B-140401, AUGUST 27, 1959, 39 COMP. GEN. 145

B-140401: Aug 27, 1959

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IT IS STATED THAT THE AGRICULTURAL RESEARCH SERVICE HAS OVER 100 MOTOR VEHICLES IN FOREIGN COUNTRIES AND THAT REPRESENTATIVES OF THE SERVICE WERE RECENTLY CONTACTED BY STATE DEPARTMENT OFFICIALS CONCERNING PROPOSED CONTRACTS FOR FLEET INSURANCE IN MEXICO CITY AND PARIS. WHICH THAT DEPARTMENT WAS PURCHASING ON THE UNDERSTANDING THAT THE MORE VEHICLES INSURED UNDER A CENTRAL POLICY THE CHEAPER THE RATE PER VEHICLE. IT IS REPORTED THAT IN MANY FOREIGN COUNTRIES THERE EXIST SITUATIONS WHICH NECESSITATE THE CARRYING OF INSURANCE COVERING GOVERNMENT VEHICLES. THESE SITUATIONS ARE STATED TO RUN FROM OUTRIGHT REQUIREMENTS OF LAW IN SOME COUNTRIES TO LEGAL PROCEDURES IN OTHERS WHICH. MOROCCO AND FRANCE WERE CITED AS COUNTRIES WHICH REQUIRE THIRD-PARTY LIABILITY INSURANCE BY LAW.

B-140401, AUGUST 27, 1959, 39 COMP. GEN. 145

APPROPRIATIONS - INSURANCE ON OVERSEAS AUTOMOBILES - AGRICULTURE DEPARTMENT ALTHOUGH THE AUTHORITY FOR THE PROCUREMENT OF INSURANCE ON GOVERNMENT- OWNED AUTOMOBILES IN FOREIGN COUNTRIES GRANTED TO THE DEPARTMENT OF STATE BY THE ACT OF AUGUST 1, 1956, 5 U.S.C. 170H (A), AND EXTENDED TO THE FOREIGN AGRICULTURAL SERVICE UNDER THE DEPARTMENT OF AGRICULTURE AND FARM CREDIT ADMINISTRATION APPROPRIATION ACT, 1958, MAKES APPROPRIATIONS FOR THE FOREIGN AGRICULTURAL SERVICE AVAILABLE FOR THE PURCHASE OF INSURANCE FOR THE VEHICLES OF THAT SERVICE, SUCH SPECIFIC AUTHORITY FOR ONLY ONE AGENCY INDICATES THAT OTHER APPROPRIATIONS OF THE DEPARTMENT OF AGRICULTURE WOULD NOT BE AVAILABLE FOR INSURANCE ON OVERSEAS VEHICLES OF THE AGRICULTURAL RESEARCH SERVICE EVEN THOUGH OTHER THAN MONETARY CONSIDERATIONS IN THE FOREIGN COUNTRIES WOULD MAKE SUCH INSURANCE COVERAGE ADVANTAGEOUS TO THE GOVERNMENT.

TO THE SECRETARY OF AGRICULTURE, AUGUST 27, 1959:

BY LETTER OF AUGUST 4, 1959, THE ADMINISTRATIVE ASSISTANT SECRETARY OF AGRICULTURE REQUESTED OUR DECISION AS TO WHETHER APPROPRIATIONS OF YOUR DEPARTMENT MAY BE USED TO PURCHASE INSURANCE POLICIES COVERING GOVERNMENT- OWNED VEHICLES OPERATED BY AGENCIES OF YOUR DEPARTMENT IN FOREIGN COUNTRIES.

IT IS STATED THAT THE AGRICULTURAL RESEARCH SERVICE HAS OVER 100 MOTOR VEHICLES IN FOREIGN COUNTRIES AND THAT REPRESENTATIVES OF THE SERVICE WERE RECENTLY CONTACTED BY STATE DEPARTMENT OFFICIALS CONCERNING PROPOSED CONTRACTS FOR FLEET INSURANCE IN MEXICO CITY AND PARIS, WHICH THAT DEPARTMENT WAS PURCHASING ON THE UNDERSTANDING THAT THE MORE VEHICLES INSURED UNDER A CENTRAL POLICY THE CHEAPER THE RATE PER VEHICLE.

