Frequently Asked Questions
Why were the NACHA Operating Rules related to International Payments changed?
Changes to the ACH formats and rules for cross-border payments were made in response to the request of the Office of Foreign Assets Control (OFAC) and the Financial Action Task Force (FATF) Special Recommendation VII, in order to align NACHA rules with the requirements of the Bank Secrecy Act.

What is an International ACH Transaction (IAT)?
An International ACH Transaction is an ACH entry that is part of a payment transaction involving a financial agency’s office that is not located in the territorial jurisdiction of the United States. Specifically, an office of a financial agency is involved in the payment transaction if it:

• Holds an account that is credited or debited as part of a payment transaction.
  
  
• Receives funds directly from a Person or makes payment directly to a Person as part of a payment transaction.
  
  
• Serves as an intermediary in the settlement of any part of a payment transaction.

What is a “payment transaction?”
A payment transaction is a sender’s instruction to a bank to pay, obtain payment of, or cause another bank to pay or obtain payment of, a fixed or determinate amount of money to be paid to (or obtained from) a receiver. Payment transactions also include any and all settlements, accounting entries or disbursements that are necessary or appropriate to carry out the instruction.

As a corporate originator/receiver, do I have OFAC responsibilities?
ACH Receivers and Originators are subject to U.S. law, including OFAC sanctions. Originating Financial Institutions will obligate an Originating Company or Third Party Sender through the warranties in their ACH origination agreement or terms & conditions. The Originating Company acknowledges that they may not initiate ACH entries that violate the laws of the United States. Mercantil Commercebank is not a Gateway Originating Bank and therefore does not originate International ACH Transactions (“IAT”). All outbound ACH transactions are limited to domestic transactions, and all incoming IAT’s are subject to the OFAC regulations.

What if I ignore my OFAC responsibilities?
OFAC violations carry penalties. These can be both criminal and civil and vary by sanctions program. Penalties can include:

• Imprisonment of the employee (10-30 years depending on the program).
  
  
• Fines per count to corporate and individuals ($10,000 - $10,000,000 per count), and forfeiture of property.

Where can I find more information and resources regarding IAT?
You can view additional information regarding International ACH Transactions by going to the
link below:

www.nacha.org/IAT_Industry_Information

Rev.: September, 2009 | Back to top