# Presentation: 723322

## Foreign Payments

- By: Heather Flanagan
- NOAA Finance Office, 20020 Century Blvd., Germantown, MD 20874
- Phone 301-444-2786, Fax 301-427-2025

## Payment Types

**US Dollar**
- Check
- Treasury
- Name Only
- EFT – Electronic Funds Transfer

**Foreign currency**
- Check
- EFT – Electronic Funds Transfer

- Heather Flanagan NOAA AOD HQTR October 2003

## US Currency

## US Currency Options 

_**Treasury Check**_ –Treasury will send the check to the vendor’s address in CAMS which is obtained from the Vendor Profile form.
_**Name Only Check**_ - Treasury will send the check to Finance  HQTR for Finance to send to either the Line Office or directly to the vendor via FedEx.
_**US Dollar Wires**_ – We pay the vendor via bank wires to their bank.
- Can be either a wire to a foreign bank or US Bank.

- Heather Flanagan NOAA AOD HQTR October 2003

## Treasury Checks

## Why should I send a Treasury Check?

**No rush for payment to reach vendor**
**The vendor does not have a bank account**
**Every ASC can process this payment type**

- Heather Flanagan NOAA AOD HQTR October 2003

## Why Not Treasury Checks?

_**Tracking problems**_ -  There is NO WAY TO TRACK once the check has left the Treasury until the vendor cashes it.
_**Will it arrive safely?**_ Many country’s mail systems are inept and unreliable.
_**It takes too long.**_  Treasury will send the check to the foreign country via regular mail.  This may take weeks depending on the location of the vendor.
_**Can they cash a US$ check?**_ It is difficult for some foreign vendors to cash a US $ check in their country.
_**Human Error**_ – Checks get lost.
_**Unreliable**_ - Checks are one of the most common forms of payments that are returned and/or never cashed.

- Heather Flanagan NOAA AOD HQTR October 2003

## What does Finance need to process Treasury Checks?

_**Vendor Profile Form**_  - Accurate name/address of vendor who will cash the check.

- Heather Flanagan NOAA AOD HQTR October 2003

## At a glance...Treasury Checks

_**PROS**_
- No rush for payment to reach vendor
- No bank account for vendor
- Every ASC can process this payment

_**CONS**_
- Tracking Problems
- Will it arrive safely?
- It takes too long.
- Can they cash it?
- Human error
- Unreliable

- Heather Flanagan NOAA AOD HQTR October 2003

## Name Only Checks

## Why should I send a Name Only Check?

_**Hard Copy**_ - The check is received by Finance directly from the US Treasury, allowing us a copy of the check.
_**Track shipping**_ - FedEx will track the shipment of the check and is faster than regular mail.

- Heather Flanagan NOAA AOD HQTR October 2003

## Why Not Name Only Checks?

_**Expense**_  – Did you know it costs approx. $83.00 to process a Name Only check?
- 	(not to mention all the FedEx fees which can be greater than $50)
_**Human Error**_ - Checks get lost.
_**Can they cash a US$ check?**_ It is difficult for some foreign vendors to cash a US $ check.
_**Unreliable**_ - Checks are one of the most common forms of payments that are returned and/or never cashed.

- Heather Flanagan NOAA AOD HQTR October 2003

## What does Finance need to process Name Only Checks?

_**Vendor Profile Form**_  - Accurate name/address of vendor who will cash the check.
_**Mailing information**_ – Where would you like Finance to send the check?
- To the Line Office
- To the Vendor

- Heather Flanagan NOAA AOD HQTR October 2003

## At a glance...Name Only Checks

_**PROS**_
- Hard copy of check
- FedEx will track the shipment of the check

_**CONS**_
- Expense
- Human Error
- Can they cash it?
- Unreliable

- Heather Flanagan NOAA AOD HQTR October 2003

## US Dollar Wires (EFT)

## Why Use US Dollar Wires (EFT)?

- They are easy to track.
- There is an electronic paper trail
- They are quick to process
- Payments are received in only a few days
- Every ASC can make US Dollar payments to foreign vendors.
- US accounts are made by CAMS
- Foreign accounts are made manually by Finance

- Heather Flanagan NOAA AOD HQTR October 2003

## Why not a US Dollar Wires (EFT)?

- Did you know it costs only $0.02 to process an EFT?
- There are extra steps needed to obtain banking information for these transfers.
- The only reason you would object to this type of payment is due to a currency issue.
- The vendor does not want US Currency

- Heather Flanagan NOAA AOD HQTR October 2003

## What does Finance need for US Dollar Wires (EFT)?

- If payment is a US Bank you must obtain:
- Bank Name
- Account Name/Number
- ABA#
- All banking information must be provided directly from the vendor
- Email from Vendor
- Vendor profile form
- Invoice from vendor
- If payment is made to a foreign bank, there is additional information you _**MUST**_ have in order to process these payments!!!
- Foreign Bank Information
- US Intermediary Bank

