March 10, 2009
The regulations of Treasury's Office of Foreign Assets Control (OFAC) generally define "property" as being anything of value and "property interests" as being direct, indirect, present, future, or contingent. OFAC has long been concerned about the possibility that incoming cross-border ACH debits might involve property or property interests of sanctions targets. In order to assure the smooth functioning of the ACH network, OFAC is authorizing institutions in the United States when they are acting as Originating Depository Financial Institutions/Gateway Operators (ODFI/GOs) for inbound International ACH debit Transactions (IAT debits) to reject transactions that appear to involve blockable property or property interests. The procedure will prevent funds from being transferred to sanctioned parties, provide OFAC with valuable information for analytical and enforcement purposes about targets and about those who may be engaging with them, assure that U.S. persons not facilitate transactions in which there is...
1) This Guidance appears to modify GEN-235613 (Nov 9, 2004), which is still on OFAC's interpretive ruling index.
The guidance appears to allow a certain set of U.S. persons to simply reject international transactions that the regulations would otherwise obligate them to block.
It is unclear what form the "authorization" referred to here took, i.e. whether OFAC separately issued a specific license to NACHA for use by all of its members, or the letter itself constituted a self-executing "authorization" of otherwise prohibited transactions. This would appear to be an example of a "correspondence authorization," permitting otherwise prohibited activities without the release of a formal specific license. Compare Case SH-98179b.
The fact that the letter has no case identifier suggests that it was an attachment to another letter and/or license that provides more...