## Section B. Awards to Foreign Resident Beneficiaries

#### Overview

+------------+---------------------------------------------------------+
| #          | > This section contains the following topics:           |
| #### In th |                                                         |
| is Section |                                                         |
+------------+---------------------------------------------------------+

  ------------ ---------------------------------------------- ------------
  Topic        Topic Name                                     See Page

  4            General Information on Awards to Foreign       3-B-2
               Resident Beneficiaries                         

  5            Services Offered by the Department of State    3-B-4

  6            Developing and Authorizing Claims Filed by     3-B-5
               Foreign Resident Claimants                     

  7            Discontinuing Awards to Foreign Resident       3-B-6
               Beneficiaries                                  

  8            Releasing Withheld Funds and Resuming a        3-B-8
               Discontinued Award                             
  ------------ ---------------------------------------------- ------------

#### 4. General Information on Awards to Foreign Resident Beneficiaries

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains general information on awards to  |
| troduction | > foreign resident beneficiaries, including             |
|            |                                                         |
|            | -   the prohibition on the release of checks            |
|            |                                                         |
|            | -   the Department of Treasury listed countries         |
|            |                                                         |
|            | -   corresponding with claimants in listed countries    |
|            |                                                         |
|            | -   the special account, and                            |
|            |                                                         |
|            | -   what happened to awards when the existence of the   |
|            |     beneficiary could not be established.               |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > August 14, 2006                                       |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #          | > [31 U.S.C.                                            |
| #### a. Pr | > 3329](http://straylight.law.cornell.edu               |
| ohibition  | /uscode/html/uscode31/usc_sec_31_00003329----000-.html) |
| on Release | > prohibits the release of checks to persons who live   |
|  of Checks | > in a foreign country if the Secretary of the Treasury |
|            | > decides that local conditions in the foreign country  |
|            | > do not reasonably ensure that the payee will          |
|            |                                                         |
|            | -   receive the check, or                               |
|            |                                                         |
|            | -   be able to negotiate a check for full value.        |
|            |                                                         |
|            | > ***Note***: The Department of Veterans Affairs (VA)   |
|            | > may develop and authorize claims filed by residents   |
|            | > of listed countries, except by citizens of the U.S.   |
|            | >                                                       |
|            | > ***References***: For more information on             |
|            |                                                         |
|            | -   listed countries, see M21-1MR, Part III, Subpart    |
|            |     vi, 3.B.4.b, and                                    |
|            |                                                         |
|            | -   development and authorization of claims filed by    |
|            |     residents in listed countries, see M21-1MR, Part    |
|            |     III, Subpart vi, 3.B.6.                             |
+------------+---------------------------------------------------------+

Continued on next page

4\. General Information on Awards to Foreign Resident Beneficiaries,
Continued

+------------+---------------------------------------------------------+
| ##### b.   | > The Department of Treasury list of countries to which |
|  Departmen | > the prohibition against delivery of checks currently  |
| t of Treas | > applies are                                           |
| ury Listed |                                                         |
|  Countries | -   Democratic People's Republic of Korea (North        |
|            |     Korea), and                                         |
|            |                                                         |
|            | -   Republic of Cuba (Cuba).                            |
|            |                                                         |
|            | > ***Note***: The Department of State does *not*        |
|            | > maintain offices in the countries listed above.       |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### c    | > Although sending checks to listed countries is        |
| . Correspo | > prohibited, correspondence may be sent to claimants   |
| nding With | > living in listed foreign countries; however, there is |
|  Claimants | > reasonable doubt that the individual will receive the |
|  in Listed | > mail.                                                 |
|  Countries | >                                                       |
|            | > In correspondence outside VA, do *not* use the term   |
|            | > "blocked countries." Instead, say "listed countries." |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | > [31 U.S.C.                                            |
| # d. Speci | > 3329(b)(4)](http://straylight.law.cornell.edu         |
| al Account | /uscode/html/uscode31/usc_sec_31_00003329----000-.html) |
|            | > provides for a special account called "*Secretary of  |
|            | > the Treasury, Withheld Foreign Checks,*" which was    |
|            | > established to preserve the rights of                 |
|            |                                                         |
|            | -   persons to whom awards had been made before October |
|            |     9, 1940 (when the law prohibiting payments to       |
|            |     listed countries was enacted), and                  |
|            |                                                         |
|            | -   those subsequently taking residence in listed       |
|            |     countries.                                          |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### e.   | > If the continued existence of the beneficiary could   |
| Existence  | > not be established, although basic entitlement to VA  |
| of Benefic | > benefits was not terminated, awards to persons living |
| iary Not E | > in listed countries were discontinued for the reason  |
| stablished | > "*VA prevented from obtaining necessary evidence*."   |
|            | > This prevented any further accumulations in the       |
|            | > special deposit account.                              |
+------------+---------------------------------------------------------+

