International ACH Transactions
|
|
|
|
|
All international payment transactions transmitted via the ACH network must be handled as International ACH Transactions (IAT). The Office of Foreign Assets Control (OFAC) requires credit unions to block property and reject transactions involving any country, entity, or individual on the OFAC Specially Designated Nationals (SDN) and Blocked Persons list.
Portico will reject ALL incoming International ACH Transactions (IAT) to allow the credit union to identify and screen the transactions against the OFAC list as required by OFAC and NACHA. All IAT transactions will be reported on the ACH Exception Items window with an exception code of EIT and on the ACH Exception Short Report 170 in the IAT Transaction category. The addenda information will be provided for each item allowing the credit union ACH clerk to delegate the OFAC screening to another department if necessary.
IAT Transactions appear on the ACH Exception Items window with an IAT button in the SEC Code column. You must perform an OFAC screening on the originator and any correspondent banks associated with the item. Click the IAT button to display the OFAC Confirmation dialog box. You must submit each entity individually by clicking the Submit OFAC button. Once submitted, the button will be replaced with the results of the search to indicate that a check has already been performed on that entity. A warning message will appear when remittance information exists for the transaction.
To help you identify the ultimate beneficiary or foreign payer in an IAT transaction, Portico will extract the payment-related information included in the IAT remittance record and display it on the OFAC Confirmation dialog box. To complete the OFAC check, review the contents of the Payment Related Information field. Identify the name and address and enter the information in the Name, Address, City/State, and Country/ZIP fields. You must enter the first and last name or the business name in the Name field. Then, click the Submit OFAC button to complete the OFAC check.
How do I? and Field Help
The OFAC Confirmation dialog box displays the following information:
Click Cancel to close the dialog box.
The Verification Results dialog box will appear with the results of the OFAC check.
Click Close to display the OFAC Confirmation dialog box.
If the entities pass the screening and the item is still an exception due to the condition of the member’s account, such as NSF, you will be allowed to return the IAT item online. If no exception reason is found and there was not an OFAC match, you can post the item using the ACH Exception Items window.
Any item returned as an OFAC match will present the credit union with the opportunity to enter an OFAC override comment after completing the necessary research. The item can either be returned or posted depending on the results of the research. The results will be stored in the ID Verification web service data base for audit purposes.
Note: To allow users to use the Submit OFAC button, the security permission Integrated Services-OFAC-User must be added to the appropriate security groups (the OFAC check box must be selected and the value must be P or B on the Credit Union Profile – Products & Service tab).
NACHA Guidelines for Inbound IAT Transactions
A Receiving Deposit Financial Institution (RDFI) for Inbound IAT debits should:
- Review all incoming IAT debits for OFAC compliance.
Note: Use of the Gateway Operator Screening Indicator field by the Gateway Operator is optional. An RDFI should not assume entities associated with the transaction do not match the OFAC list because of the presence of a “0” in the Gateway Operator OFAC Screening Indicator, or because of the absence of any indicator in this field. The RDFI should rely on the results of its own investigation. - For transactions that are NOT an OFAC match, post normally.
- Investigate any suspect IAT debits:
- For a suspect transaction cleared by an investigation, post normally;
- For a suspect transaction confirmed as an OFAC match, contact OFAC directly. The Gateway Operator may have missed this transaction or the OFAC list may have been revised. OFAC will handle these situations on a case-by-case basis.
Under these processing guidelines, an RDFI should not receive an inbound IAT debit in which there is a “1” in the OFAC Screening Indicator. This does not relieve the RDFI of its obligation to screen the IAT debits that it receives and report SDN hits to OFAC.
If an RDFI receives notification from a Gateway Operator that an inbound IAT debit destined for one of its accounts has been rejected due to the presence of a blocked party (as described in Gateway Operator Responsibilities, section 5(b)(iv), the RDFI should take appropriate due diligence measures.
A Receiving Deposit Financial Institution (RDFI) for Inbound IAT credits should:
- Review all incoming IAT credits for OFAC compliance.
Note: Use of the Gateway Operator Screening Indicator field by the Gateway Operator is optional. An RDFI should not assume entities associated with the transaction do not match the OFAC list because of the presence of a “0” in the Gateway Operator OFAC Screening Indicator, or because of the absence of any indicator in this field. The RDFI should rely on the results of its own investigation. - For transactions that are NOT an OFAC match, post normally.
- Investigate any suspect IAT credits:
- For a suspect transaction cleared by an investigation, post normally;
- For a suspect transaction confirmed as an OFAC match, contact OFAC directly.
NACHA guidelines for an OFAC match on a credit item states that the credit union should contact the OFAC office, post the credit, and place a FREEZE on the member’s whole account, not just the amount of the transaction. If there is no OFAC match, then the credit union can post the item online.
It is the credit union’s responsibility to comply with OFAC and NACHA rules and procedures regarding IAT transactions. For more information on IAT transactions, refer to the 2009 ACH Rules, or NACHA’s IAT Resource link: http://www.nacha.org/IAT_Industry_Information/
The addenda history associated with a posted IAT transaction is stored with the transaction. Select No Return from the Code drop-down list and click Return Item on the ACH History Inquiry dialog box to see associated addenda records.
The ACH Return Item – Inquiry/Maintenance dialog box will appear with additional tabs that let you review the detail information for the Correspondent, Receiver, and Originator associated with the IAT transaction.
The Correspondent tab will display up to 5 correspondent records. If a remittance record was associated with the transaction, a warning message will appear on this tab.
The Receiver tab displays the credit union member from the ACH record.
The Originator tab displays information about the originator of the IAT transaction.