- Heather Flanagan NOAA AOD HQTR October 2003

## What Foreign Bankinformation is needed to process a US Dollar Wire?

- Full address of the bank
- Name on the bank account
- Account #
- Swift Code – similar to the US ABA# but has letters/numbers and varies in length.
- You still need Intermediary Bank information for
- US Dollar Wires (EFT)

- Heather Flanagan NOAA AOD HQTR October 2003

## What is an Intermediary Bank?

- An Intermediary bank is a US bank which can transfer US funds to the Vendor’s bank.
- Each foreign bank has different US banks they may use.
- Myths about Intermediary Banks:
- The Vendor must have a bank in the US - False
- The Vendor must have an account with this bank. -False
- The Vendor’s bank must have a branch in the US. – False
- So, how do you know which US bank to use?
- Hint: See the next slide

- Heather Flanagan NOAA AOD HQTR October 2003

## Where do you get the Intermediary Bank information?

_**The vendor needs to call their bank and **_
_**Ask 3 simple questions:**_
- What US Bank do you accept US funds from?
- 		Bank of America, Standard Chartered Bank, JP Morgan, etc.
- 2.	What is the City/State of this bank?
- 		99.9% are NY/ NY
- 3.	What is the 9 digit ABA # for this bank?
- 		All numbers, no letters

- Heather Flanagan NOAA AOD HQTR October 2003

## At a glance....US Dollar Wires (EFT)

_**PROS**_
- Easy to track
- Quick to process
- Receipt of payments is only a few days
- Every ASC can make this type of payment

_**CONS**_
- There are extra steps required to obtain additional banking information.
- Is there a currency issue for the vendor?

- Heather Flanagan NOAA AOD HQTR October 2003

## Foreign Currency

## Foreign Currency Options

_**Foreign Currency Check**_ –The check is issued by the “nearest” State Department and sent to the Embassy closest to the vendor.
_**Foreign Currency Wire**_ – We pay the vendor via bank wire to their bank
- This is a wire transfer directly to a foreign bank in foreign currency.

- Heather Flanagan NOAA AOD HQTR October 2003

## Foreign Currency Check

## Foreign Currency Checks

_**3 Step process**_
- The US Treasury will send the foreign currency information to a “local” State Department who issues the check.
- The check is sent to the Embassy closest to the vendor.
- The Embassy will mail the check to the vendor.

- Heather Flanagan NOAA AOD HQTR October 2003

## Why should I sendForeign Currency Checks?

- Customer Service
- The vendor requests a check payment
- The vendor requests foreign currency
- Other exceptions
- Countries will not allow the US to send a wire
- US currency is not allowed in some countries
- NO OTHER OPTION FOR PAYMENT

- Heather Flanagan NOAA AOD HQTR October 2003

## Why Not  Foreign Currency Check?

- We are unable to convert US funds into a foreign currency check.
- We must have a foreign currency amount in order to use this payment type.
- If we are supporting a meeting and will contribute US$25,000 to the meeting.  We cannot accurately convert the funds.
- Our funds **must** be flexible for currency fluctuation.

- Heather Flanagan NOAA AOD HQTR October 2003

## What does Finance needto process Foreign Currency Checks?

_**Vendor Profile Form**_  accurate address/name of vendor who will cash the check is a must.
- A specific amount of foreign currency and type of currency to use!!!
- We cannot convert US funds.

- Heather Flanagan NOAA AOD HQTR October 2003

## At a glance....Foreign Currency Checks

_**PROS**_
- Customer Service
- Other exceptions

_**CONS**_
- Unable to convert US funds

- Heather Flanagan NOAA AOD HQTR October 2003

## Foreign Currency Wires (EFT)

## Why should I send Foreign Currency Wires (EFT)?

- They are easy to track.
- They are easiest for our vendors
- They are quick to process
- Payments are received within 3-5 days

- Heather Flanagan NOAA AOD HQTR October 2003

## Why not a Foreign Currency Wire?

- There really is no reason to object unless the vendor prefers to receive US currency.

- Heather Flanagan NOAA AOD HQTR October 2003

## What does Finance need for Foreign Currency Wires?

_**Vendor Profile Form**_
- Full address of the bank
- Name on the bank account
- Account #
- Swift Code – similar to the US ABA# but has letters/numbers and varies in length.

- The specific type of foreign currency!

- Heather Flanagan NOAA AOD HQTR October 2003

## At a glance....Foreign Currency Wires

_**PROS**_
- Easy to track
- Easy for our vendors
- Quick to process
- Quick receipt of payment

_**CONS**_
- Is there a currency issue for the vendor?

- Heather Flanagan NOAA AOD HQTR October 2003

## Summary on Vendor Services 

- Make it easy for our vendors.
- a.	See which way is easiest for our vendor’s to receive funds.
- See which way is quickest for our vendors to receive funds.
- 2.	Focus on Customer Service.

- Heather Flanagan NOAA AOD HQTR October 2003

## Summary for NOAA

- What is the most reliable way for NOAA to send funds?
- What is the cheapest way for NOAA to send funds?
- What can NOAA do to satisfy our customers?
- Create an assurance with our international vendors that NOAA is reputable and is working to create better payment services for them.

- Heather Flanagan NOAA AOD HQTR October 2003