UK citizen’s living in Spain could see their bank accounts closed under rules that would be imposed under a no-deal Brexit.
With the end of the Brexit extension looming, some of the UK’s biggest banks including Lloyds and Barclays have started to notify expat customers that their accounts will be closed at 11 pm on December 31.
The recent stalemate in Brexit negotiations has led to a bureaucratic nightmare for UK banks and their ability to continue to provide banking services to those living in the EU post-Brexit.
Instead of waiting for the EU and the UK to reach an agreement, banks have decided to pre-empt the end of the transition period and pull their services.
However, the UK Treasury has urged banks to “treat customers fairly”, saying that the closing of accounts would be a “commercial decision” and that it would be up to the banks on which countries they would continue to operate in.
They said, “We expect banks to treat their customers fairly and provide timely communications to enable them to make appropriate decisions.
“However, the provision of banking services is a commercial decision for firms based on a variety of factors, including the local law and regulation of specific EEA countries.”
Barclays, one of the country’s biggest banks has already started to notify customers that it would be pulling services for those living in Holland, Germany, Ireland, Italy, Portugal and Slovakia. It is believed that the move would impact around 13,000 British nationals.
Barclays also confirmed that banking and credit card customers living in Spain, Belgium and France would also lose their services with cards cancelled on November 16.
Upmarket banking provider, Coutts also confirmed their intention to end their services to EU based customers saying that Brits would have to make “alternative arrangements”.
“In the event that no alternative to the European Economic Area passporting regime for financial services is agreed between the UK and EU, we have taken the difficult decision to withdraw from offering our services to clients who reside in the EEA,” Coutts said.
Santander and Natwest have said they do not currently have any plans to close expat accounts but will be considering their options.
It is believed that with no blanket rules for the 27 EU Member States and with each having their own, it would become extremely difficult for banks to continue to serve their customers. It would also be illegal under current legislation.
A source told The Sunday Times, "In some cases, continuing to serve customers would be incredibly complex, extremely expensive and very time-consuming, and simply would not make economic sense".
Boris Johnson and his team have just 101 days in which to reach an agreement with their EU counterparts before the transition period ends and the UK leaves on WTO terms.
January 14, 2021