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#1214431 - 07/08/09 07:56 PM
IAT and OFAC
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New Poster
Joined: Jul 2009
Posts: 8
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Does anyone know what we are required to have in our OFAC Policy regarding ACH IAT transactions?
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#1214980 - 07/09/09 04:40 PM
Re: IAT and OFAC
Hrothgar Geiger
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Joined: Aug 2006
Posts: 645
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Regarding IAT's, I have some questions as well. I work at a bank in a more rural area, and we really don't see the need to offer IAT transactions to our customers. Can we choose not to originate IAT transactions and have verbiage stating such in our ACH Agreements and policy? Also, I understand that we have to accept IAT transactions, so what are most people using to scan incoming ACH transactions against OFAC, and are you scanning all transactions or just those coded as IAT?
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#1215066 - 07/09/09 06:03 PM
Re: IAT and OFAC
Hrothgar Geiger
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Joined: Mar 2007
Posts: 2,108
gone fishin'
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We do not offer IAT origination to our customers. I believe we have something in our Cash Management policy regarding this. I have Attus WatchDog which can run an Excel/CSV document against a current OFAC list. We will be getting a seperate IAT file from Fed that I will run through Attus  . I will only be checking IAT ACH Transactions
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#1215090 - 07/09/09 06:32 PM
Re: IAT and OFAC
WonderWoman
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Joined: Aug 2006
Posts: 645
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I didn't know that the FED would provide a separate IAT file. That is good to know. So all I have to do is requrest that file, and then run it through an interdiction software?
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#1215609 - 07/10/09 02:48 PM
Re: IAT and OFAC
WonderWoman
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Platinum Poster
Joined: Apr 2005
Posts: 684
Jersey Shore
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(Not as)Newbsa - For incoming IAT - Will you be running through Attus prior to allowing the ACH to post? We were discussing how we could efficiently do this before the item post and the level of risk we have and are leaning to doing it after the fact since the incoming are suppose to be checked by the Fed and if an OFAC hit processing stopped on their end. The outgoing are another matter - these we would run real time.
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#1215653 - 07/10/09 03:14 PM
Re: IAT and OFAC
Hrothgar Geiger
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Gold Star
Joined: Apr 2009
Posts: 450
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I've heard – perhaps incorrectly – that a domestic transaction funding an IAT is also considered an IAT. Is that true or is my source feeding people wildly inaccurate information? If it is true, what implication might that have on MSBs w/ foreign transmittal services?
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#1215687 - 07/10/09 03:36 PM
Re: IAT and OFAC
Jerseygirl
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Joined: Mar 2007
Posts: 2,108
gone fishin'
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Jersey Girl -
We will be running through Attus prior to post.
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My opinions are my own, and not that of my employer.
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#1215808 - 07/10/09 05:35 PM
Re: IAT and OFAC
Hrothgar Geiger
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Gold Star
Joined: Apr 2009
Posts: 450
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I've heard if you have a transfer to another financial institution funding an IAT for payroll, then it's technically an IAT. I'm more confused than concerned right now, because my bank's not planning to originate yet.
What I am worried about is the potential impact on MSB monitoring. If we have a customer offering foreign transmittal through Western Union, does anything change from the status quo? Will Western Union batch IAT's separately? It would seem to defy logic to put the onus on the financial institution with MSB accountholders, but I haven't heard a clear answer yet.
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#1216050 - 07/10/09 08:27 PM
Re: IAT and OFAC
Hrothgar Geiger
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Gold Star
Joined: Apr 2009
Posts: 450
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So, the transaction has to be directly sent or indirectly sent through an intermediary instructed to send the funds to an RDFI outside the US for it to be an IAT.
The example I was given by someone was vague and does not necessarily match your example (although it seems close enough), which only added to my confusion regarding the rule. I think you've cleared it up for me. Thanks.
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#1216193 - 07/10/09 11:09 PM
Re: IAT and OFAC
Pat Patriot Act
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10K Club
Joined: Jun 2005
Posts: 10,395
Jersey Shore
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So, the transaction has to be directly sent or indirectly sent through an intermediary instructed to send the funds to an RDFI outside the US for it to be an IAT.
For transactions originating within the US, yes. On the reverse, an incoming IAT must originate from a foreign financial institutions to be an IAT. I'm glad I could help.
