Policy Regarding Opening, Managing and Closing Foreign Bank Accounts

Introduction

In some instances, it may be necessary for departments/divisions at The Johns Hopkins University (JHU) to open a bank account in a foreign country to support an overseas program or activity. Generally, in order to open a bank account in a foreign country, JHU will first need to register in that country with one or more government ministries. In addition, having a foreign bank account triggers certain reporting and compliance obligations for JHU under both the U.S. and the foreign country’s laws. To enable JHU to exercise appropriate oversight of foreign or remote bank accounts, each JHU department must follow these policies and procedures.

Steps

Contact the Tax Department to determine whether JHU is already registered to conduct activities in the particular foreign country of interest.

Once registration status has been determined, contact the JHU’s Treasurer’s Office to inquire on bank account opening. The University has established foreign banking relationships with Standard Chartered Bank, EcoBank, Standard Bank and ABSA (formerly Barclay’s Bank). These close relationships facilitate the opening and closing of bank accounts abroad along with enabling the reporting of bank balances and transactional activity in the account. Bank accounts may be necessary in countries where JHU’s relationship banks do not have a presence. Under this scenario, the department, with approval of the DBO, will recommend a bank. However, final selection of a bank will be determined by the Treasurer’s Office.

Adequate lead time must be provided to the Treasurer’s Office to open any foreign bank account. Depending on the status of the registration and the banking regulations of the foreign country, the bank account opening process can take on average two (2) to six (6) months, and in some countries even up to one (1) year.

  1. All overseas accounts (including any subaccounts) must be in JHU’s name and must be designated as commercial accounts.
  2. A foreign bank account may only be opened or closed with the written authority of either the JHU’s Executive V.P. for Finance and Administration, Controller, Treasurer, and/ or the Deputy Treasurer. Field offices cannot add or delete signatories to the bank account. Any changes to this requirement must be approved by the Division and the Treasurer’s Office.
  3. Department will designate host country employee(s) to be granted, via a power of attorney (POA) and/or appropriate bank signature cards, the requisite authority to be a signatory on the foreign bank account(s). For all overseas accounts, JHU’s Executive V.P. for Finance and Administration, Controller, Treasurer, and/or the Deputy Treasurer, must also be authorized signatories. All exceptions to this requirement must be pre-approved by the Treasurer’s Office.
  4. Immediately after a signatory is no longer employed by JHU or the field office, the department must notify the Treasurer’s Office so that he/she may be removed from the bank account immediately. Failure to provide this notification puts the department at risk for non-compliance.
  5. In some countries, the local laws or regulations may dictate whether senior management from JHU may be permitted to become signatories on University accounts. These special circumstances will be discussed and determined on a case-by-case basis by the Treasurer’s Office.
  6. Only employees of JHU may be signatories on a JHU foreign bank account. Consultants, independent contractors, temporary employees, and employees of any agency are prohibited from signing checks or otherwise authorizing the release of funds from a JHU bank account.
  7. JHU Treasurer’s Office strongly encourages the use of electronic banking platforms for balance reporting and payment initiation, wherever feasible. JHU employees are prohibited from communicating directly with the bank to establish this service. JHU’s Treasurer’s Office will coordinate the use of all electronic banking platform set-ups for new and existing bank accounts. Please refer to the JHU Electronic Banking Policy.
Steps for Establishing/Opening Foreign Bank Accounts

The Department will complete a Foreign Bank Account Opening Form (FBAO), available on the Treasurer’s Office website and withapproval of the DBO, determine the purpose of the account, select the Custodian and Administrator, and determine the authorized signers on the account.  All authorized signers on the bank accounts must complete a signature card and provide a color copy of their passport, driver’s license and two original 2×2 passport pictures. Country requirements may in some cases, require additional identifying documents, such as a utility bill for validation of address.

