1. For the purposes of point (a) of Article 382(4) of Regulation (EU) No 575/2013, institutions shall consider as non-financial counterparties established in a third country, counterparties that meet both of the following conditions:
they are established in a third country;
they would qualify as a non-financial counterparty within the meaning of point (9) of Article 2 of Regulation (EU) No 648/2012 if they were established in the Union.
2. Institutions shall verify whether a counterparty is a non-financial counterparty established in a third country:
at trade inception when trading with a new counterparty;
on an annual basis for existing counterparties;
where there is reason to believe that the counterparty is no longer a non-financial counterparty established in a third country.
3. Institutions shall substantiate their opinion that an undertaking is a non-financial counterparty established in a third country.