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Mon, Mar 10, 2014

Washington, District Of Columbia

These changes to the NACHA Operating Rules regarding the ODFI’s warranty with respect to Outbound IAT Entries are effective on March 15, 2013. Rules sections impacted by these changes appear below and reflect updated language:

Article Two – Rights and Responsibilities of ODFIs, Their Originators, and Third-Party Senders

Subsection Additional ODFI Warranties for Outbound IAT Entries

In addition to the other warranties contained within these Rules, an ODFI initiating an Outbound IAT Entry warrants to each RDFI, ACH Operator, and Gateway:

(a) Compliance with U.S. Legal Requirements. The Originator and ODFI are in compliance with U.S. Legal Requirements with respect to the IAT Entry, including their obligations under programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN).

(b) Compliance with Foreign Laws or Payment System Rules Regarding Authorization. If the laws or payment system rules of the receiving country require authorization with respect to an IAT Entry, the ODFI warrants that the authorization of the IAT Entry complies with the laws and payment system rules of the receiving country.

Subsection Assumption of Risk (new subsection)

As between the ODFI and the Gateway of an Outbound IAT Entry, the ODFI bears the risk that the laws of the receiving country prohibit or otherwise preclude the processing, settlement, or transfer of the proceeds of the Entry, including through blocking or other sequestration or seizure of funds, unless otherwise agreed between the Gateway and the ODFI. As between the Originator and the ODFI, the Originator bears all such risk, unless otherwise agreed between the Originator and the ODFI or required by Legal Requirements.

Source: NACHA