French Monetary and Financial Code
In forceI. - The provisions of this article shall apply where there is no agreement between the European Union and a State which is not a member of the Union and where an existing agreement does not deal with the recognition and enforcement of resolution procedures in force in that State.
II. - Without prejudice to VIII, where the resolution college participates in a college of European resolution authorities referred to in Article L. 613-59-1, the resolution college and the resolution authorities shall consult each other with a view to reaching a joint decision on the possibility of recognising the resolution procedures of a non-EU Member State relating to a credit institution or investment firm from that State or to a parent undertaking that meets either of the following conditions:
1° It has subsidiaries authorised as credit institutions or investment firms established in at least two Member States or branches referred to in the first paragraph of I of Article L. 511-10 or in Article L. 532-48 located in at least two Member States and considered by the latter to be of significant importance;
2° It has assets, rights or commitments located in at least two Member States or governed by the law of these Member States.
III. - When a joint decision on the recognition of resolution procedures in a country that is not a member of the European Union has been reached, the resolution college shall provide all its assistance to ensure that the resolution procedures in question are carried out in France.
IV. - In the absence of a joint decision or in the absence of a college of European resolution authorities and without prejudice to VIII, the resolution college shall take a decision on the recognition and execution of resolution procedures in force in a non-member state of the European Union relating to a credit institution or an investment firm in a non-member state or a parent undertaking.
The decision shall take into account the interests of each Member State in which a non-EU credit institution or investment firm or parent undertaking carries on business, including the potential impact of the recognition and enforcement of the resolution procedures of the State in question on the other entities of the group and on financial stability in the Member States concerned.
V. - The resolution college may decide:
1° To implement resolution measures with regard to:
a) The assets of a credit institution, investment firm or parent undertaking of a third country which are located in France or are governed by French law ;
b) The rights or obligations of a credit institution or investment firm in a non-EU Member State that are recorded in its accounts by one of its branches referred to in I of Article L. 511-10 or in Article L. 532-48 respectively, or that are governed by national law or whose claims are paid in France;
2° To carry out the transfer of equity securities mentioned in Chapter II of Title I of Book II or other ownership securities to a subsidiary of the Union authorised in a Member State, including by requiring another person to take steps to carry out this transfer;
3° To implement the measures referred to in II of Article L. 613-56-2 and in Articles L. 613-56-4 and L. 613-56-5 with regard to the rights of any party to a contract entered into with an entity referred to in II, where such measures are necessary to apply the resolution procedures of a State that is not a member of the European Union;
4° Provided that the essential obligations of the contract, in particular the payment and delivery obligations and the provision of a guarantee, continue to be fulfilled:
a) Prevent the application of any contractual right to terminate, set off or accelerate contracts;
b) To modify the contractual rights of the entities mentioned in II and other entities of a group when this right arises from a resolution measure taken in respect of the credit institution, investment firm or parent undertaking of a State which is not a member of the European Union, whether by the resolution authority of the State in question or in application of the law of that State relating to resolution.
VI. - The collège de résolution may take a resolution measure in respect of a parent undertaking located in France where the authority of a non-EU Member State concerned finds that a credit institution or investment firm meets the conditions for the opening of a resolution procedure under the national law of that State. The provisions of Articles L. 613-45-1 and L. 613-50-4 shall apply.
VII. - The recognition and enforcement of resolution proceedings in a State that is not a member of the European Union shall not prevent the application of the provisions of Book VI of the Commercial Code.
VIII. - After consulting the members of the college of European resolution authorities provided for in Article L. 613-59-1, the college of resolution authorities may oppose the recognition or execution of a resolution procedure of a non-member state of the European Union when it considers :
1° That this resolution procedure could have negative effects on financial stability in France or in another Member State ;
2° That it is necessary to take other resolution measures in application of Article L. 613-62-2 in respect of a branch of a credit institution referred to in the first paragraph of I of Article L. 511-10 or a branch of a third-country undertaking referred to in Article L. 532-48;
3° That creditors in Member States, in particular depositors, would not benefit from treatment equivalent to that applied to creditors covered by the resolution procedure implemented by the non-EU Member State;
4° That this procedure would have significant budgetary and fiscal implications in France;
5° The implementation of this procedure would be likely to produce effects contrary to the law applicable in France.
