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Availability and Amounts of Foreign Funds
First, the availability of the foreign funds will
govern what amounts the DO may hold, and these
amounts are based on the following circumstances:
1. If the foreign funds are readily available, the
amount of funds should not exceed 2 or 3 days’
requirements.
2. If the foreign funds are not readily available, the
amount of funds should not exceed 7 days’
requirements.
3. Ships and mobile units visiting foreign ports for
periods of 7 days or less should purchase only the
amount expected to be needed for the port visit.
4. Ships or mobile units visiting foreign ports for
more than 7 days must comply with the provisions of
the first two conditions previously described.
Types of Currency
DOs will normally limit foreign funds to paper
currency.
Generally, a DO will avoid using foreign
coins because of the typical problems associated with
coins, such as weight, storage space, transportation, and
disposition. In fact, a DO will acquire foreign coins
only under special circumstances and usually
unintentionally.
Occasionally, a DO will acquire
foreign coins to fill a specific need. Usually, however,
a DO acquires foreign coins as change in connection
with an official cash payment in foreign funds.
RESPONSIBILITIES
Upon being authorized to procure and use foreign
currency, a DO undertakes special responsibilities.
Some of these include making sure the following
conditions exist or are enforced:
Foreign currency is obtained and used for
official purposes only.
Foreign currency is not purchased or held in
excess of immediate disbursing needs.
Foreign currency purchases with U.S. dollars are
made for “spot” delivery (delivery must be
within 2 business days).
Speculation in foreign currency is prohibited.
Foreign currency purchases are made from a
Military Banking Facility (MBF) whenever
possible.
A
When no MBF is available, foreign currency
purchases are made from U.S. DOs of the Navy,
Marine Corps, or other military services, or the
State Department or Treasury Department, if
possible.
Foreign currency purchases are made at the
prevailing rate.
Foreign currency collections are accompanied
by a written statement giving their source and
any restrictions on their use.
DO must carry out all these responsibilities
according to prevailing laws and monetary control
regulations associated with that specific overseas or
foreign location.
PROCUREMENT METHODS
A DO can obtain foreign currency by any of the
following methods:
Purchase with U.S. dollars, U.S. Treasury
checks, or other negotiable instruments payable
in U.S. dollars
Exchange of official collections or
reimbursements in foreign currency, or
negotiable instruments payable in foreign
currency, for U.S. dollars or negotiable
instruments payable in U.S. dollars
Purchase of drafts payable in foreign currency
for remitting payments to Navy creditors
SOURCES OF PROCUREMENT
To procure foreign funds, DOs should use the
following sources in the order of preference specified:
1. MBFs
2. Other U.S. Government sources
3. Commercial sources
The first choice is to procure foreign funds from an
MBF. When an MBF is not available, the DO should
try to use other available U.S. Government sources.
When MBFs and other U.S. Government sources are
not available, the DO should then try to obtain foreign
funds from commercial sources, but only as a last resort.
Let’s take a closer look at these sources.
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