[Code of Federal Regulations] [Title 32, Volume 2] [Revised as of July 1, 2008] From the U.S. Government Printing Office via GPO Access [CITE: 32CFR231.6] [Page 483-487] TITLE 32--NATIONAL DEFENSE CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE (CONTINUED) PART 231_PROCEDURES GOVERNING BANKS, CREDIT UNIONS AND OTHER FINANCIAL Subpart A_Guidelines Sec. 231.6 Procedures--overseas banks. (a) General provisions of banking services overseas. The Department acquires banking services overseas for use by authorized persons and organizations from the following sources: (1) MBFs operated under contract and authorized by the pertinent status of forces agreement, other intergovernmental agreements, or host- country law. (2) Domestic and foreign banking institutions located on overseas DoD installations. Each such institution shall be: (i) Chartered to provide financial services in that country. (ii) A party to a formal operating agreement with the installation commander to provide such services. (iii) Identified, where applicable, in the status of forces agreements, other intergovernmental agreements, or host-country law. (b) Establishment--(1) Overseas MBFs operated under contract. Installation or community commanders requiring banking services will send a request through command channels to the Secretary of the Military Department concerned (or designee) for concurrence and subsequent transmittal to the Director, DFAS, for approval. (i) Requests to establish MBFs shall include, but are not limited to, the following information: (A) The approximate number of DoD personnel at the installation and in the community and any other persons who may be authorized to use the MBF. (B) The distance between the installation and the nearest MBF and credit union office, the names; addresses, and telephone numbers of the operators of those institutions; and the installations and communities where they are located. (C) The availability of official and public transportation between the installation or community and the nearest MBF and credit union office. (D) The name and location of the depository used to make official deposits for credit to the TGA. (E) A list of organizational and nonappropriated fund accounts, the name and location of the financial institutions where deposited, and the average daily activity and balance of each account. (F) A written description and photographs or drawings of the space proposed for MBF use. The extent and approximate cost of required alterations, including the construction of counters and teller cages. (G) A statement that recognizes the logistical support, including equipment, to be provided by the local command as detailed in paragraph (c) of this section. The statement will include the costs of such equipment and the manner in which it will be acquired. (H) In countries where no MBFs currently are operated under contract, a statement from the cognizant Combatant Command that the requirement has been coordinated with the U.S. Chief of Diplomatic Mission or U.S. Embassy and that the host country will permit the operation in accordance with paragraph (c)(1)(i) of this section. (I) Any other pertinent information to justify the establishment of an MBF. (ii) As a general rule, MBFs may be established only when the installation or community population meets the following criteria: (A) Full-time MBF. Except in unusual circumstances, a total of at least 1,000 permanent military personnel and DoD civilian employees are necessary to qualify for a full-time MBF. (B) Part-time MBF. Except in unusual circumstances, a total of at least 250 permanent military personnel and DoD civilian employees are necessary to qualify for a part time MBF. [[Page 484]] (iii) If the population at a certain remote area is not sufficient to qualify under the criteria for full-time or part-time MBFs, the installation or community commander will explore all other alternatives for acquiring limited banking services before requesting establishment of an MBF as an exception to these provisions. Alternatives to limited banking services include installation of ATMs and check cashing and accommodation exchange service by disbursing officers and their agents. (iv) Establishment of an overseas MBF is predicated on and requires: (A) Designation of the MBF contractor as a depositary and financial agent of the U.S. Government by the Department of the Treasury. (B) The availability of banking contractors interested in bidding for the operation of the facility and the viability of such proposals. (C) The availability of appropriated funds to underwrite such banking services. (D) Establishment of a U.S. dollar currency custody account to support banking operations. (2) Other overseas banking offices. Where a need for financial services has been identified and either the banking and currency control laws of certain host countries do not permit MBFs to operate on DoD installations or MBFs, where permitted, have not been established, then the following applies: (i) Installation or community commanders shall send requests for banking services or unsolicited proposals from foreign banking institutions to their Major Commands with supporting data as required in Sec. 231.5(b)(1). (ii) Major Commands shall forward installation or community commander requests to the Secretary of the Military Department concerned (or designee) for approval. The Secretary of the Military Department concerned (or designee) shall coordinate with the DFAS to seek the designation of the parent foreign banking institution as a depositary and financial agent of the U.S. Government by the Department of the Treasury. (iii) Banking offices in this category cannot become operational until the foreign parent banking institution has been designated a depositary and financial agent of the U.S. Government. The institution also shall indicate a willingness and ability to provide collateral backing for any official and nonappropriated fund U.S. dollar deposits. Any collateral pledged shall be in a form acceptable to the DFAS and the Department of the Treasury. (c) Logistical support--(1) Overseas MBFs operated under contract. (i) Given that appropriated