The Czech National Bank hereby notifies foreign financial institutions other than credit institutions and insurance companies carrying on their business in the Czech Republic on the basis of authorisation granted in the United Kingdom of Great Britain and Northern Ireland (“the institutions concerned”) that in the event of the withdrawal of the United Kingdom from the European Union under Article 50(2) of the Treaty on the European Union without an agreement on the conditions of withdrawal, the authorisation of these institutions to carry on their business in the Czech Republic (under the single European passport) will end. Act No. 74/2019 Coll., on Amending Certain Matters in Connection with the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union (“Lex Brexit”), has been adopted in the Czech Republic for such an eventuality. Lex Brexit allows the institutions concerned to continue operating in the Czech Republic subject to the conditions laid down therein for a transition period running from the date of withdrawal until 31 December 2020.
The institutions concerned will only be authorised to carry on activities in the Czech Republic that are necessary to settle claims and debts arising from contracts (Article 24(1) of Lex Brexit). The institutions concerned will not be authorised to create new obligations or amend existing ones.
The Czech National Bank expects the institutions concerned to inform individual clients and beneficiaries affected by the withdrawal of the United Kingdom from the European Union of the legal consequences of the withdrawal in respect of their rights and obligations arising from existing contracts and also of the actions that will be taken by the institutions concerned to settle claims and debts arising from those contracts. The Czech National Bank also expects the institutions concerned to be able to give evidence of the abovementioned to the Czech National Bank on request.
Finally, the Czech National Bank hereby notes that if an agreement on the conditions of the withdrawal of the United Kingdom from the European Union fails to be concluded and Lex Brexit – including the part thereof concerning the provision of financial services (Article 24) – expires, further operations of the institutions concerned in the Czech Republic will be deemed a breach of the relevant sectoral legislation unless the institutions concerned take steps to comply with the requirements for carrying on their business under this Act. In such case, the institutions concerned will be deleted from the national register of relevant financial institutions as of the date of withdrawal.
Further partial specific rules are contained in Articles 14 and 15 of Lex Brexit relating to private pension schemes and supplementary pension savings and in Article 16 for making payment transactions using payment services in the United Kingdom.