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Page Title: Chapter 5 Foreign Currency
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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? 5-1

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