Why is the implementation of IAT necessary?
IAT was developed to respond to OFAC’s request to align the NACHA Rules with OFAC compliance obligations and to make it easier for RDFIs to comply with those obligations. In the current environment, many U.S. financial institutions are receiving international payments that cannot be properly identified. These unidentifiable payments enter the U.S. through correspondent banking relationships and are often difficult to trace or accurately process as international payments. The new IAT code supports the end of anonymity and promotes traceability of international electronic payments.
