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From my experience in cross border payments, sanctions screening (Office of Foreign Asset Control - OFAC) is the most likely source of the problem. Most likely,

From my experience in cross border payments, sanctions screening (Office of Foreign Asset Control - OFAC) is the most likely source of the problem. Most likely, your customer's bank uses a US bank as a correspondent for all of their USD payments. The correspondent bank will scan every payment instruction that they receive against a list issued by OFAC. If there is a match, the correspondent bank will not execute the payment, and will seize the money from your customer's bank's account with the correspondent. In order to get the money un-seized, your customer will need to provide his bank with a lot of documentation proving that he is not the bad guy on the OFAC list. This can take a while. Your customer is probably aware of all of this and that is why he is not hassling you. So yes, the banking system did eat his money, but that is what it is designed to do.

wiredfool 4y ago
I had an OFAC compliance department hold up a wire from US->IRE because the bank it was going to (Permanent TSB) shared the suffix TSB with some Russian bank. There are 6 chartered banks in Ireland, but I had to dig out all sorts of info about the bank to prove that the Irish bank wasn't in Russia. I think it was 3 weeks or so to sort it out, when usually this is a nextish business day thing.
koreth1 4y ago
This was my guess as well. And based on my experience working on international payments, an additional headache is that in some cases, depending on exactly which jurisdictions are involved, some of the parties can be forbidden by law from giving you detailed information about what's happening. This is another "doing what it's designed to do" situation (the idea is to avoid revealing certain information to bad actors) but it can be pretty frustrating to deal with.
jjoonathan 4y ago
That sounds plausible. RF equipment moving around the world at a time of international tensions could very well draw this kind of attention. Historically I have seen it at customs, but in a world of increasingly non-tangible goods it probably makes sense to start going after payments instead. It would have been nice if I had heard this from the bank, but I understand that nobody involved considers it a high priority to keep me informed. Thanks for the theory!

wiredfool 4y ago

I had an OFAC compliance department hold up a wire from US->IRE because the bank it was going to (Permanent TSB) shared the suffix TSB with some Russian bank. There are 6 chartered banks in Ireland, but I had to dig out all sorts of info about the bank to prove that the Irish bank wasn't in Russia. I think it was 3 weeks or so to sort it out, when usually this is a nextish business day thing.

koreth1 4y ago

This was my guess as well. And based on my experience working on international payments, an additional headache is that in some cases, depending on exactly which jurisdictions are involved, some of the parties can be forbidden by law from giving you detailed information about what's happening. This is another "doing what it's designed to do" situation (the idea is to avoid revealing certain information to bad actors) but it can be pretty frustrating to deal with.

jjoonathan 4y ago

That sounds plausible. RF equipment moving around the world at a time of international tensions could very well draw this kind of attention. Historically I have seen it at customs, but in a world of increasingly non-tangible goods it probably makes sense to start going after payments instead. It would have been nice if I had heard this from the bank, but I understand that nobody involved considers it a high priority to keep me informed. Thanks for the theory!