Menu
The National Automated Clearing House Association (NACHA) is an organization that manages the development, administration, and governance of the Automated Clearing House (ACH) network.
The Office of Foreign Assets Control (OFAC) is an agency of the United States Department of the Treasury that administers and enforces economic and trade sanctions based on United States foreign policy and national security goals against targeted foreign countries, terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation of weapons of mass destruction.
All U.S. persons must comply with OFAC regulations, including all U.S. citizens and permanent resident aliens regardless of where they are located.
Yes, ACH receivers and originators are subject to U.S. law, including OFAC sanctions.
As part of its enforcement efforts, OFAC publishes a list of individuals and companies owned or controlled by or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific. Collectively, such individuals and companies are called Specially Designated Nationals (SDNs). Their assets are blocked and United States persons are generally prohibited from dealing with them.
Standard Entry Class (SEC) codes are used to distinguish different types of entries in ACH transactions. The codes have different formats and requirements. Some of the more commonly used codes are:
The fines for violations can be substantial. OFAC violations can be both criminal and civil and include both jail time and fines. Depending on the program, penalties for violations can include fines ranging up to $20 million and imprisonment of up to 30 years.
Not complying with the requirements of the new IAT SEC code could have a number of consequences. NACHA rules violations carry fines. If these fines are levied against the financial institution they may be passed back to the corporate originator depending on the specifics of the case and the details of their contract with the financial institution.
Know your customer (KYC) is the process used by a business to verify the identity of their clients. Knowing whom you are doing business with can prevent your organization from inadvertently facilitating money laundering. An inadequate or nonexistent Know Your Customer system can result in the firm, as well as individual employees, being subject to civil and/or criminal penalties.
Know your customer (KYC) is the process used by a business to verify the identity of their clients. Knowing whom you are doing business with can prevent your organization from inadvertently facilitating money laundering. An inadequate or nonexistent Know Your Customer system can result in the firm, as well as individual employees, being subject to civil and/or criminal penalties.
Requires financial institutions in the United States to assist U.S. government agencies to detect and prevent money laundering.
The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce is responsible for the regulation of exports for national security, foreign policy, and nonproliferation reasons, as well…
A relationship entered into between a small bank and a big bank in which the big bank provides a number of deposit, lending, and other services.
Electronic funds transfer or EFT refers to the computer-based systems used to perform financial transactions electronically. An EFT is the electronic exchange or transfer of money from one account to…
The Financial Crimes Enforcement Network (or FinCEN) is a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat…
Any public or private bank, credit union, or savings and loan, subject to national and state banking laws, and capable of both accepting deposits and making loans. These institutions collect…
The International Bank Account Number (IBAN) is an international standard for identifying bank accounts across national borders in a way that would minimise the risk of propagating transcription errors.
Know Your Business is the due diligence review of your business and industry which when reviewed against Money Laundering techniques allows you to develop policies and assess suspicious activities or…
Know Your Customer is the due diligence and bank regulation that financial institutions and other regulated companies must perform to identify their clients and ascertain relevant information pertinent to doing…
The Money Laundering Control Act of 1986 is a United States Act of Congress that made money laundering a Federal crime.
Money Services Business is a legal term defined by federal law and regulation. Part of a 1999 ruling revising the regulatory definitions of certain non-bank financial institutions for purposes of…
Non-SDN list also known as the PLC list. Listed are individuals who are members of the Palestinian Legislative Council, and transactions with these individuals must be rejected. Non-SDN list is…
Office of Foreign Assets Control. A US regulatory Agency that is responsible for monitoring funds held or transferred to illegal entities. The OFAC list is a list of companies/individuals that…
Politically Exposed Persons: Individuals, or their relatives, who are prominent public functionaries.
A routing number that was once the primary routing number for an institution and since replaced, but still accepted for payments.
A potentially suspicious or money laundering situation raises a Red Flag or warning signal.
The Red Flags Rules are part of the Fair and Accurate Credit Transactions (FACT) Act of 2003. Under these Rules, financial institutions and creditors with covered accounts must have identity…
A number that is no longer active (or no longer accepted by an institution) for check transactions, ACH transactions and/or wire transfers.
The routing number (also referred to as RTN, routing transit number, ABA or bank routing number) is a nine-digit numeric code printed on the bottom of checks. This number is…
Under SEC rules, safe-harbor provisions protect management from liability for making financial projections and forecasts made in good faith.
The Specially Designated Nationals (SDN) List is a publication of OFAC which lists individuals and organizations with whom United States citizens and permanent residents are prohibited from doing business. A…
Web service is part of a SOAP architecture and is defined as “a software system designed to support interoperable machine-to-machine communication”.