29 March 2019, Brexit Day, is quickly approaching and we wanted to share how we have prepared.
Will there be changes to how your account is serviced?
No, we do not anticipate any noticeable difference in the way we service your account and your account management and operational support teams will not change due to Brexit. Depending on what agreement is reached between the UK and the EU, there may be minor updates to our Terms & Conditions to reflect that the UK is no longer a member of the EU.
How do the various Brexit scenarios impact WUIB’s plans?
Currently, we do business in the UK and much of Europe through Western Union International Bank (WUIB), an Austrian credit institution regulated by the Austrian Financial Market Authority (FMA). We have “passported” our license to the UK, and across the EU, where we operate as an “EEA Branch” of WUIB (WUIB UK).
In anticipation of Brexit we have applied to the FMA and the UK Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) for WUIB UK to be licensed as a “Third Country Branch”. This transition allows us to continue to do business in the UK once Brexit takes places and WUIB loses the ability to passport its licence.
There continues to be uncertainty whether a transition deal will be implemented by the UK and EU governments, however, we are prepared for any eventuality.
1. No Deal
In the event of no deal the PRA will deem WUIB UK a Third Country Branch for three years from Brexit Day under the Temporary Permissions Regime, during which time the PRA will review our application.
2. Transition Deal Approved
In the event a transition deal is approved by the UK and EU member governments we would continue to operate as an EEA Branch until 31 December 2020. The PRA would continue to have three years from Brexit Day to complete approval of our TCB application.
3. No Brexit
In the event the UK rescinds their request to exit the EU WUIB would maintain its passporting rights into the UK and continue operating as an EEA Branch. A Third Country Branch licence would not be required.
What are some other Brexit considerations?
Although we believe the probability is low, there is a chance that the UK will no longer be a member of SEPA as the result of Brexit, which could impact the fees for dealing with Euro through Euro accounts in the UK. WUIB is building contingency plans in the event this happens and we suggest that you speak with your bank(s) if you hold any UK based Euro accounts.
In addition, there is significant economic uncertainty and each Brexit scenario can have very different impacts to the value of the Pound. If you have any questions or concerns regarding these scenarios and their impact to your business, please do not hesitate to reach out to your Account Manager.
Please reach out if you require assistance.
David Prendeville Karen Penney
Head of FXS UK Head of Payments UK