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OFAC FAQ (Current) # 967 - Russian Harmful Foreign Activities Sanctions (PDF contans all versions)

Date issued: Jul. 14 2022

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967. What does Directive 2 under Executive Order (E.O.) 14024, “Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions” (Russia-related CAPTA Directive) prohibit?

The Russia-related CAPTA Directive prohibits U.S. financial institutions from: (i) the opening or maintaining of a correspondent account or payable-through account for or on behalf of foreign financial institutions determined to be subject to the prohibitions of the Russia-related CAPTA Directive; and (ii) the processing of transactions involving foreign financial institutions determined to be subject to the prohibitions of the Russia-related CAPTA Directive. Please see the Russia-related CAPTA Directive for the definition of the terms “U.S. financial institution” and “foreign financial institution” for purposes of this directive. Please see FAQ 969 regarding the applicability of OFAC’s 50 Percent Rule with respect to this directive.

Annex 1 to the Russia-related CAPTA Directive lists the foreign financial institutions...

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TURBOFAC Commentary (366 words)

Notes:

1) This is a general overview of Directive 2 Under EO 14024. See associated FAQs. The FAQ does not provide much in the way of "interpretive guidance." Note the reference to "foreign financial institutions subject to the prohibitions of the Russia-related CAPTA Directive [] also [] subject to additional prohibitions under other sanctions authorities, such as additional directives under E.O. 14024 or E.O. 13662." This is currently the case with Sberbank (subject to SSI Directive 1).

2) Amended on 3-2-2022 to add the following paragraph:

Accordingly, after the relevant effective date, U.S. financial institutions must reject any transaction involving a foreign financial institution determined to be subject to the prohibitions of the Russia-related CAPTA Directive or involving that foreign financial institution’s property or interests in property.