IT IS REPORTED THAT IN MANY FOREIGN COUNTRIES THERE EXIST SITUATIONS WHICH NECESSITATE THE CARRYING OF INSURANCE COVERING GOVERNMENT VEHICLES. THESE SITUATIONS ARE STATED TO RUN FROM OUTRIGHT REQUIREMENTS OF LAW IN SOME COUNTRIES TO LEGAL PROCEDURES IN OTHERS WHICH, ALTHOUGH NOT MAKING INSURANCE COVERAGE AN ABSOLUTE REQUIREMENT, RESULT IN EXTREME DIFFICULTY TO DRIVERS AND PASSENGERS EVEN WHEN APPARENTLY FREE OF ACTUAL RESPONSIBILITY IN THE CIRCUMSTANCES OF AN ACCIDENT. MOROCCO AND FRANCE WERE CITED AS COUNTRIES WHICH REQUIRE THIRD-PARTY LIABILITY INSURANCE BY LAW. MEXICO WAS CITED AS A COUNTRY WHERE THE BURDENS UPON PERSONS INVOLVED IN ACCIDENTS WHILE DRIVING UNINSURED VEHICLES ARE EXTREME. WAS POINTED OUT THAT THEY MAY BE DETAINED INDEFINITELY IN THE JURISDICTION WHERE THE ACCIDENTS OCCUR, ESPECIALLY IN THE ABSENCE OF PROOF OF FINANCIAL RESPONSIBILITY AND THAT IN MOST INSTANCES, SUCH PROOF TO MEXICAN AUTHORITIES MEANS, AT THE VERY LEAST, POSSESSION OF A VALID MEXICAN INSURANCE POLICY WITH A RECOGNIZED COMPANY. IT WAS FURTHER POINTED OUT THAT THIS INTERPRETATION IS SO STRICT THAT POSSESSION OF A VALID UNITED STATES INSURANCE POLICY, FOR INSTANCE, IS PRACTICALLY USELESS AND THAT IN VIEW OF PROCEDURES FOR HANDLING CLAIMS TO MEXICO, MOST UNITED STATES COMPANIES NO LONGER WRITE SUCH POLICIES. FINALLY, IT WAS STATED THAT AN OFFICIAL OF THE UNITED STATES EMBASSY REPORTED THAT SUCH INSURANCE IS DESIRABLE FROM THE STANDPOINT OF INTERNATIONAL RELATIONS AND FOR PROMPT SETTLEMENT OF CLAIMS ACCORDING TO THE LAW AND CUSTOM OF THE HOST COUNTRY.

IN ADDITION, IT WAS POINTED OUT THAT UNDER IRANIAN LAWS, A GOVERNMENT VEHICLE IS NOT CONSIDERED AS AN AMERICAN GOVERNMENT CAR BUT AS A PRIVATE PERSONAL VEHICLE, THE DRIVER BEING RESPONSIBLE AND LIABLE FOR ANY ACCIDENT, AND THAT THE ITALIAN FOREIGN OFFICE HAS REQUESTED THAT ALL OFFICIAL UNITED STATES GOVERNMENT-OWNED CARS AND CARS OWNED BY EMBASSY PERSONNEL CARRY A MINIMUM OF $25,000 THIRD-PARTY LIABILITY.

IT IS STATED THAT IN THESE AND MANY OTHER INSTANCES THE EMPLOYEES OF THE DEPARTMENT OF AGRICULTURE ARE COMPELLED TO OBTAIN INSURANCE AT THEIR EXPENSE ON GOVERNMENT VEHICLES USED BY THEM ON OFFICIAL BUSINESS ONLY; THAT WITHOUT SUCH INSURANCE THE PROGRAMS OF THE DEPARTMENT WOULD BE HAMPERED; AND THAT SINCE THE PROVISIONS OF THE FEDERAL TORT CLAIMS ACT ARE INAPPLICABLE TO CLAIMS ARISING IN FOREIGN COUNTRIES, 28 U.S.C. 2680 (K), EMPLOYEES WOULD BE FORCED TO BEAR THE FULL IMPACT OF JUDGMENTS IN ACCIDENT CASES ARISING OUT OF THE PERFORMANCE OF OFFICIAL DUTIES.

