Art. 17 Branches and subsidiaries in third countries | Anti-money laundering regulation (AMLR) | AML

This article directly extends the group-wide AML/CFT framework established in Article 16 to situations where a group operates in third countries with weaker or incompatible regulatory regimes.

It places the responsibility firmly on the parent undertaking to ensure its overseas branches and subsidiaries still meet EU-equivalent standards.

Where local law in a third country actively prevents full compliance, the article sets out an escalating response: the parent must take additional measures, notify home supervisors, and if those measures are deemed insufficient, supervisors can impose severe consequences including requiring the group to cease operations in that country entirely.

Important points:

Ensure that all branches and subsidiaries located in third countries with less strict AML/CFT requirements comply with the requirements of this Regulation, including on data protection.
Where local third-country law blocks compliance, take additional measures to manage money laundering and terrorist financing risk and inform home Member State supervisors — who may escalate up to requiring closure of operations in that country.
AMLA is required to develop regulatory technical standards by 10 July 2026 specifying what those additional measures and supervisory actions must look like in practice.

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.
1. 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.
1. 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.
1. 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.