(1) The Secretary of State may not grant to a third country competent authority -

(a) approval as an approved third country competent authority unless the Secretary of State is satisfied that condition A is met; or

(b) provisional approval as an approved third country competent authority unless the Secretary of State is satisfied that condition B is met.

(2) Condition A is that the third country competent authority is adequate in relation to its ability to co-operate with the competent authority on the exchange of audit working papers and investigation reports.

(3) Condition B is that it is likely that -

(a) the third country competent authority is adequate in relation to its ability to co-operate with the competent authority on the exchange of audit working papers and investigation reports; and

(b) that adequacy can reasonably be expected to have been established before the end of the period of provisional approval.