1. 1.These Standards form part of the Country and Transfer Risks Regulation. All Banks must comply with these Standards, which expand on the Regulation. These Standards are mandatory and enforceable in the same manner as the Regulation.
2. 2.Banks engaged in international activities are exposed to the risk that conditions and events in a foreign country will adversely affect their financial performance. They are further exposed to the risk that capital controls or foreign exchange restrictions may limit the ability of a foreign counterparty, branch or subsidiary to make contractual payments. These country and transfer risks could threaten the soundness of a bank if not monitored and controlled.
3. 3.A Bank’s board of directors is in ultimate control of the bank and accordingly, ultimately responsible for the bank’s approach to country and transfer risk. Country and transfer risks may not be material for all banks. The Board is responsible for ensuring that country and transfer risks exposures are identified and if required, that appropriate policies and procedures are in place to manage those risks. There is no one-size-fits-all or single best solution. Accordingly, each Bank could meet the minimum requirements of the Country and Transfer Risks Regulation and Standards in a different way and thus may adopt a country and transfer risk framework appropriate to the risk profile, nature, size and complexity of its business and structure. The onus is on the bank’s board to demonstrate that it has implemented an approach that adequately addresses country and transfer risks. Banks are encouraged to adopt leading practices that exceed the minimum requirements of the Regulation and Standards¹.
4. 4.The Standards follow the structure of the Regulation, with each article corresponding to the specific article in the Regulation.

¹ The Central Bank will apply the principle of proportionality in the enforcement of the Regulation and Standards, whereby smaller banks may demonstrate to the Central Bank that the objectives are met without necessarily addressing all of the specifics cited in the Standards.