UNCLASSIFIED (U)

7 FAM 520

DEPARTMENT OF THE TREASURY

(CT:CON-804; 04-30-2018)
(Office of Origin: CA/OCS)

7 FAM 521 INTRODUCTION

(CT:CON-678; 09-15-2016)

a. The Department of the Treasury is the financial agent for the U.S. Government and is responsible for the issuance of U.S. Government benefit payments certified by Federal benefit agencies to beneficiaries domestically and abroad. Payments are disbursed from the Treasurys Bureau of the Fiscal Service's National Payment Center All cancelled federal benefits checks should be returned to the following address:

b. For additional background regarding the Department of Treasury's Financial Management Service see:

c. Overseas, U.S. Government benefit programs are under the purview of the Program Management Office (CA/OCS/PMO), Directorate of Overseas Citizens Services in the Bureau of Consular Affairs. CA/OCS/PMO provides guidance, disseminates information and implements new procedures regarding the disbursement of federal benefits overseas. CA/OCS/PMO is the Departments liaison with U.S. Government benefit agencies, Federal Benefits Units (FBUs) and consular sections at U.S. embassies and consulates abroad. CA/OCS/PMO works with the Department of the Treasury and Federal benefit agencies such as SSA, VA, OPM and RRB, to ensure the efficient issuance and fraud-free payment of benefits.

d. In the event of a national disaster or crisis domestically or abroad, or post closure, CA/OCS/PMO will immediately contact U.S. Government benefit agencies, the appropriate Regional Federal Benefits Officer and the US Treasury Fiscal Service to coordinate the most expeditious manner for beneficiaries to receive their payments. Posts will be advised of any new procedures as quickly as possible.

e. U.S. Savings Bonds: CA/OCS/PMO provides guidance, disseminates information and implements new procedures regarding issues involving the U.S. savings bond program which is administered by the Bureau of the Fiscal Service. Bonds are now done electronically. See 7 FAM 528.

7 FAM 522 AUTHORITIES

(CT:CON-678; 09-15-2016)

Legal authority regarding U.S. Treasury matters abroad is derived from:

(1) Treaty authority:

(a) Vienna Convention on Consular Relations (VCCR), Article 5(e) Helping and assisting nationals, both individuals and bodies corporate, of the sending State; Article 5(f) performing certain functions of an administrative nature, provided there is nothing contrary thereto in the laws and regulations of the receiving State and Article 5(m) performing any other functions entrusted to a consular post by the sending State which are not prohibited by the laws and regulations of the receiving State or to which no objection is taken by the receiving State or which are referred to in the international agreements in force between the sending State and the receiving State;

(b) Comparable provisions in bilateral conventions;

(c) (See Treaties in Force and the treaties page on CAWeb);

(2) Statutory authority:

(a) 22 U.S.C. 3904(3) Functions of Service;

(b) 31 U.S.C. 3321 Disbursing Authority in the Executive Branch.

7 FAM 523 Role of the Consular Officer Regarding U.S. Treasury Matters Abroad

(CT:CON-728; 08-18-2017)

a. Each federal benefits-paying agency establishes policies and procedures under which the laws are administered. When policies and procedures are applied outside the United States, consular assistance may be required.

b. Consular officers may act as an intermediary between the beneficiaries and the federal benefit agencies. Assistance, consular officer may be asked to provide, could include:

(1) Expedite Treasury check delivery to payees;

(2) Notify paying agencies of non-receipt of check payments, change of address/status and other problems related to check payment issues;

(3) Advise beneficiaries of the various payment receipt options, Direct Deposit, Direct Express Debit MasterCard card, the need for current addresses, annual enforcement reports, and other related issues; and

(4) Provide notarial services to individuals wanting to cash U.S. Savings Bonds.

