Recital 20

(20) Third-country branches should also be classified as class 1 where the head undertaking is subject to regulation and the oversight and implementation of that regulation are not determined to be at least equivalent to what is required by Directive 2013/36/EU and Regulation (EU) No 575/2013, or where the relevant third country is listed as a high-risk third country that has strategic deficiencies in its anti-money laundering and counter-terrorist financing regime in accordance with Directive (EU) 2015/849. Those third-country branches pose a significant risk to financial stability in the Union and the Member State of establishment because the regulatory or anti-money laundering and counter-terrorist financing frameworks that apply to their head undertaking fail to adequately capture or fail to permit the proper monitoring of the specific risks that arise from the activities conducted by the branch in the Member State, or of the risks to counterparties in the Member State that arise from the third-country group. For the purpose of determining the equivalence of the third country’s banking prudential and supervisory standards to the Union’s standards, the Commission should be able to instruct EBA to conduct an assessment and issue a report on the relevant third country’s banking regulatory framework in accordance with Article 33 of Regulation (EU) No 1093/2010. EBA should ensure that the assessment is conducted in a rigorous and transparent manner and in accordance with a sound methodology. Furthermore, EBA should also consult and cooperate closely with the third country’s supervisory authorities, the government departments in charge of its banking regulation and, where appropriate, private sector parties, endeavouring to treat those parties fairly and to give them the opportunity to submit documentation and make representations within reasonable timeframes. Furthermore, EBA should ensure that the report issued is adequately reasoned, sets out a detailed description of the matters assessed and is delivered within a reasonable timeframe. In order to ensure uniform conditions for the implementation of this Directive, implementing powers should be conferred on the Commission to adopt decisions on the equivalence of the banking regulatory frameworks of third-country branches. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (11).

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Source: EUR-Lex CELLAR · retrieved 2026-09-04 · Text as adopted (Official Journal); later amendments are not incorporated in this text.