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#1217836 - 07/15/09 10:05 PM
Re: IAT and OFAC
Hrothgar Geiger
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Platinum Poster
Joined: Jun 2002
Posts: 771
South
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I need some clarification for RDFIs with respect to a suspect transaction. I'm reading the Supplement #1-2009 to the NACHA Operating Rules regarding handling violative transactions as the RDFI. It states if the RDFI receives a violative debit transaction, the RDFI should investigate the transaction and if it's found to be in violation of an OFAC sanction, should contact OFAC for guidance. OFAC will handle these transactions on a case by case basis. There is no time limit for the resolution of the suspect transaction. The RDFI needs to ensure that it communicates with the ODFI on the resolution of the suspect transaction. See the section on "Blocking and Reporting" for mroe detail on the process required to block proceeds of a violative transaction and report to OFAC.
Okay with that stated, is there a required timeframe for resolving the suspect transaction? Our ACH Officer (at my bank) states for debit entries, there is still a 2-day return timeframe. If so, please provide where I can find this in NACHA's Operation Rules and/or any rule update document?
OFAC does not always return a call the same day or the next day, for that matter...........so I don't see how the required timeframe could be 2 days.
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#1218145 - 07/16/09 05:08 PM
Re: IAT and OFAC
Hrothgar Geiger
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Platinum Poster
Joined: Jun 2002
Posts: 771
South
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I understand the necessity to separate the suspect transaction but need to know NACHA's timeframe to resolve whether it's a valid hit after contacting OFAC.
Our 3rd party vendor for OFAC processing will allow us to separate the file (domestic vs international) and then scan the IATs for OFAC screening.
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CAMS
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#1219207 - 07/20/09 04:19 PM
Re: IAT and OFAC
Hrothgar Geiger
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100 Club
Joined: Apr 2004
Posts: 111
laboratory
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back to the original question: does anyone have a written OFAC ACH IAT they would be willing to share? Or, any ideas? thanks a bunch
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#1220109 - 07/21/09 08:08 PM
Re: IAT and OFAC
Hrothgar Geiger
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100 Club
Joined: Apr 2004
Posts: 111
laboratory
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No disrespect intended with my original question. Only looking for some help/guidance. Thank you anyway... I think.
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#1222253 - 07/24/09 06:12 PM
Re: IAT and OFAC
E. Lavenza
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Platinum Poster
Joined: Apr 2005
Posts: 684
Jersey Shore
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HG
Going back to your response from 7/10 - Am I misinterpreting the OFAC requirements relating to the Fed as the Gateway operator and their not pocessing the incoming IAT if its a potential match?
Under the OFAC requirements:
– A Gateway Operator that identifies the presence of a blocked
party in an inbound IAT debit should cease processing of the entry
– Gateway Operator will need to report the hit to OFAC, the Foreign
Gateway Operator, and the RDFI (should send the RDFI a copy of
the rejected transaction)
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#1222271 - 07/24/09 06:23 PM
Re: IAT and OFAC
Jerseygirl
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Joined: Jun 2005
Posts: 10,395
Jersey Shore
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From the most recent OFAC guidance on inbound IAT To the extent that an ODFI/GO screens inbound IAT debits for possible OFAC violations prior to execution and in the course of such screening discovers a potential OFAC violation, the suspect transaction is to be removed from the batch for further investigation. If, at the conclusion of the investigation, the ODFI/GO determines that the transaction does appear to violate OFAC regulations, the ODFI/GO should refuse to process the transfer. The procedure will apply to transactions that would normally be blocked as well as to transactions that would normally be rejected for OFAC purposes based on the information In the payment. ODFI/GOs must report rejected IAT debits to OFAC within ten days pursuant to OFAC's Reporting, Procedures and Penalties Regulations (31 CFR Part 50 I Section 603). OFAC offers a voluntary form for the reporting of rejected transactions on its website ( http://www.treas.gov/offices/enforcement/ofac/legal/forms/e recjectreport I.pdf) In other industry Q&A sessions, the Fed has stated that in its operations as a Gateway Operator it will not remove the item from the batch, nor will it report the potential match to OFAC. It will simply set the 'potential match' flag and move on. I've not seen that in writing to date.
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