THE TRANSATLANTIC MAGAZINE
According to a story published by The Sunday Times, EU-based customers could have their UK bank accounts closed "because the government has failed to negotiate post-Brexit rules". The story echoes the experience of many overseas Americans, who have dealt with bank account closures and an inability to access basic financial services due to international regulations.
Writing in the September 20 edition of The Sunday Times, the paper's Assistant Money Editor, David Byers, wrote that "A number of the biggest British banks, including Lloyds, Barclays and the Queen's bank, Coutts, have started writing to expatriates to say they will stop serving them when the withdrawl agreement ends at 11pm on December 31". Bryers goes on to explain that the problem stems from a concept known as passporting. Without a deal between the UK and EU, banks will need to apply for EU licenses to continue certain financial functions. Bryers cites one source at a leading British bank who reportedly said "In some cases, continuing to serve customers would be incredibly complex, extremely expensive and very time-consuming, and simply would not make economic sense."
The scenario echoes problems that many overseas Americans will be familiar with. FATCA, the Foreign Account Tax Compliance Act, requires overseas financial institutions to report back to the IRS in America on the international accounts of US Citizens. This has led to some institutions refusing to accept US Citizens as clients, due to the cost of becoming FATCA compliant, the penalties associated with non-compliance, and the complexity of adhering to FATCA regulations.
Although the article suggests Lloyds and Barclays accounts may be closed, Byers also suggests that "NatWest and Santander said they had no plans to close accounts but were considering their options".
While the article doesn't specifically mention the potential impact on overseas Americans, US Citizens living in the EU with UK bank accounts could also be affected.
FATCA has received more coverage in recent years, as advocacy and campaigning efforts to highlight its impact on overseas Americans continue to grow. For many, access to a bank account is a basic human right. As such, if UK expats and others in Europe are affected by bank closures on the basis of international regulation, awareness could grow further of the financial difficulties which are affecting globally mobile citizens across the world.
The full Sunday Times article is available to subscribers to The Times at www.thetimes.co.uk/article/brexit-strips-expats-of-uk-bank-accounts-565bsvn6k