carrying on their business in the Czech Republic on the basis of authorisation granted in the United Kingdom of Great Britain and Northern Ireland in view of the end of the transition period
The Czech National Bank hereby notifies foreign credit institutions carrying on their business in the Czech Republic on the basis of authorisation granted in the United Kingdom of Great Britain and Northern Ireland (“UK”) including Gibraltar (“foreign credit institutions”) that after the end of the transition period under Article 126 of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (“transition period”), i.e. on 1 January 2021, the authorisation of foreign credit institutions to carry on their business in the Czech Republic (under the single European passport) will end.
Unless an agreement on mutual relations between the UK and the European Union includes provisions enabling the continuation of the single European passport for credit institutions, after the end of the transition period foreign credit institutions will only be authorised to carry on activities in the Czech Republic that are necessary to settle claims and debts arising from contracts concluded before the end of the transition period and to terminate their activities in the Czech Republic, or to obtain authorisation to continue their business under current Czech legislation. Foreign credit institutions will not be authorised to create new obligations or change the scope of existing ones in any way.
The Czech National Bank expects foreign credit institutions to inform individual clients and beneficiaries of the legal consequences of the end of the transition period in respect of their rights and obligations arising from contracts and also of the actions that will be taken by foreign credit institutions to settle claims and debts arising from those contracts. The Czech National Bank also expects foreign credit institutions to be able to give evidence of the abovementioned to the Czech National Bank on request.
The Czech National Bank hereby notes that unless the provision of services by foreign credit institutions is governed by an agreement on mutual relations between the UK and the European Union, further operations of foreign credit institutions in the Czech Republic from 1 January 2021 onwards beyond the activities mentioned above will be deemed a breach of Act No. 21/1992 Coll., on Banks, as amended, unless foreign credit institutions comply with the requirements for carrying on their business under this Act. In such case, foreign credit institutions will be deleted from the national register of credit institutions as of the end of the transition period and will be treated as institutions from third countries.
The Czech National Bank will supervise compliance with duties by foreign credit institutions in the Czech Republic (i.e. the prohibition to conclude new contracts and change the scope of existing obligations).