Operational implications of a “no-deal Brexit” on SCT and SDD transact...

Operational implications of a “no-deal Brexit” on SCT and SDD transactions

02 September 19

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On 7 March 2019, the published its decision paper on Brexit and United Kingdom (UK) payment service providers’ ( ) participation in the Single Euro Payments Area ( ) payment schemes. The Board approved the application from UK Finance for the continued participation of UK in the payment schemes in the event of a “no-deal Brexit”.

If a “no-deal Brexit” occurs on 31 October 2019, the UK would leave the European Union ( ) immediately without a transitional period. Consequently, consumers, businesses and public bodies would have to respond immediately to the various changes created by a “no-deal Brexit”. However, as stated above, the UK would maintain its participation in the payment schemes. 

From the payments perspective, in case of a “no-deal Brexit”, as of 1 November 2019 the UK will have to be considered as a non-European Economic Area ( ) country like currently Andorra, Guernsey, Isle of Man, Jersey, Monaco, San Marino, Switzerland and Vatican City State.

The strongly encourages all payment scheme participants to implement without delay the following recommendations to ensure a continued smooth processing of cross-border payments involving a UK-based scheme participant in case of a “no-deal Brexit” scenario. 

transactions to be executed or settled as of 1 November 2019 involving a UK-based scheme participant must contain: 

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

  • The full address details of the Originator

Both rulebooks determine that the attribute AT-03 ‘Address of the Originator’ must be provided for all transactions when either the Originator Bank or the Beneficiary Bank is based in a non- country or territory.

The Originator Bank must include the full address details of the Originator in each interbank cross-border and Inst transaction when that transaction involves a UK-based / Inst scheme participant as either the Originator Bank or the Beneficiary Bank. 

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

Not every -based Originator Bank may be technically able to derive the BIC from the IBAN of the Beneficiary when this IBAN is held at a UK-based Beneficiary Bank. Likewise, a UK-based Originator Bank may no longer be able to process ‘IBAN-only’ and Inst instructions addressed to -based Beneficiary Banks.

Therefore, all and Inst scheme participants in the UK and the must inform their customers that as a Beneficiary, as a precaution, they mention both their IBAN and the corresponding BIC on their invoices or in another communication addressed to the Originator when either the Beneficiary or the Originator uses an IBAN managed by a UK-based scheme participant.

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

  • The full address details of the Debtor

Both rulebooks determine that the attribute AT-09 ‘Address of the Debtor’ must be provided for all collections when either the Creditor Bank or the Debtor Bank is based in a non- country or territory. 

The Creditor Bank must request its Creditor customers to include the full address details of the Debtor in each cross-border collection when that transaction involves a UK-based scheme participant as either the Creditor Bank or the Debtor Bank. 

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

Not every -based Creditor Bank may be technically able to derive the BIC from the IBAN of the Debtor when this IBAN is held at a UK-based Debtor Bank. Likewise, a UK-based Creditor Bank may no longer be able to process ‘IBAN-only’ collections addressed to -based Debtor Banks.

Therefore, the Creditor Banks concerned must inform their Creditors that, as a precaution, they provide the Creditor Bank with the BIC of the Debtor Bank when the Creditor Bank itself or the Debtor Bank listed in the collection is a UK-based scheme participant.

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

Therefore, the strongly recommends each scheme participant to identify as soon as possible its customers with incoming and outgoing cross-border transactions involving both a UK and an payment account, and to inform all customers concerned about the need to provide these extra transaction data in case of a “no-deal Brexit” as from 1 November 2019 (as execution or settlement date).

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



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