970. Are foreign financial institutions (FFIs) located outside of Russia potentially subject to the prohibitions of 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)?
Yes. The prohibitions of the Russia-related CAPTA Directive apply to a U.S. financial institution’s opening or maintaining of a correspondent account or payable-through account for or on behalf of, or processing of a transaction involving, any FFI, wherever located outside of the United States, determined to be subject to the prohibitions of the Russia-related CAPTA Directive, or their property or interests in property—which includes FFIs 50 percent or more owned, directly or indirectly, individually or in the aggregate, by one or more FFIs determined to be subject to the prohibitions of the Russia-related CAPTA Directive. This includes, for example, banking subsidiaries that are 50 percent...
1) The FAQ appears to confirm -- with the reference to "by one or more FFIs determined to be subject to the prohibitions of the Russia-related CAPTA Directive" -- that the 50% rule does not apply "across directives". This is the case with the SSI Directives as well.
2) Note that the limitation of the directive to "foreign financial institutions" appears to be an outgrowth of FinCEN's definition of "correspondent account".
See 31 CFR § 1010.605(c):
(c) Correspondent account. (1) The term correspondent account means:
(i) For purposes of § 1010.610(a), (d) and (e), an account established for a foreign financial institution to receive deposits from, or to make payments or other disbursements on behalf of, the foreign financial institution, or to handle other financial transactions related...