IAT Questions

Question 1

What are the funds availability requirements for IAT credits that are received by an RDFI and, when screened, are found to be clean transactions?

Answer 1

IAT credit entries that are screened and identified as clean transactions must be made available for withdrawal or cash withdrawal by the customer on the Settlement Date. The entry must be available at the RDFIs teller facilities by the close of business on Settlement Date or at the ATM by midnight on Settlement Date.

Question 2

International payments are

Answer 2

Debit and credit instructions that are exchanged across national borders to transfer value between an Originator and a Receiver.

Question 3

The primary purpose of the IAT rules is to

Answer 3

Respond to the request from the Office of Foreign Assets Control OFAC to align the NACHA Rules with OFAC compliance obligations. Make it easier for RDFIs to comply with OFAC obligations. Provide the ability to identify all international ACH entries.

Question 4

The IAT rules classify IATs by focusing on

Answer 4

Where the financial agency that handles the payment transaction movement of funds is located, not where any other party is located.

Question 5

An IAT is defined as

Answer 5

An ACH entry that is part of a payment transaction involving a financial agencys office that is not located in the territorial jurisdiction of the United States.

Question 6

When determining if a transaction should be coded as an IAT, you should consider

Answer 6

Receipt of the payment instruction to create the ACH transaction plus explicit funding for the file. Funding for the transaction is transmitted to or received from a financial agency located outside of the territorial jurisdiction of the United States. Any part of the transaction is processed through the U.S. ACH Network.

Question 7

In regard to an Outbound IAT entry

Answer 7

ACH Operator or DFI acting as a Gateway may process both outbound debits and credits.

Question 8

The US Gateway of an Outbound IAT will be the

Answer 8

RDFI of the IAT entry

Question 9

In regard to an Inbound IAT entry

Answer 9

ACH Operator acting as a Gateway may only process inbound credits. A DFI acting as a Gateway may process both inbound debits and credits. When the ACH Operator is only acting as an operator and not a Gateway they can process inbound debits and credits.

Question 10

The US Gateway of an Inbound IAT will be the

Answer 10

ODFI of the IAT entry

Question 11

If a corporation has an established cash management service that funds the companys daily presentments all items cleared including ACH, check, cards, and wires at their financial institution and the funding is received from a financial agency outside the territorial jurisdiction of the U.S. or if funding of a corporations business activities on a recurring basis by a parent company outside the territorial jurisdiction of the United States, do these types of activities trigger an IAT?

Answer 11

No

Question 12

In order for a financial institution to demonstrate compliance with OFAC obligations, they must

Answer 12

Have a clear and thorough written ACH OFAC policy and procedures manual that specifies how IATs will be identified, reviewed, and investigated. Educate and train their employees on new policies. Have a compliance system or procedure that allows for proper handling of transactions and customers.

Question 13

Within the IAT Entry Detail Record there are two fields that are identified as OFAC Screening Indicators. These fields are

Answer 13

Optional

Question 14

The Gateway acts as the

Answer 14

Entry or exit point to or from the United States

Question 15

When the Federal Reserve Bank acts as a Gateway

Answer 15

They intend on screening incoming IAT transactions for OFAC compliance.

Question 16

When the Federal Reserve Bank acts an ACH Operator only

Answer 16

They will not be screening the IAT transactions for OFAC compliance.

Question 17

When a financial institution acts as a Gateway, they must screen IAT transactions. However, populating the OFAC Screening Indicator Field is

Answer 17

Optional, but considered to be a good business practice

Question 18

A Gateway that identifies the presence of a blocked party in an inbound IAT debit should

Answer 18

Cease processing and report the hit to OFAC, the Foreign Gateway, and the RDFI.

Question 19

A Gateway warrants that all transactions originated are in compliance with U.S. law. A financial institution acting as a Gateway should

Answer 19

Screen and clear any suspect IAT transactions before they are originated.

Question 20

Are corporate Originators subject to applicable U.S. law including OFAC enforced sanctions?

Answer 20

Yes

Question 21

The ODFI should

Answer 21

Include a statement in the ODFI Originator Agreement that the Originator may not initiate entries that violate U.S. law. Train and educate their Originators. Inform Originators that the ODFI may need to temporarily suspend processing of a transaction for greater scrutiny or verification against the SDN list and that this may affect settlement and or availability.

Question 22

An ODFI must

Answer 22

Screen and clear any suspect IAT transactions before they are originated.

Question 23

RDFIs must

Answer 23

Screen all parties to incoming IAT transactions prior to processing. Rescreen all 60 day returns and, depending on bank policy, some items with the 2 day return timeframe. Rescreen items.

Question 24

RDFIs must comply with OFAC enforcement policies. In the event the RDFI receives an ACH transaction being made to, from, or on behalf of any party subject to OFAC Sanctions, the RDFI

Answer 24

Is responsible for contacting OFAC immediately for further directions regarding inbound debits. For inbound credits if the blocked party is the Originator, the fund should not be posted but frozen and the OFAC should be contacted. For inbound credits if the blocked party is the Receiver, the RDFI should post and freeze the account. If account is already frozen, the RDFI may return R16.

Question 25

Receivers can dispute funds frozen in a blocking action with OFAC by

Answer 25

Completing Form TD F90 22.54 Application for the Release of Blocked Funds.

Question 26

In a ThirdParty Sender Situation, in which field of the Batch Header Record is the Third Party Sender Identified?

Answer 26

Originator Identification Field

Question 27

In what record of the IAT File Format is the Originator Name Field?

Answer 27

Second Addenda Record

Question 28

A customer advises the financial institution that an ACH transaction appearing on their DDA or savings statement is unauthorized. The customer provides the financial institution with the appropriate Written Statement. The financial institution realizes the transaction is an IAT transaction and 55 days have passed since the settlement date of the entry. The transaction must be rescanned against the SDN list before it can be returned to the ODFI. During the scan, the transaction is now flagged as a hit. What action must the RDFI take?

Answer 28

If the transaction is investigated and found to be an actual hit from the SDN list, you would need to contact OFAC for directions on the processing of this transaction.

Question 29

A financial institution receives incoming IAT credits in their morning file, some of these are IAT payrolls. What must the financial institution do to meet the funds availability requirements?

Answer 29

In regard to funds from IAT payroll files, you have until the branch closes or at the ATM by midnight on Settlement Date.

Question 30

Who should screen and clear any suspect IAT transactions before they are originated.

Answer 30

ODFI

Question 31

Who should screen all parties to incoming IAT transactions prior to processing. Rescreen all 60 day returns and, depending on bank policy, some items with the 2 day return timeframe. Rescreen items.

Answer 31

RDFI

Question 32

Who adds the IAT addenda record for foreign correspondent bank information to the IAT transaction?

Answer 32

U.S. Gateway