The University is obligated to comply with the US Department of Treasury’s Office of Foreign Asset Control (OFAC) to ensure that our wire transfers and ACH payments (primarily outbound from the University) are not unknowingly funding SDNs (or Specially Designated Nationals and Blocked Persons). OFAC defines SDNs as “targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States”. A current list of SDN’s is here: http://www.ustreas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf.
In short, those requesting Wire Transfer payments (domestic or international) are asked to confirm that recipients of these funds (sent by the University) are not on the SDN list. The banks check this as well.
Those requesting ACH payments (domestic only) are asked to confirm that funds are staying within the domestic United States and will not have a final destination in another country. If these funds are headed outside the US, more information about the recipient is required.