The Immigration Act 2014 prohibits banks and building societies from opening current accounts for people who are known not to have leave to remain in or to enter the UK. From 1 January 2018, there will be additional requirements to carry out periodic checks of the immigration status of existing current account customers.
Who does this affect
Banks and building societies that operate current accounts in the UK, including banks that are UK branches of EEA banks and non-EEA banks.
What the Immigration Act currently does
The Immigration Act 2014 prohibits banks and building societies from opening current accounts for people who are 'disqualified persons'. This is unless the bank or building society has carried out a status check that indicates the individual concerned is not a ‘disqualified person’.
What the amended Immigration Act will do
The Immigration Act 2014 has been amended by the Immigration Act 2016. The amendments to the 2014 Act come into force on 30 October 2017. There will be a number of additional requirements on banks and building societies, outlined below.
Banks and building societies will be required to carry out a quarterly ‘immigration check’ for existing current accounts operated by a disqualified person. The first immigration check is required to be carried out for the quarter beginning on 1 January 2018.
If such an account is identified, the bank or building society must notify the Home Office. The Home Office will then check if the person is a disqualified person and, in certain circumstances, will notify the bank or building society of their duty to close the account as soon as reasonably practicable. The bank or building society is required to inform the Home Office of the resulting action taken through a website operated by the Home Office.
The FCA's role
The Immigration Act 2014 (Bank Accounts) Regulations currently place a duty on the FCA to monitor and enforce compliance with the existing prohibition. These regulations have been amended to extend the FCA’s duty to monitor and enforce compliance with the new requirements once they come into force.
We are currently consulting on our approach to the amended Immigration Act and regulations, including reporting, monitoring and enforcement.
Quarterly Consultation No.16, March 2017
Disqualified persons
A disqualified person is a person who is in the UK, who does not have the required leave to enter or remain in the UK, and whom the Home Secretary considers should not be permitted to open a current account.
Identifying a disqualified person - new current accounts
To ensure they are complying with the Act, banks and building societies can carry out an immigration ‘status’ check with a specified anti-fraud organisation or data-matching authority (CIFAS).
This can be done before opening a new current account operated by:
• a consumer
• a micro-enterprise, or
• a charity (with an annual income under £1 million)
Where the check identifies that the applicant is a disqualified person, the firm must refuse to open the account.
This prohibition includes:
• opening joint current accounts for any disqualified persons
• opening a current account where the disqualified person is a signatory or is identified as a beneficiary
• adding any disqualified person as a current account holder, signatory or identified beneficiary in relation to an existing current account
Banks and building societies that refuse to open a current account for someone who is disqualified must tell that person the reason for the refusal. This is as long as doing so does not conflict with their duties under other legislation.
The Home Office has produced information, including a particular form of words, for firms to provide to individuals who are refused an account in those circumstances.
The current prohibition does not apply to existing current accounts unless a new account holder, signatory or identified beneficiary is being added.
Identifying a disqualified person - new requirements for existing current accounts
From 1 January 2018, banks and building societies will also be required to carry out quarterly immigration checks through CIFAS, the specified anti-fraud organisation or data-matching authority.
This immigration check is to be carried out on certain existing current accounts, excluding current accounts operated or held by or for an individual who is acting (with respect to that account) for the purposes of trade, business or profession.
If a current account operated by or for a disqualified person is identified, the bank or building society will be required to notify the Home Office of any accounts held. For these purposes, an “account” includes, but is not limited to, a financial product by means of which a payment may be made, and therefore includes accounts that are not current accounts.
What banks and building societies need to have in place
If you are a firm that operates current accounts, you must:
- Make arrangements to comply with the Immigration Act, including the prohibition in section 40, and from 30 October 2017, the requirements in sections 40A, 40B and 40G.
- Put in place record-keeping procedures relating to your compliance with the Immigration Act. Keep these records for at least 5 years.
- Tell us if you have any problems complying with the Immigration Act by contacting your usual FCA supervisory contact as soon as is reasonably practicable.
- Confirm to us that you are complying with the provisions of the Immigration Act each year. You will need to make arrangements to use form FIN A on Gabriel.
Find out more
- The legislative requirements are contained in the Immigration Act 2014 and subsequent Regulations, and not in our Handbook:
- The new legislation, the Immigration Act 2016, which is not yet in force:
- Contact CIFAS on ImmigrationAct@cifas.org.uk
- FCA’s reporting requirements in the Supervision Manual, 16.19
- FCA Feedback statement in Handbook Notice 17
- FCA's March 2017 Quarterly Consultation No.16
- Contact your trade association
- Information for consumers on opening a bank account.
Whistleblowing
We would encourage you first to use the whistleblowing procedures in your workplace.
If there aren't any or if you don't feel able to do so, then you can ring the FCA Whistleblowing Team:
- 020 7066 9200 during office hours or
- leave a message on voicemail and, if you wish, we will ring you back
- email us at whistle@fca.org.uk
- write to us at:
Intelligence Department (Ref PIDA)
Financial Conduct Authority
25 The North Colonnade
London E14 5HS
