The Czech National Bank hereby notifies clients and beneficiaries who have contractual relationships with foreign credit institutions providing products and services in the Czech Republic on the basis of authorisation granted in the United Kingdom of Great Britain and Northern Ireland (“credit institutions”) that in the event of the withdrawal of the United Kingdom from the European Union under Article 50(2) of the Treaty on the European Union without an agreement on the conditions of the withdrawal, the authorisation of foreign credit institutions to carry on their business in the Czech Republic will end and their further activities will temporarily be governed by Act No. 74/2019 Coll., on Amending Certain Matters in Connection with the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union (“Lex Brexit”).
Lex Brexit allows foreign credit institutions to carry on business to a limited extent in the Czech Republic during a transition period running from the date of withdrawal from the European Union until 31 December 2020. Foreign credit institutions will only be authorised to perform activities in the Czech Republic that are necessary to settle claims and debts arising from contractual relationships (Article 24(1) of Lex Brexit). Foreign credit institutions may not conclude new insurance contracts or amend the content of existing ones. Their further actions should be aimed at settling their obligations in the Czech Republic or obtaining authorisation to carry on business of a credit institution in compliance with Act No. 21/1992 Coll., on Banks, as amended.
Any termination of the authorisation of foreign credit institutions to carry on their business in the Czech Republic is without prejudice to the validity of existing contractual relationships, and the obligations arising from them must be fulfilled by the contracting parties.
If you have a contract with a foreign credit institution or are a beneficiary of such a contract, the Czech National Bank expects the foreign credit institution to inform you of the legal consequences of the withdrawal of the United Kingdom from the European Union in respect of the rights and obligations arising from contracts and also of the actions that will be taken by the foreign credit institution to settle claims and debts arising from these contracts.
The Czech National Bank will supervise compliance with duties by foreign credit institutions in the Czech Republic during the aforementioned transition period.
Further partial specific rules are contained in Article 13 of Lex Brexit relating to building savings.