# AMLR Art. 17 — Branches and subsidiaries in third countries - **Part of:** [[AMLR]] - **FATF keying:** [[FATF R.18 - Internal controls and foreign branches and subsidiaries|FATF R.18]] - **Swiss provisions:** [[GwV-FINMA Art. 5 - Foreign branches and group companies|GwV-FINMA Art. 5]] - **Detailed citation:** GwV-FINMA Art. 5 ## What it requires AMLR Art. 17 applies where branches or subsidiaries sit in third countries with weaker minimum AML/CFT standards: the parent must ensure they meet the Regulation's own requirements, including on data protection, or equivalent ones. Where the third country's law itself blocks compliance, the parent must take additional measures to handle the ML/TF risk effectively and inform its home supervisor; if the supervisor finds those measures insufficient, it can order the group not to enter into, or to terminate, business relationships or transactions, or to close the operation there. ## Swiss position GwV-FINMA Art. 5 requires a financial intermediary to ensure its foreign branches and financial- or insurance-sector group companies observe the GwG/ordinance principles - GwV-FINMA Art. 7-8 (prohibited assets and relationships), identification of the contracting party, establishing the controlling person or beneficial owner, a risk-based approach including risk classification, and the special clarification duties for elevated risk - and states this applies in particular to subsidiaries and branches in internationally recognised higher-risk countries (Abs. 2). Abs. 3 requires notifying FINMA where local rules conflict with these principles or cause a serious competitive disadvantage. Abs. 4 refers the reporting of suspicious transactions or relationships, and any asset freeze, to the host country's own rules. ## Key divergences Both mechanisms address the same problem - third-country law standing in the way of group-wide compliance - through different routes. AMLR Art. 17 sets a compliance benchmark (the Regulation's own standard, or equivalent) and, where local law blocks it, requires the parent to take additional risk-mitigating measures and notify the home supervisor, who can then order the group to restrict, unwind or exit the business. GwV-FINMA Art. 5 frames the duty instead as the Swiss intermediary's own obligation to ensure specified GwG/ordinance principles are observed abroad, with a duty to notify FINMA where local rules obstruct that or cause a serious competitive disadvantage (Abs. 3). It sets out no escalation ladder of supervisor-ordered additional measures, restriction, termination or closure comparable to AMLR Art. 17(2), and uses no equivalent-measures standard tied to the Regulation itself. Reporting of suspicious transactions or relationships, and any asset freeze, are left to host-country rules (Abs. 4) - a carve-out with no counterpart in AMLR Art. 17. ## Further connections *These links come from an article-by-article comparison of the primary texts. They add to the provisions listed at the top of this note and make no equivalence claim.* - [[GwV-FINMA Art. 6 - Global legal and reputational risk|GwV-FINMA Art. 6]] — Both involve notifying the supervisor of cross-border obstacles, but on different triggers: AMLR Art. 17(2) applies where third-country law does not permit compliance and requires additional risk measures, which are notified to the home supervisor who may act further; GwV-FINMA Art. 6 Abs. 3 applies where access to customer, controlling-person or beneficial-owner information in a country is excluded or seriously impeded for legal or practical reasons and requires immediate notice to FINMA. *(related)* - [[VSB 20 Art. 1 - Scope|VSB 20 Art. 1]] — AMLR Art. 17(1) requires the parent to ensure that third-country branches and subsidiaries with less strict AML rules comply with the AMLR or equivalent; VSB 20 Art. 1 Abs. 1 does not apply to foreign branches, representations and subsidiaries directly (see Arts. 11, 19, 43) but Abs. 2 prohibits banks from using foreign branches and banking or financial group companies to circumvent it. *(related)* ## Authoritative text > [!quote]- Regulation (EU) 2024/1624 (AMLR), Article 17 — English text (EUR-Lex, CELEX 32024R1624) > **Article 17** > *Branches and subsidiaries in third countries* > 1. Where branches or subsidiaries of obliged entities are located in third countries where the minimum AML/CFT requirements are less strict than those set out in this Regulation, the parent undertaking shall ensure that those branches or subsidiaries comply with the requirements laid down in this Regulation, including requirements concerning data protection, or equivalent. > 2. Where the law of a third country does not permit compliance with this Regulation, the parent undertaking shall take additional measures to ensure that branches and subsidiaries in that third country effectively handle the risk of money laundering or terrorist financing, and shall inform the supervisors of its home Member State of those additional measures. Where the supervisors of the home Member State consider that the additional measures are not sufficient, they shall exercise additional supervisory actions, including requiring the group not to enter into any business relationship, to terminate existing ones or not to undertake transactions, or to close down its operations in the third country. > 3. By 10 July 2026, AMLA shall develop draft regulatory technical standards and submit them to the Commission for adoption. Those draft regulatory technical standards shall specify the type of additional measures referred to in paragraph 2 of this Article, including the minimum action to be taken by obliged entities where the law of a third country does not permit the implementation of the measures required under Article 16 and the additional supervisory actions required in such cases. > 4. Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in paragraph 3 of this Article in accordance with Articles 49 to 52 of Regulation (EU) 2024/1620. ## Sources - AMLR Art. 17 - CELEX 32024R1624 - GwV-FINMA SR 955.033.0, Art. 5