I want a better understanding of the new IAT rule on ACH transactions. Our bank said it applies to ACH payments to recipients in Canada only. Our understanding is that it applies to all foreign country recipients. Can you please clarify?


According to NACHA's IAT Industry Information page, IAT files apply to all international payments, not just Canadian. In fact, the recipient and the originator organizations are ultimately irrelevant when it comes to determining whether a payment should be handled domestically or as an IAT. What matters is if the payment is handled by a foreign financial agency at any stage of the process.

According to NACHA's IAT Executive Summary, a financial agency is involved in a payment if it:

  1. Holds an account that is either credited or debited as part of the transaction
  2. Receives funds or makes payment of funds directly to a person involved in the transaction
  3. Serves as an intermediary in the settlement of any part of the transaction

As a result, it's possible for some payments with domestic originators and domestic receivers to be considered IATs because the financial organization doing the settlement is foreign. In addition, according to Priscilla Holland, NACHA's senior director of international programs, the rules apply to financial agencies in any country, not just Canada.

Also see NACHA's IAT Executive Summary

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