funds support those MBFs that are operated under contract, installation or community commanders shall provide the MBFs logistical support to the maximum possible extent. Such support normally includes: (A) Adequate office space, including steel bars; grillwork; security doors; a vault, safes, or both; security alarm systems and camera surveillance equipment (where deemed necessary) that meet documented requirements of the MBF contractor's insurance carrier; construction of counters, teller cages, and customer and work areas; necessary modifications and alterations to existing buildings; and construction of new MBF premises, if necessary. (1) The size and arrangement of space should permit efficient operations. Space assigned may not exceed that prescribed in DoD 4270.1- M. (2) All maintenance, repair, rehabilitation, alterations, or construction for banking offices shall comply with guidelines established by the installation commander. (B) Office space in a building that is accessible to most users and permits the maximum security. In addition, office space for MBF area and district administrations and storage space for retention of records, files, and storage of supplies. (C) DoD housing on a rental basis to assigned MBF staff that are designated as key and essential MBF managerial personnel who are unable to find suitable, reasonably priced housing in the vicinity of the DoD installation, subject to the assignment procedures and other requirements of DoD 4165.63-M.\11\ --------------------------------------------------------------------------- \11\ See footnote 1 to Sec. 231.1(a). --------------------------------------------------------------------------- (D) Education, on a space-available, tuition-paying basis, provided by the [[Page 485]] Department of Defense Education Activity to minor dependents of assigned staff in accordance with DoD Directive 1342.13.\12\ --------------------------------------------------------------------------- \12\ See footnote 1 to Sec. 231.1(a). --------------------------------------------------------------------------- (E) Air conditioning, which is considered a normal utility for banking offices located at installations that qualify for air conditioning under applicable regulations. Banking space is classified as administrative space at military installations. (F) Utilities (i.e., electricity, natural gas or fuel oil, water and sewage), heating, intrastation telephone service, and custodial and janitorial services to include garbage disposal and outdoor maintenance (such as grass cutting and snow removal). (G) Defense Switched Network (DSN) voice and data communication to include, where feasible, Internet access. (H) Military guards, civilian guards (for use within the installation), military police, or other protective services to accompany shipments of money. This level of protective service also shall be provided at other times as required to include replenishment of ATM currency and receipts, alarm system failures, and to avoid undue risks or insurance costs on the part of the MBF. (I) U.S. Military Postal Service access in accordance with DoD Directive 4525.6.\13\ Use of free intra-theater delivery system (IDS) is authorized for all routine mail sent and received between Army Post Offices (APOs) and Fleet Post Offices (FPOs) within a theater. --------------------------------------------------------------------------- \13\ See footnote 1 to Sec. 231.1(a). --------------------------------------------------------------------------- (J) Office equipment and furniture on memorandum receipt if available from local stock. If office equipment or furniture is unavailable, statements of nonavailability shall be issued. (K) Vehicle registration and fuel sales from government-owned facilities for bank-operated vehicles, if not in conflict with host government agreements. Vehicle registration shall be subject to normal fees. (L) Issuance by local commanders of invitational travel orders, at no expense to the U.S. Government when required for official onsite visits by U.S. based banking institution officials. (ii) Suggestions for changes to the logistical support provisions of the MBF contract may be forwarded for consideration through command channels to the Director, DFAS. (2) Other overseas banking offices. (i) Logistical support provided to such offices will be negotiated with the parent foreign banking institution and incorporated into the written operating agreement. (ii) Logistical support shall not exceed that provided to contract MBFs, as specified in paragraph (c)(1) of this section. (d) Operations--(1) General conditions of MBF operation. (i) Before initiating MBF operations, a written agreement shall be negotiated directly and signed by the installation or community commander and a senior official of the banking contractor or other financial institution concerned. One copy of the agreement with U.S. banking contractors and two copies of the agreement with institutions other than U.S. banking contractors shall be forwarded through command channels to the Secretary of the Military Department concerned (or designee). The Secretary of the Military Department (or designee) shall forward one copy of the agreement with institutions other than U.S. banking contractors through command channels to the Director, DFAS. A copy of the agreement also shall be maintained at all times by the installation or community commander and the banking institution manager. (ii) For MBFs operated by U.S. banking contractors, the agreement shall state operating details not set forth in the contract. Though the contract limits the number of operating hours per week, local commanders and MBF managers should set days and hours of operation to best meet local needs. Operating times may include Saturdays and evening hours when necessary to complement other retail services for DoD personnel, provided the contractor can implement that service at no additional cost to the government. When added cost is involved, the commander shall send a request including reasons for expanded or modified times of operation, through command channels, to [[Page 486]] the Secretary of the Military Department concerned (or designee) for action. If approved, the request, with recommendations, shall be forwarded to the Director, DFAS (or designee). (2) Overseas MBFs operated under contract.