Will your direct deposit leave the U.S.? (International ACH)
The Electronic Payments Association (NACHA) requires all direct deposit payments that are sent outside the U.S. to be identified and sent as International ACH Transactions (IATs).
If the entire amount of your direct deposit is ultimately deposited to a financial institution outside the U.S. Please contact the Payroll Office (541) 346-1126 or Accounts Payable (541) 346-4235.
At this time the University of Oregon and State Treasury are not able to process direct deposit records coded as IATs. Therefore, payments that must be coded as IATs will instead be processed using paper checks.
1. What is an IAT transaction?
An IAT (International ACH Transaction) is an ACH (direct deposit) debit or credit entry that is part of a payment transaction originating from or transmitted to an office of a financial agency located outside the territorial jurisdiction of the United States. Corporate business and consumer accounts may receive IAT entries. For example, you may have payment instructions with your bank to move the entire amount of the direct deposit received from the University of Oregon to a foreign financial institution.
2. Why the change in regulations?
Under US Law, banks are required to screen all ACH payments to ascertain if the funds associated with a payment are being remitted to (or being received from) any party subject to the Office of Foreign Assets Control (OFAC http://www.treas.gov/offices/enforcement/ofac/) sanctions. OFAC administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to national security, foreign policy or the economy of the United States. OFAC has authority to impose controls on transactions and freeze assets under US jurisdiction. The IAT rules are intended to assist the banking industry in performing this screening process.
3. Does the new regulation apply to checks or wire payments as well?
No. The regulations only apply to ACH transactions. There are already OFAC regulatory screening requirements within the domestic wire transfer networks.
4. If I am only going to be transferring a portion of my payment do I have to consider my payment an IAT transaction?
No. To be considered an IAT transaction the entire amount of the payment would need to be transferred to a location outside of the United States.
5. Why arent the banks collecting this information?
Banks that transmit funds outside the U.S. already do report to the Federal Office of Foreign Assets Control (OFAC) for security purposes. The new rule is an attempt by OFAC to determine the source of these funds when originally transmitted within the U.S. using the NACHA network. That is why ACH originators (like the university) are being asked to identify and properly code IATs.
6. Where can I see the policy documents that are requiring the university to get this information?
The best resource for the new International ACH Transaction (IAT) rule is the NACHA IAT resource page,
http://www.nacha.org/IAT_Industry_Information/ (see executive summary)