#### 5. Services Offered by the Department of State

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on the services       |
| troduction | > offered by the Department of State, including         |
|            |                                                         |
|            | -   expenses for services offered by the Department of  |
|            |     State, and                                          |
|            |                                                         |
|            | -   the services offered by consular officers.          |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > August 14, 2006                                       |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > Services by the Department of State through consular  |
|  a. Expens | > officers at U.S. Embassies and consulates, including  |
| es for Ser | > investigations in foreign countries, generally are    |
| vices Offe | > without cost to VA.                                   |
| red by the |                                                         |
|  Departmen |                                                         |
| t of State |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > The consular officers at U.S. Embassies and           |
| b. Service | > consulates offer the services listed below:           |
| s Offered  |                                                         |
| by Consula | -   Furnish general information and assistance,         |
| r Officers |     including assistance to claimants, beneficiaries,   |
|            |     and apportionees in the preparation of applications |
|            |     for benefits.                                       |
|            |                                                         |
|            | -   Inspect and approve institutions for pursuit of     |
|            |     courses of instruction by children between the ages |
|            |     of 18 and 23.                                       |
|            |                                                         |
|            | -   If requested by VA, investigate and develop claims. |
|            |                                                         |
|            | -   Administer oaths for VA purposes.                   |
|            |                                                         |
|            | -   Take action as requested by the Under Secretary for |
|            |     Benefits or designee on matters involving           |
|            |     guardianship.                                       |
|            |                                                         |
|            | -   Make arrangements for physical examinations as      |
|            |     requested by the appropriate VA regional office     |
|            |     (RO).                                               |
+------------+---------------------------------------------------------+

#### 6. Developing and Authorizing Claims Filed by Foreign Resident Claimants

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information developing and        |
| troduction | > authorizing claims filed by foreign resident          |
|            | > claimants, including                                  |
|            |                                                         |
|            | -   when to develop and authorize claims from foreign   |
|            |     residents, and                                      |
|            |                                                         |
|            | -   when *not* to develop and authorize claims from     |
|            |     foreign residents.                                  |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > August 14, 2006                                       |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a.   | > Develop and authorize an original or reopened claim   |
|  When to D | > for a claimant residing in a listed country only when |
| evelop and | > the claimant, on his/her own initiative,              |
|  Authorize |                                                         |
|  Claims Fr | -   requests that benefit checks show a U.S. Foreign    |
| om Foreign |     Service post address in an *unlisted* country       |
|  Residents |                                                         |
|            | -   specifies the U.S. Foreign Service post address to  |
|            |     which the checks are to be forwarded, and           |
|            |                                                         |
|            | -   indicates that he/she will take delivery at that    |
|            |     U.S. Foreign Service post in person.                |
|            |                                                         |
|            | > ***Note***: Limit claims development for countries    |
|            | > without Department of State offices to direct         |
|            | > correspondence with the claimant.                     |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > Deny original and reopened claims filed by claimants  |
| ### b. Whe | > residing in listed countries without further          |
| n Not to D | > development as provided in [38 CFR                    |
| evelop and | > 3.653(c)](htt                                         |
|  Authorize | p://warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_653.DOC) |
|  Claims Fr | > when                                                  |
| om Foreign |                                                         |
|  Residents | -   the claimant fails to provide a request to deliver  |
|            |     the check to a U.S. Foreign Service post address in |
|            |     an unlisted country, and/or                         |
|            |                                                         |
|            | -   full development of the case requires the services  |
|            |     of the Department of State.                         |
+------------+---------------------------------------------------------+