--(i) General. Overseas MBFs shall operate under terms and conditions established at the time of contract negotiations and confirmed in respective contracts or contracting officer determinations. (ii) Authorized customers. DoD banking contracts specify the personnel authorized to receive service. Additionally, overseas major commanders may approve banking services for other individuals that qualify for individual logistic support under the regulations of the DoD Component concerned, provided that the use of banking services is not precluded by status of forces agreements, other intergovernmental agreements, or host-country law. (iii) Services rendered. DoD banking contracts specify the services to be rendered and related charges. Suggestions for expansion or modification of authorized services, fees or charges may be forwarded through DoD Component channels to the Director, DFAS. Proposals for any new service must be coordinated with the appropriate Combatant Command and U.S. Chief of Diplomatic Mission or U.S. Embassy to make certain that the proposal does not conflict with the status of forces agreements, other intergovernmental agreements, or host-country law. (iv) Regulation to be provided. The Director, DFAS (or designee) shall advise each U.S. banking contractor operating an overseas MBF of this Regulation and furnish a copy to the contractor. (v) Conditions of operation. (A) Part-time and payday service MBFs shall provide limited services that mirror, to the extent feasible, those provided by full-time MBFs. Since part-time MBFs operate out of nearby MBFs, installation or community commanders shall provide and fund transportation and guards for their operation. (B) Any deficiency of banking services under DoD banking contracts shall be reported to the manager of the MBF within 7 calendar days of noting the deficiency. If the problem has not been corrected within 30 calendar days after being noted, the commander shall report the problem through DoD Component channels to the Director, DFAS (or designee). (C) The MBF contractor and military disbursing officers shall establish cash management practices that minimize the cash required conducting business. (D) Commanders shall assist MBF contractors to develop and update contingency plans for banking services in the event of hostilities or other emergencies. (E) MBF provision of foreign currency shall be in accordance with Volume 5, Chapter 13 of The DoD Financial Management Regulation (DoD 7000.14-R). (3) Other overseas banking offices--(i) Authorized customers. The list of authorized customers shall be negotiated between the installation commander and the foreign banking institution and shall be reflected in the operating agreement. The list of authorized customers included in the operating agreement shall be consistent with the applicable status of forces agreement, other intergovernmental agreements, or host-country law. (ii) Services rendered. Services and charges shall parallel, whenever practical, the services and charges of MBFs operated under contract. Specific services shall be negotiated and included in the agreement with the foreign banking institution. A copy of the agreement shall be sent through DoD Component channels to the Director, DFAS (or designee). (iii) Operating agreements. Before agreements are executed, they will be coordinated with and approved by the cognizant Combatant Command (or designee). (iv) Conditions of operation. A foreign banking institution shall provide equipment (except that furnished by the installation or community), supplies, and trained personnel. (4) Relocation of MBF. (i) When an MBF is moved from one location to another at the same installation or community, the commander shall notify the cognizant Military Department, through command channels. The Military Department shall forward the information to the Director, DFAS (or designee). [[Page 487]] (ii) For all other relocations, prior approval from the Director, DFAS (or designee) shall be obtained through DoD Component channels. (5) Comments. Installation or community commanders shall send their banking comments through DoD Component channels to the Director, DFAS (or designee) for any of the following: (i) Major changes in installation population that would affect use of the MBF. (ii) Opinion that the space assigned is not adequate for the efficient operation of the MBF including a statement concerning corrective action. (iii) Suggestions that might improve the MBF operation, increase efficiency, or decrease costs. (iv) Pending developments that may have a material impact on the MBF operation. (6) Bank liaison officer. The duties of the BLO are outlined in Sec. 231.5(h). (e) Termination. Requests to eliminate any or all MBFs in a foreign country shall include documentation that the U.S. Chief of Diplomatic Mission has been informed and that arrangement for local termination announcements and procedures have been made with the U.S. Embassy. (1) Overseas MBFs operated under contract. In cases where an installation or community no longer can justify overseas MBF operations, the commander shall notify the Secretary of the Military Department concerned (or designee) through command channels. (i) The report shall state whether a part-time MBF should be established and specify the days each week that the MBF would be needed. (ii) The Secretary of the Military Department (or designee) shall send this report with recommendations to the Director, DFAS (or designee). (2) Other overseas banking offices. Termination actions, when required, shall be taken in accordance with the applicable clauses in the operating agreement. Notice of intent to terminate, including the closing date, shall be sent through DoD Component channels to Director, DFAS (or designee), who shall notify the Department of the Treasury so that the foreign banking institution's authority as a Depositary and Financial Agent of the U.S. Government at that location may be revoked.