BNUMBER: B-270008-O.M. 
DATE:  November 20, 1995
TITLE: Vietnamese Claims (Claim of Mr. Gia Huu Pham and related cases

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Date:   November 20, 1995

To:     Director of Adjudication, PTLD-Sharon S. Green

From:   Associate General Counsel-Lowell Dodge

Subject:Vietnamese Claims (Claim of Mr. Gia Huu Pham and related 
        cases)-B-270008-O.M.

This is in response to your request for guidance in your memorandum to 
the General Counsel dated September 29, 1995, concerning several pay 
claims of former foreign national employees arising from their service 
to the United States in the former Republic of Vietnam in 1975.  In 
many cases, these former employees were unable to leave the Socialist 
Republic of Vietnam until relatively recently and have been lawfully 
admitted to the United States under the Department of State's Orderly 
Departure Program.  They now seek final compensation, usually for one 
or two pay periods in April 1975, severance pay, or other benefits.

In one case you present, copies of official National Archives and 
Records Administration records show that Mr. Gia Huu Pham was employed 
by the United States government from November 13, 1961, until the Navy 
separated him by a reduction-in-force action, effective April 30, 
1975.  However, while he was at work on April 28, 1975, acting under 
the orders of his last supervisor, Mr. John F. Smekal, he was struck 
by a stray bullet and had to be hospitalized.  By the time he 
recovered, the People's Democratic Republic of Vietnam (now the 
Socialist Republic of Vietnam) had taken control, and he alleges that 
he did not receive compensation for the last pay period and severance 
pay to which he was then legally entitled.  After imprisonment and 
other difficulties, he was lawfully admitted to the United States 
under the Department of State's Orderly Departure Program in October 
1991.

Mr. Pham filed his claim with the agency by letter dated February 1, 
1992.  The agency denied the claim on the ground it was barred by the 
applicable statute of limitations.

Summary

As a general rule, claims arising from the evacuation of Vietnam in 
1975 are barred under the 6-year statute of limitations in 31 U.S.C.  
3702(b).  One exception to this rule is established by law.[1]  To 
meet the exception, an employee must show: (1) that a payment that 
would otherwise have been transmitted to the employee was withheld 
under 31 C.F.R.  211.1 (1994); and (2) that either (a) the payment 
was placed in a "special deposit account" and held in trust for the 
employee
(31 U.S.C.  3329(b)(4)), or (b) if the alternative procedures 
described in the Treasury Financial Manual (Volume 1, Section 
4-2085.10) were followed, the amount of the payment has been 
established as a liability on the books of the employing agency for 
the benefit of the employee.  The requirements for meeting this 
exception are to be strictly construed.  Only if these requirements 
are met may the employing agency entertain such a claim.

Explanation

Title 31 U.S.C.  3329(a) (1988) requires the Secretary of the 
Treasury to prohibit any checks which are, or will be drawn on public 
money from being sent to an individual payee in a foreign country if 
the Secretary determines that the postal, transportation, banking, or 
other conditions in that country do not reasonably ensure that the 
payee will receive the check and be able to negotiate it for full 
value.[2]  The statute provides a mechanism to accomplish its 
objectives.  See 31 U.S.C.  3329(b)(3) (1988).  It also authorizes 
the Secretary of the Treasury to "otherwise direct," that is, to 
establish alternate mechanisms.  This the Secretary has done.  It is 
the alternate method that is relevant here.  We proceed to briefly 
describe it.

Under 31 U.S.C.  3329(b)(3) (1988) the Secretary of the Treasury has 
promulgated regulations which "otherwise direct" the drawer i.e., a 
government department or agency, as to what to do with money owed to 
payees in restricted foreign countries.  By Treasury Department 
Circular No. 655, revised November 14, 1964, the Secretary of the 
Treasury authorized the second method, and the first method was 
superseded.  Our decision, Xie Qianhao, 70 Comp. Gen. 612, 614 (1991) 
describes the alternate method as follows.

        "In lieu of writing checks payable to individuals in the 
        restricted countries designated by the Secretary of the 
        Treasury (and set forth at 31 C.F.R.  211) and depositing 
        them in the special deposit trust fund authorized by 31 U.S.C.  
        3329, the Treasury Department has adopted an alternative 
        procedure that is less burdensome administratively but which 
        accomplishes the same objective as the statute.  Under the 
        alternative procedure, which is set forth in section 2085 of 
        Part 4 of Volume 1 of the Treasury Fiscal Requirements Manual 
        for Guidance of Departments and Agencies, agencies are 
        directed not to draw checks or warrants intended for 
        deliveries in restricted countries:

        "In place of drawing a check or warrant which would be 
        withheld under 31 C.F.R.  211, the drawer agency will 
        withhold payment and will establish the liability on its 
        books.

