What is an IAT?  ι  It might be an IAT if...  ι  Who will be affected?  ι  Key Issues
OFAC Requirements  ι  How can VolCorp help?  ι  VolCorp IAT Committee  ι  Industry Information

International credit and debit payment instructions that are exchanged across national borders to transfer value between an Originator (sender) and a Receiver (beneficiary). NACHA Rules will require every ACH payment entering or exiting the United States to be identified and formatted as an International ACH Transaction (IAT). Furthermore, the existing SEC codes for cross border payments (CBR and PBR) will be deleted and replaced by the new SEC code IAT for International ACH Transactions.

• You receive ACH files from local financial institutions that are owned by foreign FIs, it might be an IAT.
• You have corporate customers that have employees or retirees living overseas, it might be an IAT.
• You have customers that buy or sell internationally through PayPal and similar applications, it might be an IAT.
• You have consumer or business customers that travel overseas and make purchases using either a debit card or check, it might be an IAT.
• You have customers with decoupled debit cards linked to an account at your FI and they travel overseas and use the card, it might be an IAT

• All financial institutions that receive ACH transactions (RDFIs) will need to establish a written OFAC compliance policy for the handling of IAT transactions and meeting OFAC compliance obligations.
• Financial institutions that originate ACH transactions (ODFIs) will need to educate their staff on the implications of the IAT changes, educate their Originators on the obligations for Originators with the IAT rule changes, determine if they have Originators that are currently originating ACH transactions that meet the definition of the IAT, and establish a written OFAC compliance policy.

• Develop and implement written OFAC compliance policy or revise existing policy
• Identify IAT entries and screen for OFAC compliance
• Provide IAT information on periodic statements
• Educate staff
     - OFAC compliance obligations
     - Handling of IAT entries, including Returns and NOC’s
• Review fee schedules

All areas of your credit union must be ready on September 18, 2009, including operations, compliance, member services, marketing/sales, and your data processing system as penalties for non-compliance with OFAC’s regulations can be severe. Credit unions can contract with other parties for OFAC review, but CANNOT contract away their liabilities related to OFAC compliance.



Under OFAC’s revised requirements, a Gateway Operator that identifies the presence of a blocked party in an inbound IAT debit should cease processing the entry, and should take several additional steps to report the hit to OFAC, the Foreign Gateway Operator, and the RDFI.

OFAC further expects that Gateway Operators’ notifications to RDFIs about OFAC hits will eventually take place through the ACH Network. NACHA will issue additional guidance when methods and procedures for these notifications are established.

Click here for a complete copy of NACHA’s Inbound IAT Debit Processing Recommendations and Guidance for Gateway Operators and RDFIs.



VolCorp has created an IAT Committee for the purpose of educating our members about how the new IAT requirements will affect them. The goals of this committee include:

• IAT preparation guide
  IAT Readiness Checklist for RDFIs
  
• Help with resources to complete your ACH OFAC policies
  IAT OFAC Policy Guidance

• Cassie Fivecoat – Chair, Ext. 282
• Karen Clabough Warren – Co-Chair, Ext. 270
• Michelle Palmer, Ext. 277
• Susan Wilkerson, Ext. 229

Phone: (800) 470-3444 or (615) 232-7900



NACHA

• IAT Executive Summary
• IAT Revised FAQs (revised 2/4/09)
• IAT FAQs on Formatting (revised 2/27/09)
• Revised Inbound IAT Debit Processing Guidance (revised 3/18/09)
• IAT Processing and the “Effect of Illegality”
• Glossary and Terms of International ACH Transactions

Industry

• OFAC Reporting Forms
• OFAC
• Sample of OFAC Policy (Not endorsed by VolCorp)
• Vendor Readiness
• OFAC SDN List
• OFAC FAQs
• FedACH IAT Resource Center

Resources

2011 ACH Rule Book
IAT Survival Guide (can be purchased from NACHA or TACHA)

• www.nacha.org
• www.tacha.org