Foreign Vendor Payments

The College has standing arrangements with many foreign vendors for payments in the form of a standard issue, Accounts Payable check. In these circumstances, a standard Accounts Payable check is the preferred method of payment, as long as the College is not incurring additional charges by using this method.    The Controller’s Office maintains the list of foreign vendors in this category.

For all other vendors, the College should pay invoices in the currency in which it is billed.  In instances where the vendor has billed the College in a foreign currency, or assesses additional charges to accept payment in the form of a check drawn on a US domiciled bank, the Controller’s Office has two options:

1.       Foreign Currency Draft

A Foreign Currency Draft is a check drawn in the requested currency, on a bank in the same country as the vendor.  For example, a vendor in France submits a bill denominated in Euros.  A currency draft to this vendor would be payable in Euros, and issued via a French bank.  This option is ideally suited for low value transactions as it minimizes bank charges to both the College, and the payee.  The total time frame from order to delivery is 2-3 weeks for most countries.

2.       International Wire

International wires are electronic transfers of funds to a foreign account and can be in US dollars or a foreign currency.  International wires generally clear in 1-2 business days, e.g. an order placed on Wednesday will likely be credited to the payee on Friday. However they can take considerably longer if there is an intermediary bank involved in the transfer, if the destination is a country with a less sophisticated banking system, or if the host government intervenes in the transfer.  The following information is needed to place an order for an international wire (* indicates required information):

  • Bank Name*
  • Bank Address*
  • Bank BIC/SWIFT code*
  • Routing or Sort Code (required for Canada, United Kingdom, Australia and New Zealand)
  • Intermediary Bank Information (if needed)
  • Account Name*
  • Account Address*
  • Account Number*
    • International  Bank Account Number (IBAN) for European Union countries
    • CLABE for Mexico

Requesting a Foreign Payment

Before submitting a payment request to the Controller’s Office, it is very important to confirm the payment details with the payee.  In particular, if a foreign entity or person submits an invoice or reimbursement request in US dollars, or requests payment in any other non-domiciled currency (e.g., Euros to a payee in Great Britain), the settlement currency should be confirmed by the payee.  US dollar payments to accounts not specifically structured to receive them can be prohibitively expensive to the payee, can be delayed for weeks, and/or ultimately rejected.  Non-domiciled currency transfers run the same risks and are much costlier than wires in the domiciled currency.  Typically, the best alternative is for the College to convert the US dollar amount into the payee’s domestic currency at the rate available at the time of transfer.   The Controller’s Office may charge the requesting project number for bank fees associated with non-domiciled currency transfers.

The other business process considerations and budgeting requirements for a foreign payment are the same as any other College expenditure.  Payment requests must be properly documented, submitted with accounting detail and signed by an authorized person.   All foreign payment requests should be sent to the Controller’s Office, Attention:  Glenn Morin.

Bowdoin College is not exempt from foreign taxation.  Charges for Value Added Tax (VAT), for example, are valid and must be paid.

Payments to foreign nationals or US citizens living abroad may be subject to US tax withholding or other restrictions.  Please contact Lynne Toussaint for more information.

Currency Exchange Rates

You do not need to calculate the exchange on a foreign currency transaction.  The exchange will be set at the time the Controller’s Office submits the foreign payment order. 

Reimbursements to foreign payees are made in the currency in which they were incurred, e.g. taxi fares paid in Euros will be reimbursed in Euros, assuming that is the payee’s domestic currency.  Reimbursements of US dollar denominated expenses to foreign payees will be converted to the payee’s domestic currency using the rate in effect on the day the expense was incurred.

Please contact Glenn Morin if you have any questions about foreign payments.