#### 7. Discontinuing Awards to Foreign Resident Beneficiaries

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on discontinuing      |
| troduction | > awards to foreign resident beneficiaries, including   |
|            |                                                         |
|            | -   notification by the Department of Treasury          |
|            |                                                         |
|            | -   handling adjustments for returned checks, and       |
|            |                                                         |
|            | -   adjusting awards to beneficiaries                   |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   affected by termination of payment, and             |
|            |                                                         |
|            | -   when dependents reside in listed countries.         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > August 14, 2006                                       |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > The Department of Treasury returns checks for         |
| ### a. Not | > pension, compensation, or Dependency and Indemnity    |
| ification  | > Compensation (DIC) to VA for cancellation when        |
| by the Dep | > beneficiaries reside in countries that have been      |
| artment of | > added to the Department of Treasury list.             |
|  Treasury  | >                                                       |
|            | > *VA Form 20-6560*, *Notice of Benefit Payment         |
|            | > Transaction,* is received in each case under message  |
|            | > code 611, ACCOUNT SUSPENDED---CHECK                   |
|            | > RETURNED---NONENTITLEMENT.                            |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### b.   | > If the returned check is a regular monthly check and  |
| Handling A |                                                         |
| djustments | -   does *not* include adjustments for periods prior to |
|  for Retur |     the month for which it was issued, then discontinue |
| ned Checks |     the award effective the date of the last payment,   |
|            |     or                                                  |
|            |                                                         |
|            | -   includes adjustment payments for periods prior to   |
|            |     the month of issuance, then adjust/reduce and       |
|            |     discontinue the award so as to cancel the           |
|            |     retroactive adjustment.                             |
|            |                                                         |
|            | > ***Note***: In both situations above, use reason code |
|            | > 29 (Other) "*Payee residing in a listed country* --   |
|            | > *38 CFR 3.653*."                                      |
+------------+---------------------------------------------------------+

Continued on next page

7\. Discontinuing Awards to Foreign Resident Beneficiaries, Continued

+------------+---------------------------------------------------------+
| ##### c    | > If the rate payable to another person, such as a      |
| . Adjustin | > dependent or an apportionee, is affected by           |
| g Awards t | > termination of payments, then                         |
| o Benefici |                                                         |
| aries Affe | -   adjust the award(s) under end product (EP) 130      |
| cted by Te |                                                         |
| rmination  | ```{=html}                                              |
| of Payment | <!-- -->                                                |
|            | ```                                                     |
|            | -   as if the person residing in the listed country     |
|            |     were deceased, and                                  |
|            |                                                         |
|            | -   effective from the date of last payment on the      |
|            |     terminated award, and                               |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   use reason code 29 (Other) "Payee residing in a     |
|            |     listed country--38 CFR 3.653."                      |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > If the beneficiary resides in an unlisted country and |
|  d. Adjust | > is receiving additional compensation, pension, or     |
| ing Awards | > increased pension because of a dependent who is or    |
|  to Benefi | > becomes a resident of a listed country, then          |
| ciaries Wh |                                                         |
| en Depende | -   exclude the dependent effective from the date of    |
| nts Reside |     last payment, and                                   |
|  in Listed |                                                         |
|  Countries | -   reduce or terminate the beneficiary's award         |
|            |     accordingly.                                        |
|            |                                                         |
|            | > ***Note***: If the beneficiary's award is apportioned |
|            | > or apportionable, see M21-1MR, Part III, Subpart v,   |
|            | > 3.C.9.                                                |
+------------+---------------------------------------------------------+

