Definition of IAT Entries

Industry participants have indicated difficulty in understanding the existing definition of IAT. The intent of this rule is to provide more clarity for users when making IAT determinations.

Details

This new language will replace the existing definition of IAT with the following:

SECTION 8.55 “International ACH Transaction” or “IAT Entry” or “IAT”

“an Entry that is the U.S. ACH network component of an international payment transaction.

For purposes of this definition, an international payment transaction is a transfer of funds or monetary value that (a) originates with, transits through, or is delivered to an account at an office of a financial agency located outside of the U.S., or (b) otherwise is received from a sender or delivered to a receiver, in each case, via a facility of a financial agency located outside of the U.S.

For purposes of this definition, financial agency means an entity that is authorized by applicable Legal Requirements to provide financial asset accounts, including deposits, or to conduct the business of issuing general purpose payment instruments or transferring funds or other monetary value for third parties.

An IAT Entry cannot be a Same Day Entry.”

Technical

This amendment will become effective September 18, 2026.

In addition to the definition of IAT (Article Eight Section 8.55), other rule language will be adjusted to incorporate the new language:

Subsection 2.5.8.1 General Rule

Aligns general rule language for IAT Entries to incorporate the proposed IAT definition.

Article Eight, Section 8.44 – “Financial Agency”

Removes the formal definition of a Financial Agency.

Article Eight, Section 8.45 – “Foreign Correspondent Bank”

Revises the reference to Financial Agency, as defined, to adopt a more generic use of the term “financial agency”.

Appendix Three Subpart 3.2.2 Glossary of Data Elements – Standard Entry Class Code

Updates the IAT SEC Code description to align with the proposed IAT definition.

Impact

The anticipated benefits of this rule change include:

For Originators, Third Party Service Providers/Third Party Senders (TPSPs/TPSs) and Originating Depository Financial Institutions (ODFIs):

Improved understanding of what makes an ACH transaction an IAT.

Easier compliance based upon this improved understanding.
Improved customer due diligence, when appropriate.
Improved customer service.

For Receiving Depository Financial Institutions (RDFIs):

Potential reduction in entries received that are mis-identified as IATs.

The potential impacts of this rule change include:

For Originators, TPSPs/TPSs and ODFIs:

Potential alteration of IAT volume based upon new IAT understanding.

If the new definition causes a shift from a domestic payment to IAT, new IAT Originator on-boarding activities could be required.