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IAT - International ACH Transactions

Resources

For some time, SFE has been informing our members about the IAT regulations that became effective on September 18, 2009.

What sometimes comes as a surprise is that
every RDFI and ODFI
will face these new regulatory requirements.

NACHA rules now require every ACH payment entering or exiting the United States to be identified and formatted as an International ACH Transaction (IAT) and review (or screen) for OFAC compliance.

The IAT regulations affects every financial institution, even those that do not currently send or receive international ACH payments, because every financial institution has the potential to receive an IAT transaction after the implementation date.

This means that every financial institution needs to understand how it is impacted by the IAT rules regarding acceptance and review of these items. Acceptance of these items is mandatory. Penalties for non-compliance with OFAC's regulations can be severe.

Tips for IAT compliance:

• Familiarize appropriate staff about new IAT rules and requirements.
• Verify your vendors readiness (but understand that using a third party in your ACH process does not change your responsibilities and accountabilities for compliance).
• Ensure downstream applications - (i.e., DDA, reporting systems, statements, online banking platforms, etc.) can accept new format and processing requirements.
• Update and maintain all applicable procedures and provide training on those procedures.
• Implement an ACH OFAC compliance policy for both receipt and origination (if applicable) of IAT transactions.
• Research and verify Originators for possible IAT scenarios that would cause your organization to become a Gateway Operator.
• Research and verify existing agreements with Corporate Originators and vendors to ensure IAT compliance.
• Educate all Originators on IAT requirements
• Review additional processing costs for IAT transactions.
• Review Account Analysis Statement to ensure new services can be included.

For more information, call us at 1-800-626-4733.
As always, our Accredited ACH Professionals
are here to field your questions.