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CHAPTER 5
FOREIGN CURRENCY
Normally, a disbursing officer (DO) uses United
States dollars to pay U.S. military and civilian personnel
assigned overseas.
However, a DO’s use of United
States currency in an overseas or other special foreign
location is not automatic. It is subject to strict monetary
control regulations based on various diplomatic or
financial relations between our government and the
foreign country involved.
As a senior Disbursing Clerk (DK), you may find
yourself assigned to a disbursing unit located in a
foreign country.
You may become involved in the
exchange of U.S. dollars and local foreign currency.
Like all other disbursing personnel operating in
overseas units or other special foreign locations, you
must be aware of the specific monetary control
regulations associated with your location.
The first step is for your command to contact the
local Department of State representatives concerning
the foreign currency control regulations of that country.
The next step is for your command to issue instructions
to conform with the local procedures and regulations
for that area. These instructions will include the
guidelines that you and other command disbursing
personnel must use to manage the exchange of U.S.
dollars and local foreign currency. You will need to
follow these guidelines carefully to carry out your
responsibilities to help your DO support the financial
obligations of the command or unit.
The Department of Defense Financial
Management Regulation (DODFMR), Volume 5, sets
forth complete and explicit instructions for the
procurement, use, and disposition of foreign currencies.
This chapter is just an overview of some of this
information. It briefly discusses the regulations and
guidelines disbursing personnel must use to procure,
manage, handle, and dispose of foreign currency and
the associated negotiable instruments. After reading
the information in this chapter, you should be able to
determine the general rules, regulations, and procedures
the DOs of various afloat and ashore units must follow
for the procurement, exchange, handling, disbursement,
and disposal of foreign currency and negotiable
instruments required to support disbursing operations
at their activities. Remember, this chapter is intended
only to be an overview. If you are dealing with foreign
currency, do not use this chapter or any other part of this
TRAMAN as an operations manual. For official
information, always consult the DODFMR, Volume 5.
PROCUREMENT OF FOREIGN
CURRENCY
In nearly all international financial transactions, the
U.S. dollar is the preferred currency. By far, the best
situation is when the DO assigned to your overseas or
foreign unit can complete a transaction by using U.S.
Government-owned excess or near excess currency.
In this chapter, you will frequently encounter the
terms excess currencies and near excess currencies.
Both terms refer to U.S.-owned foreign currencies.
Excess currencies are defined as U.S.-owned foreign
currencies that the Department of the Treasury has
determined to be in excess of the probable requirements
of U.S. Government activities located overseas. Near
excess currencies are U.S.-owned foreign currencies
that the Treasury has determined to be in excess of the
immediate requirements of these activities. When
excess or near excess currencies are not available, a DO
assigned to an overseas disbursing unit must procure the
necessary foreign currency.
AUTHORITY FOR PROCUREMENT
Before a DO can proceed to obtain foreign funds
for official purposes, he or she must be authorized in
writing by the commanding officer (CO) or some other
superior authority.
The DO retains the written
authorization in his or her retained files.
LIMITATIONS AND JUSTIFICATIONS
As previously stated, DOs of overseas units must
not acquire or hold foreign funds in excess of their
immediate disbursing requirements. What does this
mean? HOW does a DO determine his or her “immediate
disbursing requirements”? What conditions are
involved?
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