could hold money provided by our client, to pay our expenses.

More recently, in 1989, a Russian friend opened a savings account with Lloyds, so that her mother could draw cash from ATMs in Russia. Again, a current account was not possible, but a savings account (with a cash card) was.

TJH


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