7 FAM 524 Limitations on Consular Officers Regarding U.S. Treasury Matters and Disclosure of Information (Privacy Act)

(CT:CON-612; 11-12-2015)

a. Information contained in a name-retrievable system of records concerning matters under the jurisdiction of the U.S. Treasury, e.g., direct deposit records and check payee personal identifiers may not be disclosed except:

(1) As expressly authorized by the Treasury Department;

(2) By written authorization by the individual who is the subject of the record;

(3) In accordance with the 12 exceptions to the conditions of disclosure in the Privacy Act, as amended (5 U.S.C. 552a(b)(1) - (12). 7 FAM 060 provides general guidance regarding the Privacy Act.

b. Any unauthorized disclosure is subject to criminal penalties pursuant to 5 U.S.C. 552a (Privacy Act, as amended) and 26 U.S.C. 6103 Confidentiality and Disclosure of Returns or Return Information.

7 FAM 525 Definitions

(CT:CON-728; 08-18-2017)

Beneficiary: A person who is named to receive income from a trust fund, retirement or disability insurance policy or proceeds or accruing funds from Federal benefits.

Benefit payment: Payment of a benefit by a negotiable instrument, e.g. Direct Deposit or Direct Express Debit MasterCard card, disbursed by the U.S. Treasury, as authorized by a benefits-paying agency to an entitled beneficiary.

Check list: A Treasury computer listing showing the claim number, check number and the amount of each check sent in a bulk shipment to post or with an International Priority Airmail shipment.

Daily check: Checks issued at times other than the monthly cycle checks. They are one-time payments from agencies, e.g., replacement checks and initial payments when past months benefits are due.

Federal benefits: Benefits or assets available by application from Federal agencies to persons who establish their entitlement to such benefits.

Power of attorney: A legal instrument authorizing someone or some entity to act, for a specified purpose, as the agent or attorney of the grantor of the authority.

Regular monthly checks: Recurring benefits paid on a monthly basis, e.g., pensions and compensation.

Replacement check: A Federal check to replace one previously issued, but not received, lost or expired and has a replacement designation on it.

Transient list: A list of individuals who have advised you due to change of address, death, etc., that they would like you to hold or redirect their check for an interim period (not more than three months).

Treasury check: Preprinted order drawn on the U.S. Treasury directing a bank or other financial institution to pay the amount of money designated to the person named on the order.

U.S. Government Benefit Agency: A Federal agency which authorizes disbursement of Treasury funds to designated qualifying beneficiaries.

7 FAM 526 HOW RECIPIENTS RECEIVE THEIR REGULAR BENEFIT payments

(CT:CON-728; 08-18-2017)

a. There are currently five methods of distribution of federal benefits payments to beneficiaries abroad:

(1) Direct Express Debit MasterCard card;

(2) U.S. Direct Deposit;

(3) ITS.gov (International Treasury System);

(4) IAT (International ACH Transaction); and

(5) U.S. Treasury check.

Electronic Funds transfer (EFT) is a generic term and includes all electronic means of delivering payments, except paper checks. IAT entails Treasury sending the payment to a U.S. bank. The U.S. bank then forwards the funds to the correspondent bank in the payee's country of residence where the deposit is made to the beneficiary's account. International Treasury System (ITS) differs from IAT in that the payment is sent directly to the recipient's bank and not through a correspondent bank.

b. International ACH Transaction (IAT) and International Treasury System.gov (ITS.gov):

(1) Benefits-paying agencies have beneficiaries outside the United States that receive direct deposit payments to a checking, share draft or savings account at a financial institution in the United States. With U.S. direct deposit, some beneficiaries arrange regular transfers to their foreign accounts. Per I TFM 4A 2000, Section 2035-Electronic Funds Transfer (EFT) Disbursements-General Guidelines, benefit agencies are required to issue benefit payments using EFT;

(2) Not all foreign countries have ITS.gov because of various technical and legal reasons. Posts can also access the list of countries with ITS.gov availability on the SSA website;

(3) If direct deposit is an option, then reference the appropriate agency's website for further instruction for beneficiaries on signing up for direct deposit:

