Foreign Payments

1
Foreign Payments

• By Heather Flanagan
• NOAA Finance Office, 20020 Century Blvd.,
  Germantown, MD 20874
• Phone [phone], Fax [phone]

2
Payment Types

• US Dollar
• Check
• Treasury
• Name Only
• EFT Electronic Funds Transfer

• Foreign currency
• Check
• EFT Electronic Funds Transfer

3
US Currency
4
US Currency Options

• Treasury Check Treasury will send the check to
  the vendors 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.

5
Treasury Checks
6
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

7
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 countrys 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.

8
What does Finance need to process Treasury Checks?

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

9
At a glanceTreasury 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

10
Name Only Checks
11
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.

12
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.

13
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

14
At a glanceName Only Checks

• PROS
• Hard copy of check
• FedEx will track the shipment of the check

• CONS
• Expense
• Human Error
• Can they cash it?
• Unreliable

15
US Dollar Wires (EFT)
16
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

17
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

18
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

19
What Foreign Bankinformation 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)

20
What is an Intermediary Bank?

• An Intermediary bank is a US bank which can
  transfer US funds to the Vendors 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 Vendors bank must have a branch in the US.
  False
• So, how do you know which US bank to use?
• Hint See the next slide

21
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

22
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?

23
Foreign Currency
24
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.

25
Foreign Currency Check
26
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.

27
Why should I sendForeign 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

28
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 US25,000 to the meeting. We cannot
  accurately convert the funds.
• Our funds must be flexible for currency
  fluctuation.

29
What does Finance needto 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.

30
At a glance.Foreign Currency Checks

• PROS
• Customer Service
• Other exceptions

• CONS
• Unable to convert US funds

31
Foreign Currency Wires (EFT)
32
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

33
Why not a Foreign Currency Wire?

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

34
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!

35
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?

36
Summary on Vendor Services

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

37
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.