SECTION 3 (A) OF THE ACT OF AUGUST 1, 1956, 70 STAT. 890, 5 U.S.C. 170H (A), PROVIDES THAT:

THE SECRETARY OF STATE IS AUTHORIZED TO OBTAIN INSURANCE ON OFFICIAL MOTOR VEHICLES OPERATED BY THE DEPARTMENT OF STATE IN FOREIGN COUNTRIES, AND PAY THE EXPENSES INCIDENT THERETO.

AND THE DEPARTMENT OF AGRICULTURE AND FARM CREDIT ADMINISTRATION APPROPRIATION ACT, 1958, 71 STAT. 329, PROVIDES UNDER THE HEADING " FOREIGN AGRICULTURAL SERVICE: "

FOR NECESSARY EXPENSES FOR THE FOREIGN AGRICULTURAL SERVICE * * * PROVIDED FURTHER, THAT PROVISIONS OF THE ACT OF AUGUST 1, 1956 (70 STAT. 890-892), AND PROVISIONS OF A SIMILAR NATURE IN APPROPRIATION ACTS OF THE DEPARTMENT OF STATE FOR THE CURRENT AND SUBSEQUENT FISCAL YEARS WHICH FACILITATE THE WORK OF THE FOREIGN SERVICE SHALL BE APPLICABLE TO FUNDS AVAILABLE TO THE FOREIGN AGRICULTURAL SERVICE.

ALTHOUGH THE QUOTED PROVISO WAS NOT CARRIED FORWARD IN THE APPROPRIATION ACT FOR FISCAL YEAR 1959, THERE IS NO QUESTION THAT IT IS PERMANENT LEGISLATION. SEE PAGE 2210 OF THE HEARINGS BEFORE THE SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, ON DEPARTMENT OF AGRICULTURE APPROPRIATIONS FOR 1959.

ACCORDINGLY, IT IS CLEAR, WITH RESPECT TO ACTIVITIES OF THE FOREIGN AGRICULTURAL SERVICE, THAT APPROPRIATIONS OF THAT SERVICE ARE AVAILABLE FOR THE PURCHASE OF INSURANCE COVERAGE FOR ITS VEHICLES LOCATED IN FOREIGN COUNTRIES.

HOWEVER, CONCERNING VEHICLES OF THE AGRICULTURAL RESEARCH SERVICE IN FOREIGN COUNTRIES, WHICH VEHICLES ARE NOT COVERED BY THE ABOVE AUTHORITY, IT IS THE SETTLED POLICY OF THE UNITED STATES, AS RECOGNIZED IN REFERENCE LETTER, TO ASSUME ITS OWN RISKS OF LOSS. HENCE, APPROPRIATED MONEYS OF THE UNITED STATES GENERALLY ARE NOT AVAILABLE, IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORIZATION, FOR PAYMENT OF INSURANCE PREMIUMS. SEE 13 COMP. DEC. 779; 4 COMP. GEN. 690; 17 ID. 419; 19 ID. 211; ID. 798; 21 ID. 928. IT IS POINTED OUT IN REFERENCE LETTER, HOWEVER, THAT THE GENERAL POLICY OF THE GOVERNMENT ASSUMING ITS OWN RISK OF LOSS APPEARS TO BE BASED ON MONETARY CONSIDERATIONS INVOLVING SITUATIONS IN THE UNITED STATES. THEREFORE, IN THE ABSENCE OF ANY SPECIFIC STATUTORY PROHIBITION AGAINST PAYMENT OF INSURANCE PREMIUMS, WHERE FACTORS OTHER THAN MONETARY CONSIDERATIONS ARE INVOLVED, SUCH AS RELATED ABOVE, QUESTION IS RAISED AS TO WHETHER OTHER APPROPRIATED FUNDS OF THE DEPARTMENT OF AGRICULTURE MAY BE EXPENDED FOR INSURANCE IN ANY FOREIGN COUNTRY IN WHICH THE STATE DEPARTMENT PROVIDES INSURANCE ON ITS OWN VEHICLES OR OTHERWISE DECLARES THAT SUCH INSURANCE IS NECESSARY. IT IS FURTHER POINTED OUT THAT RISKS IN THOSE CASES GO BEYOND LOSS OR DAMAGE TO GOVERNMENT PROPERTY AND AFFECT THE EFFICIENT ADMINISTRATION OF DEPARTMENTAL PROGRAMS AND THE EFFECTIVENESS OF THE MISSION IN A PARTICULAR COUNTRY AND THAT, MOREOVER, THERE ARE SERIOUS RISKS INVOLVED FOR EMPLOYEES BEYOND MONETARY CLAIMS, SUCH AS CONFINEMENT, IMPRISONMENT, AND OTHER PENALTY.

