Question
Does the requirement to draw up a group recovery plan as established in Article 7 (1) of Directive 2014/59/EU (BRRD) also cover non-EU subsidiaries?
Background on the question
Article 7 (1) of Directive 2014/59/EU (BRRD) provides that the group recovery plan shall “identify measures […] to be implemented at the level of Union parent undertaking and each individual subsidiary”. Article 12 of Directive 2014/59/EU (BRRD) expressly provides that “the group resolution plan shall identify measures for the resolution of […] subsidiaries that are part of the group and are located outside the Union”. Is it the case that under Article 7 (1) the group recovery plan should cover also non-EU subsidiaries in line with provisions applicable to group resolution plans?
Answer
The group recovery plan should cover also subsidiaries that are part of the group and are not located in the Union. In this respect, it also seems logical that the competent authority's decision to include a subsidiary in a third country in the group recovery plan should be consistent with the scope of prudential consolidation pursuant to Article 19 of Regulation (EU) No 575/2013 (CRR). Disclaimer: This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General Financial Stability, Financial Services and Capital Markets Union) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.