The Office of Foreign Asset Control (OFAC) requested the development of a new Standard Entry Class code for ACH (Automatic Clearing House) transactions to identify international transactions.  Prior to September 18, 2009 international ACH transactions looked like a domestic ACH transactions.  As of September 18th the code IAT (International ACH Transaction) is required to be used by financial institutions when funds are transmitted beyond the territorial jurisdiction of the United States.

This change affects all of us who use Ebay, Pay Pal, debit cards, or have paychecks sent or received outside the territorial jurisdiction of the United States.  

Corporate originators of international ACH transactions are now obligated to identify those transactions to the financial institution handling their ACH transactions.  Penalties for ignoring this obligation may include both criminal and civil offence, which can result in both jail time and fines from $10,000 to $10,000,000 per occurrence.  If these penalties are levied against the financial institution, they may be passed along to the corporate originator, depending on the circumstances.  

Your ACH transaction may be required to be identified as an IAT if your company is a subsidiary of a multi-national company; if your company has foreign subsidiaries; or if your company buys or sells to organizations or individuals outside the territorial jurisdiction of the United States.  You can contact your financial institution to learn more about the impact of the IAT on your company.

The software your company uses may need to be updated to incorporate this change to ACH codes if you are transmitting beyond the territorial jurisdiction of the United States.  Questions regarding your software may be directed to the SS&C Business & Tax Services, Inc. Information Technology Department.