Dear Sir/Madam,

We are seeking clarification regarding recent changes introduced by the EBA concerning the eligibility of agricultural land and forests as collateral for the purposes of calculating Risk-Weighted Assets (RWA) under the CRR framework.

According to the updated EBA interpretation, agricultural land and forest land may be treated as eligible collateral, provided they are insured. However, in Croatia, insurance coverage exists only for crops—not for the land itself. This creates a significant implementation challenge, particularly for forest land, which does not contain insurable crops at all, making it impossible to obtain the required insurance.

In light of this, we kindly request clarification on the following points:

1. Can agricultural or forest land be treated as eligible collateral under CRR if the required insurance cannot be obtained due to a lack of available insurance products in the local market?
2. Does the absence of crop-related insurance for forest land entirely preclude its recognition as eligible collateral, even if it meets all other requirements (e.g. enforceability, valuation, and monitoring)?
3. How should institutions proceed when collateral types are deemed eligible by the EBA but cannot be insured in practice due to market limitations?
4. Is there flexibility within the CRR framework to accommodate cases where key eligibility conditions (such as insurance) are not achievable despite best efforts, or are alternative treatments available for such exposures?

We would appreciate your guidance and any references to applicable CRR articles or relevant EBA Q&A that may clarify how to proceed in such cases.