  1. With the assistance from the department, the Treasurer’s Office will complete the account opening process and submit all of the executed documents to the bank for further processing. Once the account is opened, the department will be notified of the bank account numbers, any instructions and contact details for the in-country branch of the bank.
  2. The DBO will submit an approved Petty Cash Action Form (B-29) and a Statement of Petty Cash Custodian’s Responsibility form (B-30) to the Treasurer’s Office to establish the Remote Imprest Account. This package should include a copy of the award and a 6-month cashflow validating the amount of the ceiling, which should be reflective of 3 months of expenses.
Managing A Foreign/Remote Bank Account
  1. The department must enforce the policy that foreign bank account signature authority may not be delegated or locally assigned without written approval from the Treasurer’s Office. Only the Treasurer’s Office will add or delete signatories to the bank account.
  2. The department must establish internal processes and responsibilities for administering local bank accounts, including rules regarding deposits, withdrawals, distributions, or wire transfers of funds, and the monthly reconciliation of transaction activity to project records.
  3. Bank accounts will be reconciled monthly. The reconciliation report and the bank statement will be included in the field office’s monthly financial status report. The Imprest account will use sequentially numbered checks for all disbursements.
  4. Unused, blank checks should be kept in a locked drawer or safe and should be accessed only by staff who are authorized to prepare checks.
  5. Replenishments of the account will be done after Accounts Payable has reviewed the monthly reconciliation. Departments/divisions must provide a copy of the most current bank statement prior to requesting any replenishment. Replenishments occur via QuickBooks uploads or via on-line check request to allocate the expenses to the correct budget center by Accounts Payable. Once a replenishment is approved by Accounts Payable, the payments are sent electronically to the bank for processing.
  6. To request an increase to a Remote Imprest Fund’s ceiling, a Petty Cash Action Form Part II (B-29), Statement of Petty Cash Custodian’s Responsibility (B-30) and current reconciliations (including bank statements), will need to be completed and sent to the DBO. Once approved, the DBO will send the request to the Treasurer’s Office to process the ceiling increase.
  7. To request a decrease to a Remote Imprest Fund’s ceiling, a Petty Cash Action Form Part II (B-29) and Statement of Petty Cash Custodian’s Responsibility (B-30), along with the SAP upload, must be sent to the DBO. Once approved, the DBO will send the request to the Treasurer’s Office to process the ceiling decrease.
  8. Pre-signing of blank checks is prohibited.
Closing a Foreign Bank Account
  1. Only the Executive V.P. for Finance and Administration, Controller, Treasurer, and/or the Deputy Treasurer may close a foreign bank account. The Department must notify the Treasurer’s Office when a foreign account needs to be closed, who will coordinate with the bank to return the remaining funds to Baltimore and ensure that the account (s) are officially closed.
  2. In order to initiate a bank closing, the department must complete a Bank Account Closing Form (FBAC) and submit to the DBO for approval. After approving, the DBO must forward the Form to the Treasurer’s Office. The Treasurer’s Office will begin the bank closing process.
  3. Closing a bank account does not automatically result in the closing of the Remote Imprest Fund. To close the Remote Imprest Fund, a Petty Cash Action Form Part III (B-29), along with the SAP upload, must be sent to the DBO by the Department. Once approved, the DBO will send the required documentation to the Treasurer’s Office to close-out the fund.
Annual Reporting and Compliance Requirements

Both JHU and its employees who are owners or signatories of foreign bank accounts whose value exceeds $10,000 at any time during the calendar year may file Form FinCEN 114 (Report of Foreign Bank and Financial Accounts or FBAR) with the Department of Treasury on or before April 15th of the year following the calendar year reported. Based upon FinCEN’s recent guidance, JHU has determined that your signature authority over a JHU account(s) is not also a personal financial interest. As a result, you are not required to file a FBAR for the JHU institutional account(s) on which you have signature authority only. However, if you have a foreign account in which you do have a financial interest (i.e., not a JHU account), we encourage you to review the FBAR requirements at the IRS website.

JHU’s Treasurer’s Office prepares the bank related data necessary for the FBAR filings for JHU on a yearly basis and upon request, JHU Treasurer’s office will provide employees, whom are signatories on JHU’s foreign bank accounts with the information required to complete their personal filing if they choose to file FBAR and/or have additional personal financial interest in an account outside of JHU. During this FBAR preparation process, the Treasurer’s Office will also review users (initiators and approvers) of all foreign bank accounts using electronic banking platforms.

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Foreign Exchange Rates

Electronic Banking Platforms

FAQ – Outgoing Wire Payments