International ACH Transactions (IAT)
General Overview of IAT
Effective September 18, 2009, an amendment to the ACH Rules became effective that (1) require ODFIs and Gateway Operators (newly identified participant) to identify all international payment transactions transmitted via the ACH Network as International ACH Transactions using the Standard Entry Class Code (IAT); and (2) require IAT transactions to include the specific data elements defined within the Bank Secrecy Act's (BSA) "Travel Rule" so that all parties to the transaction have the information necessary to comply with U.S. law, which includes the programs administered by the Office of Foreign Assets Control (OFAC). This amendment will align the Rules with OFAC compliance obligations and make it easier for RDFIs to comply with those requirements.
A Gateway Operator is an ACH Operator or a Financial Institution that acts as an entry point to or exit point from the United States for payment transactions. ACH Operators and ODFIs acting in the role of Gateway Operators have specific warranties and obligations related to IAT entries.
|Payment Transaction +||Financial Agency +||U.S. ACH Network||= IAT|
|If instruction and settlement of the transaction is handled by a →→||Financial agency located outside the territorial jurisdiction of the U.S., and →→||The transaction flows through the U.S. ACH Network, then →→||Use of the IAT SEC Code is required.|
What is a Financial Agency? It is an entity that is authorized by applicable law to accept deposits (e.g., RDFI) or is in the business of issuing money orders or transferring funds.
Where do you find more information about IAT?
UMACHA has numerous IAT classes that provide you with the information needed for both origination and receipt of IAT entries.
You can find links and resources on the 'IAT Resources' page.