         SSA direct deposit webpage

         RRB direct deposit webpage

         OPM direct deposit form

         VA direct deposit form

NOTE It is important to ask payees if they were having direct deposits made to U.S. accounts and if so, did they close that account?   If they closed the account, the financial institution will return the deposit to Treasury, and the paying agency will suspend benefits awaiting a current address or other information about the payees status.   If they did not close the account, the payments will continue going to that account and it is then up to the payee to contact the financial institution and retrieve the money.   Even though benefit payments are being made by IDD, you should emphasize to the payees that they must report their address of residence to the paying agency or risk a suspension of their benefits.

c. Treasury checks:

(1) Direct deposit is Treasurys preferred disbursement mechanism for all classes of Federal payments. However, some countries do not have this option currently available; therefore, Treasury checks may still be used for those countries. The delivery of paper checks depends on whether the post has a reliable local postal system. For countries with reliable local postal systems, International Priority Airmail (IPA) is the recommended method. For unreliable local postal systems, the checks will be sent to the post via Diplomatic Pouch for their distribution by consular staff;

(2) International Priority Airmail (IPA):

(a) The Fiscal Service payment center is responsible for sending the regular recurring benefit checks to posts. IPA is a viable option for the Fiscal Service to mail checks directly to the individual if the host country has a reliable postal system;

(b) Checks sent via IPA are sent by airmail to a designated postal facility in the foreign country. They are then placed in the local mail system and delivered directly to the recipients address on record; and

(c) A check list addressed to the post will be mailed in the same shipment with the checks, and will serve as an indicator that the checks arrived in the country.

NOTE:   It is important that payees be reminded to advise the post of any changes in their address to avoid misdirected payments. (See 7 FAM 526).   Posts are responsible for advising CA/OCS/PMO at fedben@state.gov copying the servicing FBU of any changes in the reliability of the local postal system so the procedures for mailing checks to post may be changed as appropriate.

(3) State Department Diplomatic Pouch:

(a) The diplomatic pouch is used to transmit U.S. government checks when the host country does not have a reliable postal system;

(b) When countries do not have reliable postal systems or in countries with fraud issues, the Fiscal Service will send checks in bulk shipment to the Departments Diplomatic Pouch facility. The checks are then dispatched to posts via the first available pouch. Normally checks arrive at posts between the 5th and 10th of the month. A checklist showing the claim number, check number and the amount of each check is enclosed;

(c) The consular staff will:

(i) Date-stamp the list when the checks are received by the post and contact the beneficiaries. Checks may be picked up by beneficiaries at the U.S. embassy/consulate or mailed at beneficiaries' expense if a reliable express courier is available;

(ii) If the beneficiary prefers to pick up the check, consular staff must date-stamp the list when the recipient picks up the check. Payee must provide photo identification and sign for receipt of his/her check;

(iii) Remove any checks for individuals on the "transient list" of recipients registered with the post or enrolled in the Smart Traveler Enrollment Program (STEP), who requested temporary special handling (forwarding to another address), and redirect the check. In the event of a death, return the check to the Treasury Fiscal Service post payment center. Annotate the check list indicating any special handling of specific checks;

(iv) Checks should be redirected as soon as possible or safely locked up until disbursed or returned. Do not hold more than two checks per individual and do not hold any check longer than 60 days.

(4) Once post has determined that the local mail system in the country is reliable and post has verified that the recipients' addresses are current and accurate, the consular officer should inform CA/OCS/ PMO at fedben@state.gov, copying the appropriate FBU, hub so PMO can request Treasury to change the country to IPA. In the interim, if bulk shipment is received, the consular staff will:

(a) Mail checks to individuals on the date of the check or as soon after as possible and indicate date of mailing on the list;

(b) Checks should be sent first-class and not registered mail because it is usually slower. The Fiscal Service reimburses the Department for postage fees consult with your financial management officer regarding the posts procedures); and

(c) If the local postal system becomes unreliable, inform CA/OCS/PMO, copying your servicing FBU, so the delivery can be changed back to diplomatic pouch.

