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International ACH Transactions (IAT)

Effective September 18, 2009

The National Automated Clearing House Association (NACHA) will require a new format for certain ACH transactions. This new rule changes the data file formats required to originate U.S. domestic ACH transactions when they are part of a payment chain that begins or ends in another country. Payment transactions that begin as wires, or interbank transfers from abroad that are converted to ACH by a U.S. financial institution, are included in this definition and need to be formatted according to international ACH transaction rules. Transactions that begin as ACH payments destined for other countries also need to comply with the new format. These ACH payments must be formatted using the new standard entry class code, international ACH transaction (IAT).

The new IAT format is designed to help law enforcement agencies detect, investigate and prosecute money laundering and other financial crimes by creating and preserving an information trail of entities sending and receiving funds through U.S financial institutions' monetary systems. Your company is responsible for identifying these payment transactions, formatting them according to the rules and paying any fines for non-compliance.

If you have any questions regarding this upcoming regulation, please contact your treasury management officer or service representative.

For complete information about NACHA rules and participants' obligations, please visit the NACHA Web site at: www.nacha.org.


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