Effective September 18, 2009, ACH transactions must be identified as International ACH Transactions (IAT) if

• they are funded from a non-domestic source, or
• the funds will be sent to a non-U.S. financial agency (even if their original destination is a U.S. financial institution).

As an ACH Originator you are now required to determine whether ACH transactions that you originate meet any of the criteria that require you to use the IAT format.

An International ACH Transaction is defined as an ACH entry that is part of a transaction involving a financial agency’s office that is not located in the territorial jurisdiction of the United States. The IAT SEC code indicates that the movement of funds between the U.S. and non-U.S. accounts is specifically tied to that ACH transaction, either on the origination or receiving side of the transaction

If any of the following questions apply to your company there is a greater chance that some or all of the ACH items you originate through Whitney National Bank may need to be sent using the IAT format and Standard Entry Class (SEC) code.

• Is your company a subsidiary of a multi-national company and receives funding from a foreign office?
• Does your company have foreign subsidiaries that supply or receive funding for transactions?
• Does your company buy from or sell to organizations or individuals outside the territorial jurisdiction of the United States and settle the transactions using the ACH Network?
• Does your company send payroll, pension or benefit payments via the ACH Network to individuals that have permanent resident addresses outside the territorial jurisdiction of the United States?

If you originate ACH transactions through Whitney National Bank and have transactions that may qualify as IAT, please contact your Treasury Management Sales Specialist.  Changes will need to be made to your Whitney National Bank ACH configuration in order for you to originate IAT transactions.

IAT Rule Change Background

Changes to the ACH network and NACHA rules are being made due to requirements by the U.S. Office of Foreign Assets Control (OFAC) to be able to identify ACH transactions that are international in scope. As a result, transactions that involve a non-U.S. financial agency and use the ACH network for part of the transaction are required to use the IAT SEC code and format. Specific data elements as defined by the Bank Secrecy Act's (BSA) "Travel Rule" are required to be included with each IAT transaction.

Transactions that are not identified as IAT may be returned by the receiving bank. ACH rules violations may also result in fines from NACHA, the association that oversees the Automated Clearing House (ACH) Network. U.S. corporations are also required to comply with OFAC obligations and the penalties for ignoring those obligations can be both criminal and civil.

IAT Resources:

The following sites have more information about the new IAT format and how to identify which ACH transactions should use the new format:

NACHA IAT Corporate Toolkit:

http://www.nacha.org/IAT_Industry_Information/

Federal Reserve FedACH IAT Resource Center: http://www.frbservices.org/eventseducation/education/fedach_iat_resource_center.html