(5) Third-party check pick up: Discourage allowing a third party to pick up a check. (Third-party must have a power of attorney or comparable authorization from beneficiary.) If health is an issue for the beneficiaries, suggest the possibility of a representative payee. (See specific paying agency subchapter in 7 FAM 500 for procedures); and

(6) Photocopying U.S. Treasury checks: U.S. Treasury checks should never be photocopied in their entirety. You may photocopy the window address portion only. You should not open checks unless you are returning them to the paying agency and have to stamp it Not Negotiable.

7 FAM 527 HOW TO REPORT MISSING OR MISDIRECTED CHECKS

7 FAM 527.1 Bulk Shipments

(CT:CON-728; 08-18-2017)

a. When post has not received an expected shipment of checks by the 10th of the month (or the date post usually receives them), and post has not been informed that delivery would be delayed, post should initiate bulk loss procedures immediately. Do not initiate loss procedures before the 10th of the month or the usual date of receipt.

b. The consular officer or the LE staff working on federal benefits should make efforts to locate the shipment by checking with the posts mailroom.

c. Post should notify the regional Federal benefits officer (RFBO) indicating the type of payment; and if a partial shipment has been received, the beginning and ending check numbers.

d. Advise CA/OCS/PMO at FedBen@state.gov.

e. If the original shipment arrives after notification that replacement checks have been issued, post should distribute whichever set is received first. The checks (originals or replacements) not distributed should be stamped Not Negotiable and returned promptly to the Treasury's Fiscal Service Post Payment Center.

NOTE: Treasury cannot re-issue checks without authorization from the U.S. Government Benefit Agency that authorized the payment. Replacement checks will be re-issued as soon as the authorizing Federal benefit agency submits the file of nonreceived payments to Treasury's Fiscal Service's Post Payment Center.

f. If post receives a misdirected shipment designated for another post, alert that post immediately and advise the RFBO, Treasury, and CA/OCS/PMO. The email should include the date of receipt of the checks, date of reshipment to the correct post, the paying agency and the number and date of the checks, as shown on the check list.

g. Post should forward the shipment to the proper post by the most efficient and reliable means possible or in accordance with by specific instructions from the paying agency or CA/OCS/PMO.

h. If the shipment was sent to post incorrectly because of a labeling error, post should inform the Treasury by sending an email to kfc-special-handling@fiscal.treasury.gov and pfc-specialhandling@fiscal.treasury.gov with the subject line, IMPROPERLY LABELED TREASURY CHECKS.

7 FAM 527.2 Individual Payee Checks

(CT:CON-728; 08-18-2017)

a. The process for reporting nonreceipt of checks issued by the U.S. Treasury is established by the Department of the Treasury and requires that posts immediately report the nonreceipt of a check to the paying agency (SSA, VA, OPM, RRB, etc.). Indicate any special hardship or urgency involved. The paying agency must verify to Treasury that the missing payments are actually due.

b. Posts should encourage payees to sign-up for Direct Deposit if it is available at your post to avoid missing checks.

7 FAM 527.3 What Must be Reported?

(CT:CON-728; 08-18-2017)

a. When reporting a missing check to the paying agency, posts should include the following information:

(1) Name of the payee (beneficiary/claimant);

(2) Paying agency claim number or Social Security number of payee including prefixes and suffixes;

(3) Date of the check (e.g., January 1, 2016);

(4) Type of payment (pension, compensation, education, etc.) if known;

(5) Any recent correspondence from the paying agency;

(6) Current mailing address of payee and recent change of address report, if appropriate.

b. Also see subchapter in 7 FAM 500 for each paying agency for specific reporting requirements for checks not received.

