On 7 March 2019, the EPC published its decision paper on Brexit and United Kingdom’s (UK) payment service providers’ (PSPs) participation in the EPC SEPA payment schemes, approving UK Finance's application for the continued participation of UK PSPs in the EPC SEPA payment schemes, even in the event of a “no-deal Brexit”, provided that the UK keeps complying with the relevant SEPA participation criteria.
 
On 31 January 2020, the UK formally left the European Union (EU) and entered into an 11-month transition period, agreed within the Withdrawal Agreement with the EU, which will run until 31 December 2020, 11 PM, GMT.

By effects of said transition period, until 31 December 2020 the UK is a non-European Economic Area (EEA) country temporarily part of the European single market and customs union, subject to the relevant EU regulatory framework.

Therefore, as communicated earlier this year during the remainder of the transition period the UK will continue operating within the scope of the SEPA payment schemes without any change, due to the fact that existing EU rules and regulations will continue to apply in the UK. To this extent, between 1 February and 31 December 2020, no new requirement will apply, and no changes will be needed for the SEPA Credit Transfer (SCT) / SEPA Direct Debit (SDD) transactions to and from the UK.

However, as of 1 January 2021 as no extension of the transition period was agreed, the UK is set to leave the single market and customs union, either with an EU-UK deal, negotiated during the transition period, or without it (i.e. "no-deal" Brexit). For clarity, the UK will at that point maintain participation in the SEPA geographic scope, however, this important change will make the SCT/SDD rules applicable to transactions from/to non-EEA jurisdictions also applicable to SCT/SDD transactions with the UK. 

The EPC therefore requests all PSPs to implement without delay the measures described below, to ensure a continued smooth processing of cross-border SEPA payments involving a UK-based SEPA payment scheme participant after 31 December 2020. 

SEPA transactions to be executed or settled as of 1 January 2021 involving a UK-based SEPA payment scheme participant must contain: 

For SCT and SEPA Instant Credit Transfer (SCT Inst) instructions from the Originator: 

• The full address details of the Originator. 
• The BIC code of the Beneficiary Bank when the Originator Bank explicitly requests this data element from the Originator.

For SDD Core and SDD Business-to-Business (B2B) collection files from the Creditor: 

• The full address details of the Debtor.
• The BIC code of the Debtor Bank when the Creditor Bank explicitly requests this data element from the Creditor. 

The lack of these additional transaction details may lead to rejected transactions or potential other issues from the scheme participant receiving the payment message, i.e. the Beneficiary Bank in case of SCT and SCT Inst instructions and the Debtor Bank in case of SDD collections (or from their respective clearing and settlement partners in the interbank space).

Therefore, the EPC strongly recommends each SEPA payment scheme participant to identify as soon as possible its customers with incoming and outgoing cross-border SEPA transactions involving both a UK and an EEA payment account, and to inform all customers concerned about the need to provide these extra SEPA transaction data as from 1 January 2021 (as execution or settlement date).

SEPA payment scheme participants with questions on the above are invited to contact the relevant National Adherence Support Organisation (NASO) or the EPC directly.

In line with the abovementioned EPC Board decision of 7 March 2019, the EPC will regularly monitor the developments of Brexit throughout the transition period and thereafter.