M&T Bank : NACHA IAT Rule Change
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Important Notice

International ACH Transaction Rule Change Effective September 18, 2009

On September 18, 2009, an amendment to the National Automated Clearinghouse Association (NACHA) Operating Rules will become effective that has the potential to impact U.S. businesses that send or receive ACH payments. This amendment will require all payments funded internationally or sent to another country via the ACH Network to be identified as International ACH Transactions using a new Standard Entry Class (SEC) Code—IAT. The new Rule will also require that IAT payments include specific data elements defined by the Bank Secrecy Act’s (BSA) “Travel Rule.”

What is “IAT?"
IAT stands for International ACH Transaction, and is a new Standard Entry Class code to identify international ACH payments.  An IAT is an ACH debit or credit entry that is part of a payment originating from or transmitted to an office of a financial agency (ie. bank) located outside the territorial jurisdiction of the United States.

The new IAT rule will identify International ACH Transactions by focusing on where the financial agency that handles the payment is located. Specifically, when any ACH entry is part of a payment that involves a financial agency’s office that is not located within the territorial jurisdiction of the United States, the ACH entry must be identified using the new IAT SEC Code. Thus, certain payments currently formatted as domestic payments, but which are funded internationally, will need to be sent as IATs.

How do I know if the IAT applies to my ACH payments?
If you can answer “yes” to any of the following questions please contact your Relationship Manager or call M&T Treasury Management and Merchant Customer Service at 1-800-724-2240 to discuss how the IAT rule change may impact you.

  • Is your company a subsidiary of a multi-national company?
  • Does your company have foreign subsidiaries?
  • Does your company buy or sell to organizations or individuals outside the territorial jurisdiction of the United States?
  • 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?

Where can I learn more about the IAT impact on ACH payments?
Please reference the following documentation that provides more detail on the IAT rule change and will help you determine if your company will be affected:

IAT Overview
IAT Checklist

For more detailed IAT resources see the below documentation from NACHA's website:

IAT for Corporate Practitioners
IAT Payment Scenarios Simplified
IAT Specific Data Elements

Who at M&T can I talk to regarding the IAT rule change?
To find out more about M&T Bank's Treasury Management solutions, please send us an email, call 1-800-724-2240 to speak with one of our experienced Treasury Management and Merchant Services representatives, or contact your M&T Relationship Manager.

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