722.If a subsidiary of a firm from a country subject to a third country decision is already authorised in an EU member State then its entitlement to exercise passport rights (see explanatory notes to Schedule 3) to establish a branch or provide services in another member State is not affected if by the third country decision.  This is not the case for subsidiaries of third country firms authorised in EEA States which are not also EU member States (Norway, Iceland or Liechtenstein), referred to in the Act as “EFTA firms” (subsection (8)).  EFTA firms may not exercise their passport rights following a third country decision relating to the country of their parent.  This section therefore gives the Treasury the power to make a determination that a particular firm does, or class of firms do, not qualify for authorisation under Schedule 3.  Subsections (6) and (7) set out the procedure the Treasury must follow if it makes such a determination.
Commentary on Sections Part Xxviii: Miscellaneous Section 408: EFTA firms