        "Section 2085.20 further provides that claims for 'proceeds 
        withheld should be processed by the administrative agency 
        responsible for originally authorizing issuance of those 
        proceeds.'  Upon approval of a claim for withheld proceeds, 
        agencies are directed to pay the claim by issuing a check and 
        decreasing the respective liability on the agency's books.  
        Section 2085.20a."

Accordingly, the subject claims are barred under 31 U.S.C.  3702(b) 
unless the employing agency has withheld payment and established a 
liability on its books, as prescribed by the Secretary of the 
Treasury, currently,  I Treasury Financial Manual  4-2085 (1988).

Thus, under Xie Qianhao, 70 Comp. Gen. 612 (1991), if an agency has 
withheld a payment, e.g., compensation or severance pay, otherwise due 
to a former employee in a restricted country, and has established that 
liability on its books, payment may be made to that former employee.  
Otherwise, the claim is subject to the 6-year statute of limitations 
in 31 U.S.C.  3702(b) (1988).  In this regard, we emphasize the 
necessity of meeting the foregoing stated conditions.[3]

As to any claim filed with our Office, we note that our regulations 
require that the agency from which the claim originated shall 
initially adjudicate the claim.  See 4 C.F.R.  31.4 (1995), and see 
also I Treasury Financial Manual  4-2085.20 (Claims for restricted 
proceeds shall be processed by the agency responsible for originally 
authorizing issuance of those proceeds).  Thus, in regard to the 
Vietnamese claims which arose in 1975, you are instructed to remand 
those claims which have not been finally adjudicated by the 
responsible agencies to those agencies for initial adjudications.  The 
employing agency should be advised that it has the initial duty to 
determine whether it withheld payment and whether it established a 
liability its books in each case.  Unless it did so, the claim is 
barred by 31 U.S.C.  3702(b).  Obviously, only if it is determined 
that the claim is not barred can questions of the legitimacy of the 
claim or the adequacy of documentation for the claim be reached.  In 
regard to burden of proof issues, see British, Dutch and Italian 
Claims for Fuel and Services for U.S. Navy Vessels, 67 Comp. Gen. 52 
(1987) and 4 C.F.R.  31.7 (1995).

Insofar as B-254067-O.M., December 2, 1993, and Phan Manh Luong, 
B-244976-O.M., Oct. 17, 1991, may be inconsistent with this 
memorandum, they are hereby modified.
B-270008-O.M.
November 20, 1995
DIGEST
Claims arising from the evacuation of Vietnam in 1975 are barred under 
the 6-year statute of limitations in 31 U.S.C.  3702(b) unless they 
meet an exception to this rule as established by law.  To qualify for 
the exception, claimants, including former Vietnamese employees, must 
clearly meet the standard set forth both in 31 U.S.C.  3329 (1988), 
and in the regulations issued under this statute by the Secretary of 
the Treasury found in 31 C.F.R. Part 211 (1994) and I Treasury 
Financial Manual (TFM)  4-2085 (1988).  To meet the statutory 
exception, an employee must show:  (1) that a payment that would 
otherwise have been transmitted to the employee was withheld under 31 
C.F.R.  211.1 (1994); and (2) that either (a) the payment was placed 
in a "special deposit account" and held in trust for the employee, if 
the statutory provision (31 U.S.C.  3329(b)(4)) is literally 
followed, or (b) if the provisions of the Treasury Financial Manual 
(Volume I, Section 2085.10) are applied, the amount of the payment has 
been established as a liability on the books of the employing agency 
for the benefit of the employee.   The requirements for meeting this 
exception are to be strictly construed.  Only if these requirements 
are met may the employing agency entertain such a claim.  Insofar as 
B-254067-O.M., December 2, 1993, and Phan Manh Luong, B-244976-O.M., 
October 17, 1991, may be inconsistent with this memorandum, they are 
hereby modified.

1. 31 U.S.C.  3329 (1988).

2. The Secretary added Vietnam to the restricted countries list on 
April 15, 1976.  See 41 Fed. Reg. 15846-15847, codified at 31 C.F.R.  
211.1(a) (1994).

3. Those conditions were not met in Nguyen Thi Hao, B-253096.3, Aug. 
11, 1995, and My Anh Company, 73 Comp. Gen. 111 (1994), and the claims 
there were denied.  Those cases are thus distinguishable from Xie 
Qianhao, supra.