With effect from midnight on 31 December 2020 the Brexit transition period between the United Kingdom and the European Union ended and future trade in goods or services with the UK (including Northern Ireland) will be provided in accordance with the EU-UK Trade and Cooperation Agreement.
While most financial services providers are well prepared for the end of the transition period, it means that UK authorised firms will no longer be able to provide financial services to Irish customers on a cross-border basis (passporting). Any customer who currently uses the services of a UK-based financial services provider, and has not yet been contacted by them, is advised to contact their provider to confirm whether they have obtained all necessary authorisations to allow them to continue to provide services to their Irish customers.
In the case of insurance, the Government has enacted the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2020. Among other things, this Act introduces a temporary run-off regime of 15 years for those insurance firms that meet the conditions set out in that legislation. This will mean that for any customers who hold a policy with a UK service their policy can remain valid for this period.
From 1 January 2021, due to European regulatory requirements, Irish creditors with direct debits in place for UK customers may need to provide their bank with additional information to avoid payment requests being rejected. The Central Bank has engaged extensively with payment service providers, UK supervisory authorities and industry representative bodies to emphasise the mandatory requirements for additional information and to monitor progress towards compliance.
Deputy Governor Ed Sibley said: “In the Central Bank we have actively engaged with firms on the need to prepare for the potential impact of Brexit since the Referendum. We have worked closely with the financial services industry, the Department of Finance as well as British and European authorities to ensure transition concludes as smoothly as possible.
“While we have worked to minimise the impact of Brexit on the financial services industry it is possible that there may be some residual disruption to financial services in the coming days or weeks. We will continue to monitor for any potential issues arising and will work to ensure that these issues are managed on a timely basis.”
Further information is available on the Central Bank website.