Withdrawal Agreement Passporting

The political declaration provides for the granting of adequacy status to the United Kingdom before the end of the transition period, until December 2020, and confirms that the European Commission will begin to assess the adequacy as soon as possible after the UK`s withdrawal. If no regulations are adopted by 1 January 2021, passport fees for financial services companies from the UK will expire. Notwithstanding the possible form of UK withdrawal from the EU, UK and EEA financial firms will need to take certain measures by 31 January 2020. For some EEA companies, this includes registering the Financial Conduct Authority`s (FCA) temporary leave scheme to ensure that they can continue to benefit from the passport regime in a non-Brexit scenario. If we receive a notification of a British company`s external passport, we will assess the adequacy of the resources and administrative structure of the company. We will check whether the company meets the requirements of the corresponding directive. We can also assess whether important individuals are fit and able to carry out the proposed operation. Intermediation structures (where a third-country company deals with an EU counterparty through a separate EU company) can offer UK companies a solution to access EU credit markets, provided that neither eu-EU member states nor the UK use Brexit as a pretext to change their current rules on the provision of credit and other banking services by third countries. The LMA has published a form of “designated entity clause” for inclusion in the facilities documentation, which allows lenders to honour their credit obligations in other jurisdictions through related companies (to protect against the risk of passport loss). To launch such an assessment as soon as possible after the UK`s withdrawal from the EU in order to complete these assessments by the end of June 2020. It should be noted that the transitional period will only enter into force if all the terms of the agreement are agreed upon. However, in other cases, some UK-based lenders have used a passport for EU banking services to offer certain services in such schemes, as they are regulated businesses in the UK. Such a pass is expected to be finally lost after Brexit.

However, after the end of the current transitional period under the withdrawal agreement with the EU, the UK will be able, in the short term, to retain temporary access to EU financial markets. However, in the longer term, these financial service providers may be excluded from EU credit markets and, as a result, the range of sources of financing available to borrowers may be limited after Brexit. It is not clear whether the loss of a passport would affect the credit facilities received under documents or credits that were renewed prior to withdrawal from the United Kingdom. Companies wishing to obtain a passport in accordance with miFID II should inform us by filling out the corresponding form in MiFID II technical standards. The forms must be sent to PRA-passporting@bankofengland.co.uk. The revised agreement has fewer tax obligations than in its previous version. It states that the parties adhere to the principles of good fiscal governance and the fight against harmful tax practices.