Foreign Asset Control Requirements
Prohibition on Direct Deposit to Financial Institutions Outside the United States
The Comptroller’s office does not participate in International ACH Transactions (IATs). Direct deposit payments are restricted to domestic financial institutions.
The Office of Foreign Assets Control (OFAC) requires that all direct deposit payments transmitted outside the United States be identified and monitored. In addition, the National Automated Clearing House Association (NACHA) has specific rules regarding IATs. For instructions on maintaining the IAT Indicator in TINS, see the IAT and TINS IAT Indicator Tutorial.
Each paying agency is responsible for ensuring that direct deposit payments issued to accounts at U.S. financial institutions are not being transferred to financial institutions outside the United States.
- The International Payments Verification section on the Direct Deposit Authorization form (74-176) asks payees to indicate if their payments will be forwarded to a financial institution outside the United States.
- When a payee answers yes in this section, direct deposit information must not be set up in TINS.
- Agencies must require the payee complete the ACH (Direct Deposit) Payment Destination Confirmation form (74-227) to determine if they can or cannot move forward with the direct deposit setup. If the payee does not complete this additional form, agencies are responsible for providing it to the payee for completion.
Agencies must maintain copies of their payees’ completed ACH (Direct Deposit) Payment Destination Confirmation forms to demonstrate due diligence and compliance with OFAC. Agencies that maintain a self-service application for their payees’ direct deposit information must address the requirements of this confirmation form within the self-service application. Agencies must be prepared to provide documentation of the payee’s payment destination confirmation upon request, or during a post-payment audit.
IAT Indicator Field
Once the confirmation form is received, or your agency’s self-service application is updated, and the payee confirms that 100 percent of the direct deposit payments are destined outside the United States, update TINS as follows:
|If …||and …||then …|
|Your agency updates TINS via online||It is a new payee setup||Enter Y in the
|Your agency updates TINS via online||It is an established payee||Enter Y in the
|Your agency updates TINS via batch||See the file layout for Master Level Setups or Changes.|
Each agency is responsible for maintaining the
IAT IND field for its payees and ensuring there is no indication that payees intend to transfer direct deposit payments outside the United States. If there is any doubt, the agency should contact the payee before setting up direct deposit information to ensure that the agency’s payments will remain in the United States.
All paying agencies must monitor the
IAT IND field in TINS. If a Y is displayed, agencies should contact the payee to confirm the payment destination. If an international payment destination is confirmed, the payee must not be set up for direct deposit.