#### 8. Releasing Withheld Funds and Resuming a Discontinued Award

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on                    |
| troduction |                                                         |
|            | -   the requirements for releasing withheld funds and   |
|            |     resuming discontinued awards                        |
|            |                                                         |
|            | -   releasing withheld funds                            |
|            |                                                         |
|            | -   resuming a discontinued award                       |
|            |                                                         |
|            | -   resuming an award when the existence of the         |
|            |     beneficiary could not be established                |
|            |                                                         |
|            | -   developing for eligibility                          |
|            |                                                         |
|            | -   release of funds, and                               |
|            |                                                         |
|            | -   deceased beneficiaries.                             |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > August 14, 2006                                       |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ###        | > Release withheld funds or resume a discontinued award |
| ## a. Requ | > if                                                    |
| irements f |                                                         |
| or Releasi | -   the country is removed from the Department of       |
| ng Withhel |     Treasury list                                       |
| d Funds an |                                                         |
| d Resuming | -   the beneficiary establishes residence in an         |
|  Discontin |     unlisted country, or                                |
| ued Awards |                                                         |
|            | -   the beneficiary has requested reopened award checks |
|            |     be mailed to him/her in care of a U.S. Foreign      |
|            |     Service post in an unlisted country.                |
|            |                                                         |
|            | > ***References***: For more information on             |
|            |                                                         |
|            | -   the release of frozen funds, see [38 CFR            |
|            |     3.653](http                                         |
|            | ://warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_653.DOC), |
|            |     and                                                 |
|            |                                                         |
|            | -   providing awards to residents in listed countries   |
|            |     using a U.S. Foreign Service post, see M21-1MR,     |
|            |     Part III, Subpart vi, 3.B.8.b.                      |
+------------+---------------------------------------------------------+

Continued on next page

8\. Releasing Withheld Funds and Resuming a Discontinued Award,
Continued

+------------+---------------------------------------------------------+
| ###        | > Release pension and compensation payments formerly    |
| ## b. Rele | > deposited in the special account                      |
| asing With |                                                         |
| held Funds | -   when identified as such in the claims folder        |
|            |                                                         |
|            | -   on receipt of a claim, and                          |
|            |                                                         |
|            | -   on the furnishing of a loyalty clearance, if        |
|            |     required by M21-1MR, Part III, Subpart iii, 1.C.18. |
|            |                                                         |
|            | > ***Notes***:                                          |
|            |                                                         |
|            | -   Payment will be made from the Compensation and      |
|            |     Pension appropriation, 36XO102.                     |
|            |                                                         |
|            | -   There is no time limit for the filing of a claim by |
|            |     the veteran or dependent beneficiary. However,      |
|            |     evidence of continued entitlement must be submitted |
|            |     within one year from the date of request.           |
|            |                                                         |
|            | -   ***Reference***: For more information on payment of |
|            |     withheld funds as accrued benefits, see M21-1MR,    |
|            |     Part VIII, 4.11.                                    |
+------------+---------------------------------------------------------+

