As a result of a referendum held on 23 June 2016, the United Kingdom left the European Union on 31 January 2020. A transition period followed until 31 December 2020, and after this, the United Kingdom’s withdrawal from the EU, the Single Market and the Customs Union created barriers to trade and cross-border exchanges that did not previously exist.
To arrive at new rules for living, working and trading together, the UK-EU trade agreement was concluded between the EU and the UK. This has provisionally been in effect from 1 January 2021. Whereas the UK-EU agreement stipulates that there will be no taxes on goods (tariffs) or limits on the amount that can be traded (quotas) between the UK and the EU, financial services were outside the scope of this agreement.
The withdrawal of the United Kingdom from the European Union and the remaining lack of clarity on financial services generate uncertainty and questions for retail and corporate customers.
The Association of Cyprus Banks has published frequently asked questions to address the questions of clients of Cypriot banks regarding Brexit. At the same time, useful links to websites and announcements of official bodies, authorities and organizations are also available. We note that the answers depend on what is applicable today and are liable to change given future legal amendments in the U.K. and/or Cyprus.
Please find below the useful links:
Please find below the useful links:
BREXIT: Association of Cyprus Banks’ FAQs for bank clients
The Association of Cyprus Banks publishes frequently asked questions (FAQs) to address the questions of clients of Cypriot banks regarding BREXIT.
Α. HOW ARE OWNERS OF DEBIT & CREDIT CARDS, ISSUED BY CYPRIOT BANKS, AFFECTED?
1) Will I be able to withdraw cash from an ATM in the UK using my card issued by a Cypriot bank?
Yes. Owners of cards issued in Cyprus may withdraw cash from ATMs in the UK. As the ATMs will issue pounds sterling, there will be foreign exchange charges (same as today upon currency conversion).
2) Will I be able to order and pay for items on a U.K. website from Cyprus?
Yes. Although there are no tariffs for goods traded between the UK and EU, there are likely to be excise and custom duties. There may be delays from additional custom formalities and controls. For more information see the European Commission’s Factsheet for online shopping from UK websites.
3) Do I need to activate my card for “out of Europe use” when I travel to the United Kingdom to be able to use it?
No, this is not necessary. The United Kingdom remains in Europe even though it is leaving the European Union. During your visits to the U.K. you will still be able to withdraw cash from ATM, use your cards for payments in shops and make contactless payments, same as today.
4) Will a retailer in the United Kingdom charge me with additional fees / charges when I use debit / credit cards issued by Cypriot banks?
Nothing changes compared to what is applicable today. In the United Kingdom the law based on the relevant EU Directive regarding payments continues to apply. Based on this, retailers are not allowed to charge any additional costs for payments with debit cards.
Β. HOW WILL UK CITIZENS LIVING IN CYPRUS BE AFFECTED?
1) I am a U.K. citizen resident of Cyprus. How are my deposits and loans affected?
Deposits: Your deposits in Cypriot banks will remain protected under the Deposit Guarantee and Resolution of Credit and Other Institutions Scheme (DGS) same as today. For more information: https://www.centralbank.cy/en/deposit-guarantee-investors-compensation-schemes/deposit-guarantee-and-resolution-of-credit-and-other-institutions-scheme
Loans: Your existing loans with Cypriot banks are not affected.
2) I am a U.K. citizen resident of Cyprus. What happens with my investment account in a Cypriot bank /Cyprus investment firm?
Your investment account in a Cypriot bank / licensed investment firm remains protected under the relevant Investor Compensation Fund, same as today.
1) Do I need to use an IBAN to transfer money to the UK?
Yes, the IBAN is a worldwide ISO standard for account numbers that does not change as a result of Brexit. Transfer of funds from the United Kingdom to the EU (and vice versa) in the form of credit transfers and direct debits in euro will continue to be processed under the SEPA (Single Euro Payments Area) after the end of the transition period. For SEPA payments (ie bank transfers in euros and direct debits in euros) both the payer and the recipient must have an IBAN payment account in euros. If you want to transfer euros to an account in British pounds, there will be currency exchange costs the same as previously (currency conversion). Consumers transferring funds between the EU and UK may be asked by their payment service providers to provide additional details.
1) What happens with my investments in UK shares / UCITS?
For non-U.K. (e.g. Cypriot) investors, Brexit means that the regulatory framework and financial passport that has enabled EU-based customers to access a diverse suite of crossborder financial products and services from UK-based banks has ceased to apply. This will result in the removal of protection for European investors in the United Kingdom under the EU financial services framework. This protection includes the general requirement of non-discrimination, guarantees regarding market access and prohibition of restrictions on the movement of capital and payments. Until the conclusion of a bilateral investment protection agreement between Cyprus and the UK, there are no guarantees regarding market access or prohibition of restrictions on the movement of capital and payments for investments in the UK.