So how are your shops handling incoming IAT transactions? Do you perform the OFAC scrubs and resolve potential hits before posting the entry to the receiver's account? We just got our first IAT and our core system's process/reports did not work as we had thought they would. Basically, no one did an OFAC search yet and the transaction posted to the customer's account. I can't see that its a good practice to post the transaction before we know if it's a possible OFAC hit.

Our Core Processor will perform the OFAC search and report to us any suspects. We have 24 hours to clear the suspect before the transaction is returned.

So is the IAT posted to the customer's account (i.e. - available for their use in the case of credits) during the 24 hours that you do research before having to return. We pull our ACH files in first thing in the morning and the transactions don't post until evening. Should we be doing the OFAC scrub and research during that period of time so the customer doesn't actually have access to the funds if we need to do any blocking/freezing?

There is no posting of funds until we clear the suspect. The funds are not posted to the account, they are held in a suspense account within Core system. If does not get processes until we clear it.

Okay, that's how I was thinking it should work. Thanks for sharing you procedures!