PRESS RELEASE FROM THE CENTRAL BANK OF ICELAND:
In view of the current circumstances, the Central Bank of Iceland wishes to explain how cross-border payments take place in instances where the Central Bank of Iceland acts as an intermediary.
The following is an example of a payment from the United Kingdom to Iceland; however, the example applies to all currencies and to payments both to and from Iceland.
References to sending payment to Iceland in foreign currency are somewhat misleading. Payments made in pounds sterling (GBP) never leave the United Kingdom’s payment systems. The same applies to Denmark and the Danish krone (DKK), the Eurozone and the euro (EUR), and so forth. A payment intended for a recipient in Iceland is deposited to an Icelandic bank’s account with a British bank in London. Then, on the basis of the information accompanying this deposit, the Icelandic bank transfers funds to the ultimate recipient.
At present, such deposits are made to the Central Bank of Iceland’s account with National Westminster Bank. When the Central Bank receives information on such a payment, it transfers funds to the recipient’s commercial bank and sends the payment information to that bank. The commercial bank then deposits the funds to the recipient’s bank account.
Because the Central Bank is an additional intermediary in this instance, it could prove complicated to arrange for payments to Iceland via online banking. There are examples where this has caused problems and delayed payment. The Central Bank recommends strongly that the party remitting payment contact his bank and request a conventional transfer of funds if he is in doubt about how to fill out an international payment order on the Internet.
There have also been instances where payments are deposited to the Central Bank’s accounts without any further information apart from the amount of the deposit, which appears on daily statements. This has resulted in delayed processing of payments. In order to enhance the likelihood that the Central Bank will receive prompt and correct information, the payor should request that his bank send each payment as an “International Customer Transfer” and that the Central Bank be sent a so-called SWIFT MT103 message. If this is done, funds can be transferred to the relevant commercial bank on the day the Central Bank receives the payment.
In other respects, the Bank makes reference to the payment instructions for various currencies, which can be found on the Central Bank website here.
Peter, I don’t know what your gripe with the IOM and Guernsey depositors is but I find your opinion to be harsh and full of assumptions.
Having been an expat previously I know exactly how difficult it is to get a UK institution to deal with your business (this was before 9/11). They virtually drive you into the hands of their offshore subsiduaries who usually reward you with an interest rate 0.5 to 1% lower than you can get ‘onshore’ and then you get taxed on that interest according to your local tax jusrisdiction.
If you, like me, were an onshore depositer in one of these banks then we are in the lucky positions of having either got, or being about to get our money back. Except it’s not our money we’re getting back we’re getting bailed out by the UK taxpayers.
Having experienced a tiny bit of the anxiety these folks have gone through surely has made you, like me, sympathetic to their horrendous plight.
@Peter
“Nobody would stop someone open a bank in their country of residence”
Your making an assumption there. Who said they were resident in the UK? Some may well be. But not all. If you are a British citizen but live abroad you will not be able to open an account in the UK.
You will still have to pay UK taxes but you will not be eligible to open bank accounts or use the NHS amongst other things. Many contractors are in such a position.
So you’re wrong.
Kam:”Some of those people had no choice but to bank off shore as they were not allowed to open accounts in the UK.”
Complete and utter tripe. Nobody would stop someone open a bank in their country of residence and UK banks have made it plain they they have no objections to expats keeping their old bank accounts open. Another lie to justify their own bad judgement.
The UK IR is investigating IoM accounts again after the last investigation resulted in many tens of millions of tax repayments. Bang goes the ‘we are UK tax payers argument”.
>>That was a trifle harsh wasn’t it?!
Possibly, but nothing compared to losing out to Iceland’s banking system.
@Peter,
That was a trifle harsh wasn’t it?! Some of those people had no choice but to bank off shore as they were not allowed to open accounts in the UK. This was covered in some earlier threads.
That said, i think the UK definitely did the right thing seizing the assets. It has pretty much proved to be the only leverage we had on the slippery shouldered Icelandic government. If it wasn’t for that and the fact that they had to go cap in hand to the IMF Haarde would still be sticking two fingers up at us. I feel really sorry for those that have lost so much to those thieves in the Icelandic government and find it hard to understand why those financial institutions outside of the EU are not pressing charges against Haarde and Co. for their criminal transfer of assets to Iceland. Personally i think Haarde should (literally) hang for this. His actions and his government have caused untold hardship on some of those depositors. I don’t doubt for one minute there will be more than just a few ex-depositor suicides over this festive period caused by this whole Iceland scandal.
KSFIOM victim:
you are a self-deluded fantasist. Do you honestly believe the KSF leaves hundreds of millions of pounds sitting in bank accounts to be seized by the UK?
I’ll explain it.. they don’t. If there was any cash laying about it would have been transferred to Iceland long ago to prevent the banks failing.
The ‘Parental Guarantee’ you refer to is meaningless, it obviously not legally binding in anyway. Iceland will treat you according to its laws, and tell you to get stuffed.
The IoM schemes will cover you for your £35k as you would expect. Don’t expect to get anything else however, you deliberately banked outside the EU law so you should have been fully aware of the risks you took.
Good luck.
I just got a pay in USD refuse, That’s one month it is like this now !!
So I’m just gonna depose it to my foreign bank account and this money will never go in iceland… That’s so stupid !
It would be so much simpler for us and around 10,000 other depositors who trusted Iceland and Icelandic banks had the UK government not seized our life/retirement savings deposited with Kaupthing Singer and Friedlander in the Isle of Man. It would be simpler if the Government of Iceland will honour its “parental guarantee” of the value of KSFIOM deposits. Our best wishes go out to the people of Iceland. We wish we could join your growing Saturday demonstrations, but are too far away. Lets hope that our governments find a way forward for all of us in the growing cold of the forthcoming winter!
It would be so much easier if you would not first destroy and than seize iceland’s banks, dear mr. Oddson, wouldn’t it be?