4.3 Assessment of cross border aspects

Institutions should inform resolution authorities about the governing law and national specificities of assets, items, business and entities falling in the transfer perimeter upon request.

Institutions should flag items, falling in the transfer perimeter or upon request, that are only transferrable within the same Member State and identify potential workarounds.

In order to comply with Article 67 of Directive 2014/59/EU and article 30 Commission Delegated Regulation (EU) 2016/1075, resolution authorities should discuss during the resolution planning phase with third country authorities the possibility to exercise transfer powers over items governed by the third country law. Based on the outcome of the discussion, the resolution authority will have to assess whether the following options are doable:

• (i) The third country authority will r ecognize the resolution authority’s transfer powers;
• (ii) The third country authority will not recognize the resolution authority’s transfer powers, but will not object a transfer validated by the entity subject to resolution;
• (iii) The transfer will only be possible after considerable cost and time in resolution.

In order to support resolution authorities in their assessment under the previous paragraph, institutions, based on the legal characteristics of the elements of the transfer perimeter, should analyse, and inform resolution authorities about, the feasibility/credibility of:

• - a confirmatory agreement signed by the institution subject to resolution recognizing the transfer to the acquirer (either the buyer, the bridge institution or the asset management company) attesting the transfer in the terms and conditions settled by the resolution authority (in line with Article 67(1), point (a), of Directive 2014/59/EU);
• - resolution-resilient clauses in the contracts to recognise and inform the counterparty that the contract may be subject to the exercise of resolution powers (in line with Article 67(1), point (a), of Directive 2014/59/EU);
• - the transfer of the items governed by third country law to an ad hoc entity (such as a special purpose vehicle) under the domestic governing law and to have the entity ownership instruments transferred as part of the transfer perimeter.

Institutions should bring to the authorities’ attention any case of third country law imposing to said institutions to support its subsidiary, under which third country items will have to be included in the transfer perimeter.