Subject: CAMS-ii, ACH/IAT, and CAMS-ii OFAC Screening — Updated
On September 18, 2009, an International ACH Transaction (IAT) rule from NACHA – The Electronics Payments Association, goes into effect. The new rule requires that all U.S. financial institutions and other organizations sending and receiving IATs include additional remittance data that identifies both the sender and recipients. This rule also includes financial institutions that conduct domestic transactions only or do not process ACH payments. The new IAT rule requires organizations to include all ancillary information that makes a payment fully understood and available for further investigation.
The rule originated because of a request by the U.S. Office of Foreign Assets Control (OFAC) and the Financial Action Task Force (FATF) to change the ACH requirements and rules for cross-border payments. The purpose of the IAT rule is to enable financial institutions to identify international ACH payments, and perform due diligence as required by OFAC.
Your CAMS-ii system had the enhancements to support the IAT installed with the mid-year release in July 2009.
In response to questions from some credit unions, we have developed a short list of FAQs on how CAMS-ii handles ACH, IAT, and OFAC in light of this new rule.
Note: You must be licensed for CAMS-ii OFAC Screening for the questions/answers about OFAC screening to apply.
1. Question: What exactly does CAMS-ii do in regard to IAT compliance?
Answer: The following is a summary of the CAMS-ii IAT process.
+ Perform OFAC scan
+ List any OFAC exceptions (This appears on the ACH exceptions report in Back Office > Standard > exceptions\Pendings >ACH Exceptions and OFAC Exceptions):
- Detected only by CBS
- Detected by the ACH Gateway operator and confirmed by CBS
- Detected by the ACH Gateway operator and not detected by CBS
+ The credit union is expected to review/process the OFAC exceptions and you clear or return the ACH item via ACH exceptions.
+ IAT items that clear the member's accounts will show the full addendum information in the member history.
+ The OFAC compliance log reports that the item was scanned.
2. Question: Does CAMS-ii process the new ACH files with the ancillary information (addenda) for IAT?
Answer: Yes.
3. Question: What if the IAT transactions come in a separate ACH file?
Answer: The CAMS-ii ACH module recognizes these files, processes them as ACH files, and screens them for OFAC compliance.
4. Question: If there is a possible match between an element of an IAT file and the OFAC list, how does CAMS-ii report it?
Answer: It is reported as an OFAC Exception in Exceptions/Pendings (Back Office > Standard > Exceptions/Pendings). The exception includes the addendum that includes the ancillary information. The matching information is highlighted in yellow as in other OFAC Exceptions.
5. Question: Is there any record made of the OFAC scan of the IAT file to prove credit compliance?
Answer: In addition to the electronic record of the exception, the OFAC Compliance Log (Back Office > Standard > OFAC/FinCEN) lists each time the system scans an IAT file, registering it with the ACH/IAT event label.
6. Question: We are not licensed for the CAMS-ii OFAC screening software on our system. How would ACH items be scanned when the file comes in for us and will they be in an area we can get to them to scan under our OFAC software before they post? Will they be in with our exceptions?
Answer: If you do not have CAMS-ii OFAC Screening, you can view today's ACH file (Back Office > ACH > Processing > View ACH Files) and search for IAT to see if you have any entries so that you could run your OFAC scan. Since CAMS-ii does not run the scan, there is not a way to prevent the item from posting, nor can it appear in the CAMS-ii Exceptions/Pendings.
Please address any questions on these topics to the CBS Issue Tracking System.