Foreign Payments

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

2. US Dollar Check Treasury Name Only EFT – Electronic Funds Transfer Payment Types • Foreign currency • Check • EFT – Electronic Funds Transfer Heather Flanagan NOAA AOD HQTR October 2003

3. US Currency

4. 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

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 Heather Flanagan NOAA AOD HQTR October 2003

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 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 isdifficult 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

8. 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

9. 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 At a glance…Treasury Checks Heather Flanagan NOAA AOD HQTR October 2003

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. Heather Flanagan NOAA AOD HQTR October 2003

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 isdifficult 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

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 Heather Flanagan NOAA AOD HQTR October 2003

14. PROS Hard copy of check FedEx will track the shipment of the check CONS Expense Human Error Can they cash it? Unreliable At a glance…Name Only Checks Heather Flanagan NOAA AOD HQTR October 2003

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 Heather Flanagan NOAA AOD HQTR October 2003

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 Heather Flanagan NOAA AOD HQTR October 2003

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 Heather Flanagan NOAA AOD HQTR October 2003

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) Heather Flanagan NOAA AOD HQTR October 2003

20. 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

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 Heather Flanagan NOAA AOD HQTR October 2003

22. 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? At a glance….US Dollar Wires (EFT) Heather Flanagan NOAA AOD HQTR October 2003

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. Heather Flanagan NOAA AOD HQTR October 2003

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. Heather Flanagan NOAA AOD HQTR October 2003

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 Heather Flanagan NOAA AOD HQTR October 2003

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 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

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. Heather Flanagan NOAA AOD HQTR October 2003

30. PROS Customer Service Other exceptions CONS Unable to convert US funds At a glance….Foreign Currency Checks Heather Flanagan NOAA AOD HQTR October 2003

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 Heather Flanagan NOAA AOD HQTR October 2003

33. 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

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! Heather Flanagan NOAA AOD HQTR October 2003

35. PROS Easy to track Easy for our vendors Quick to process Quick receipt of payment CONS Is there a currency issue for the vendor? At a glance….Foreign Currency Wires Heather Flanagan NOAA AOD HQTR October 2003

36. 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

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. Heather Flanagan NOAA AOD HQTR October 2003