Continued on next page

8\. Releasing Withheld Funds and Resuming a Discontinued Award,
Continued

+------------+---------------------------------------------------------+
| ##### c.   | > If an award was discontinued for the reason(s) "*VA   |
|  Resuming  | > prevented from obtaining necessary evidence*" or      |
| a Disconti | > "*Payee residing in a listed country*," pay the       |
| nued Award | > amount otherwise payable to the beneficiary effective |
|            | > from the date of discontinuance.                      |
|            | >                                                       |
|            | > ***Notes***:                                          |
|            |                                                         |
|            | -   Payment is subject to proof of entitlement over the |
|            |     intervening period.                                 |
|            |                                                         |
|            | -   There is no time limit for the filing of a claim by |
|            |     the veteran or dependent beneficiary. However,      |
|            |     evidence of continued entitlement must be submitted |
|            |     within one year from the date of request.           |
|            |                                                         |
|            | > ***References***: For more information on             |
|            |                                                         |
|            | -   retroactive payments, see [38 CFR                   |
|            |     3.653(c)(3)](http                                   |
|            | ://warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_653.DOC), |
|            |     and                                                 |
|            |                                                         |
|            | -   developing for eligibility for the resumed award,   |
|            |     see M21-1MR, Part III, Subpart vi, 3.B.8.e.         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #          | > If payments were *not* made solely because the        |
| #### d. Re | > continued existence of the beneficiary was not        |
| suming an  | > established, apply [38 CFR                            |
| Award When | > 3.158(c)](http                                        |
|  Existence | ://warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_158.DOC), |
|  of Benefi | > concerning whereabouts previously unknown.            |
| ciary Coul | >                                                       |
| d Not be E | > The effective date of the reopened award under [38    |
| stablished | > CFR                                                   |
|            | > 3.158(c)](htt                                         |
|            | p://warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_158.DOC) |
|            | > is governed by [38 CFR                                |
|            | > 3.114(a)](http                                        |
|            | ://warms.vba.va.gov/regs/38CFR/BOOKB/PART3/S3_114.DOC). |
|            | > However, the effective date cannot be prior to        |
|            | > December 1, 1962.                                     |
|            | >                                                       |
|            | > ***Reference***: For more information on the          |
|            | > continued existence of a beneficiary that has not     |
|            | > been established, see M21-1MR, Part III, Subpart vi,  |
|            | > 3.B.4.e.                                              |
+------------+---------------------------------------------------------+

Continued on next page

8\. Releasing Withheld Funds and Resuming a Discontinued Award,
Continued

+------------+---------------------------------------------------------+
| #####      | > Develop the claim to determine the beneficiary's      |
|  e. Develo | > eligibility, including proof of identity, when        |
| ping for E | > releasing withheld funds or resuming a discontinued   |
| ligibility | > award. Development includes                           |
|            |                                                         |
|            | -   requesting *VA Form 21-508* (*372*) from the        |
|            |     beneficiary (***Important***: *VA Form 21-508*      |
|            |     (*372*) must be executed before a diplomatic or     |
|            |     consular officer of the U.S. and duly authenticated |
|            |     by him/her.)                                        |
|            |                                                         |
|            | -   obtaining loyalty clearance if required by M21-1MR, |
|            |     Part III, Subpart iii, 1.C.18, and                  |
|            |                                                         |
|            | -   notifying the beneficiary of his/her right to elect |
|            |     the following:                                      |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   Improved Pension in Section 306 and Old Law         |
|            |     disability and death pension cases, and             |
|            |                                                         |
|            | -   DIC in death compensation cases.                    |
|            |                                                         |
|            | > Reinstate the benefit when development indicates that |
|            | > eligibility may be reestablished.                     |
|            | >                                                       |
|            | > ***Note***: Proof of identity must be acceptable to   |
|            | > the Department of State authorities in the country    |
|            | > removed from the Department of Treasury list.         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | > To release withheld funds, prepare                    |
| # f. Relea |                                                         |
| se of With | -   a one-time payment to release funds for the         |
| held Funds |     retroactive part of the award, and                  |
|            |                                                         |
|            | -   a second award processed in the normal manner to    |
|            |     resume payments from the final date through which   |
|            |     payment was withheld.                               |
+------------+---------------------------------------------------------+

Continued on next page

8\. Releasing Withheld Funds and Resuming a Discontinued Award,
Continued

+------------+---------------------------------------------------------+
| #          | > In some situations, information in the claims folder  |
| #### g. De | > indicates that                                        |
| ceased Ben |                                                         |
| eficiaries | -   the beneficiary is deceased, and                    |
|            |                                                         |
|            | -   a claim for accrued benefits has not been filed     |
|            |     within one year after the reported date of death.   |
|            |                                                         |
|            | > In this situation, notify the finance activity        |
|            | > stating that the amount withheld is not payable to    |
|            | > any living person.                                    |
+------------+---------------------------------------------------------+

####