7 FAM 527.4 What if the Check Has Been Endorsed and/or Negotiated?

(CT:CON-612; 11-12-2015)

a. If the Treasury Department determines that the missing check was actually negotiated, Treasury will send the payee an image of the check and a claims package. If the payee agrees that he/she did in fact sign the check, no further action is necessary.

b. If the payee alleges he/she did not endorse the check and forgery is alleged, the payee must complete the claim form included in the package and return it to the address provided. Upon receipt of the claim form, Treasury will adjudicate the claim. If forgery is determined, a settlement check is authorized to the payee or a transfer is authorized to the agency.

c. If the check is lost (endorsed or not endorsed), and is not negotiated within one year of the issue date, the check is canceled and the funds returned to the issuing agency.

d. If the payee allows a third party to receive and/or negotiate his/her check, Treasury will not take any action. The individual must look to the third party for restitution.

7 FAM 527.5 What if the Check Has Been Lost, Damaged or Misdirected?

(CT:CON-728; 08-18-2017)

a. If a check has been lost or damaged, so that it is not negotiable, post should treat it as a non-receipt of check and indicate that it was lost or was damaged and that it is not negotiable.

b. If the original lost check is located after a replacement request has been made, the payee may cash whichever one is available and post should stamp the other Not Negotiable, code it and return it to Treasury. Post should return damaged checks to Treasury.

c. If the check was misdirected because of an incorrect geographic consular code, post should immediately forward the check to the correct post. Notify the receiving post, the servicing FBU in case of an SSA check, and CA/OCS/PMO(so they can contact Treasury for the code to be corrected).

7 FAM 527.6 How To Return Undeliverable Checks To The Department Of The Treasury

(CT:CON-728; 08-18-2017)

a. Posts may open the envelopes to identify the paying agency. If the checks are for SSA benefits, post should notify the appropriate servicing FBU. Do not return checks to the paying agency. Annotate checks with the reason for return code for the specific paying agency in the lower left-hand corner (see 7 FAM Exhibit 520(A) for codes). Be certain to determine the correct paying agency as indicated on the check because assigning the wrong code could suspend the payees benefits.

b. Also stamp the checks Not Negotiable below the last line of the address and above the solid MICR line at the bottom before you return them. All cancelled federal benefits checks should be returned to the following address:

7 FAM 527.7 Change Of Payee Address/Status

(CT:CON-728; 08-18-2017)

a. Beneficiaries, claimants and/or survivors must advise the paying agency, often through your post, of a change of name, address, marriage, divorce, employment, death, or any other change in status that affects the entitlement, suspension, delivery or nondelivery of a Federal benefit.

b. Post should advise the individual of the specific benefits paying agency requirements for change of status notification and assist when necessary by providing forms and information.

c. What must be reported:

(1) Name of the payee (beneficiary/claimant);

(2) Benefits paying agency claim number or Social Security number of payee including prefixes and suffixes;

(3) Event causing the change of status and date of the particular change;

(4) Type of benefit (pension, compensation, education, etc.); and

(5) Current mailing address of payee.

d. Post notification of paying agency: Notify the paying agency of the change. Notification may be by direct input for SSA if your post is a Federal benefits unit (FBU), or by email or FAX for other agencies. A separate notification should be made for each individual.

e. Post should return checks to Treasury in cases of death of a payee.

f. Post should redirect checks received to the new address. If the paying agency has not changed the address in three months, send a follow-up notification to the paying agency.

7 FAM 527.8 Power of Attorney

(CT:CON-612; 11-12-2015)

a. Power of attorney forms are used to authorize negotiation of Treasury checks by an entity other than the inscribed payee. Treasury, the Department of State, and the paying agencies do not draft or provide language for legal instruments such as powers of attorney; instead, you should advise individuals that there are several websites that have legal forms available for a nominal fee.

b. Some paying agencies, e.g., SSA, only accept Form SF-233, Special Power of Attorney by Individual for the Collection of Checks Drawn on the United States Treasury. If a power of attorney other than Form SF-233 is submitted, contact your RFBO or the paying agency for guidance before releasing the check(s).

c. Form SF-233: Use this form when the beneficiary is receiving a paper check. Checks received by diplomatic pouch will be redirected by the post to the addressee, which in this case will be the financial institution of the payees account. The problem with using Form SF-233 is that other notices for the beneficiary are also sent to the financial institution and if they do not forward them to the individual, payments could become suspended, for example due to non-receipt of foreign enforcement questionnaires.

7 FAM 528 U.S. Savings Bonds And Treasury Notes

(CT:CON-678; 09-15-2016)

a. As part of the Treasury Department, the Bureau of the Fiscal Service borrows money needed to operate the Federal Government. It accomplishes its mission of administering the public debt by issuing and servicing U.S. Treasury marketable, savings and special securities.

b. How do owners cash U.S. savings bonds when living abroad?

(1) When banking facilities incorporated in the United States, the territories or possessions of the United States, or the Commonwealth of Puerto Rico are available: Normally, banks in foreign countries are not authorized to redeem U.S. Savings Bonds. However, if the owner is a U.S. citizen, he/she can redeem U.S. Savings Bonds in a foreign country at any banking facility of a bank that is incorporated in the United States, the territories or possessions of the United States, or the Commonwealth of Puerto Rico.

(2) When banking facilities incorporated in the United States, the territories or possessions of the United States, or the Commonwealth of Puerto Rico arent available: If such a facility is not available at your post or the individual is not a U.S. citizen, then the following procedures must be followed:

(a) The request for payment must be signed in the presence of (and certified by) an official authorized to certify the request. This includes any U.S. diplomatic or consular representative or any officer of a foreign branch of a bank or trust company incorporated in the United States, the territories or possessions of the United States, or the Commonwealth of Puerto Rico.

(b) If none of these is available, the request may be signed in the presence of (and certified by) a notary public or other officer authorized to administer oaths. When the certification is executed in a country that is party to the 1961 Hague Convention Abolishing the Requirement for Legalization of Foreign Public Documents (see 7 FAM 876), the official character and jurisdiction of the certifying official must be authenticated by either an apostille or a U.S. diplomatic or consular representative. For certifications performed in countries not party to the Hague Apostille Convention, the individuals official character and jurisdiction must be attested by a U.S. diplomatic or consular representative.

(c) Requests may also be certified by any commissioned officer or warrant officer of the Armed Forces of the United States, but only for members of the respective services, their families, and civilian employees at posts, bases, or stations. The certifying officer must indicate his/her rank and state that the individual signing the request is one of the class whose request the certifying officer is authorized to certify.

(d) A U.S. citizen must provide a statement over his/her signature stating he/she is a U.S. citizen and providing his/her Social Security number.

(e) A non-U.S. citizen must complete and sign form IRS-W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding.

(f) Send the bond and the required statement/form to:

(3) What is the role of the U.S. consular officer when a bond/note owner presents a bond/note for certification?

(a) A consular officer may not certify a bond/note on which you are named as owner or co-owner;

(b) Verify the identity of the presenter as owner/co-owner (e.g., current passport, military identification card);

(c) Print on the back of the bond/note identifying information (e.g., passport number, date and place issued);

(d) Observe the signing of the bond/note by presenter, ensure signature is the same as it appears on the face of the security and complete the certification section on the instrument;

(e) Sign and seal the instrument after all the requirements have been met and give the owner a no-fee receipt for the notarials provided (see the Schedule of Fees for Consular Services, 22 CFR 22.1); and

(f) Inform the presenter to mail his/her securities directly to the following address. Also, suggest that he/she make a record of the bond numbers in case they are lost in the mail.

(g) Additional information about U.S. Savings Bonds is available on the Bureau of Fiscal Service Internet page.

See Treasury Direct Savings Bonds Treasury Securities and Programs

7 FAM Exhibit 520(A)
U.S. Department of the Treasury REASON-FOR-RETURN-CODES for Federal Benefits Checks

(CT:CON-678; 09-15-2016)

 

UNCLASSIFIED (U)