THE CONGRESS HAS RECOGNIZED THAT SPECIFIC STATUTORY AUTHORITY IS REQUIRED TO OVERCOME THE POLICY AGAINST THE EXPENDITURE OF APPROPRIATED MONEYS FOR INSURANCE. IN SENATE REPORT NO. 1175, 84TH CONGRESS, ST SESSION, THE COMMITTEE ON FOREIGN RELATIONS REPORTED WITH RESPECT TO SECTION 3 (A) OF S. 2569--- WHICH ULTIMATELY WAS ENACTED IN AMENDED FORM AS SECTION 3 (A) OF THE ACT OF AUGUST 1, 1956, 70 STAT. 890--- AS FOLLOWS:

LAWS IN SOME FOREIGN COUNTRIES REQUIRE THAT INSURANCE BE CARRIED ON ALL MOTOR VEHICLES BEING OPERATED IN THOSE COUNTRIES. THE ABOVE PROVISION IS NECESSARY AS THE COMPTROLLER GENERAL OF THE UNITED STATES HAS CONSISTENTLY RULED THAT FUNDS OF A GOVERNMENT AGENCY MAY NOT BE EXPENDED, IN THE ABSENCE OF STATUTORY AUTHORITY TO PURCHASE INSURANCE TO COVER THE GOVERNMENT'S POSSIBLE TORT LIABILITY (19 COMP. GEN. 798).

THE ABOVE PROVISION IS NECESSARY TO SAVE THIS GOVERNMENT FROM THE EMBARRASSMENT OF BEING UNABLE TO COMPLY WITH LOCAL REGULATIONS.

THE COMMITTEE ON FOREIGN AFFAIRS OF THE HOUSE OF REPRESENTATIVES IN REPORT NO. 2508, 84TH CONGRESS, 2D SESSION, REPORTED ON SECTION 3 (A) AS IT APPEARS IN THE ACT AS FOLLOWS:

SPECIFIC AUTHORITY IS REQUIRED UNDER A RULING OF THE COMPTROLLER GENERAL (19 COMP. GEN. 798) WHICH STATES THAT IN THE ABSENCE OF STATUTORY AUTHORITY A GOVERNMENT AGENCY MAY NOT USE APPROPRIATED FUNDS TO COVER A POSSIBLE TORT LIABILITY OF THE GOVERNMENT.

UNDER THIS PROVISION THE SECRETARY (OF STATE) MAY OBTAIN INSURANCE NOT ONLY IN THOSE COUNTRIES WHERE REQUIRED BY LAW OF THE COUNTRY BUT ALSO IN THOSE COUNTRIES WHERE THE POLICY OF THE FOREIGN OFFICE OR REGULATION OF LOCAL AUTHORITY MAKE IT DESIRABLE IN THE INTERESTS OF THE UNITED STATES TO COMPLY WITH SUCH POLICY OR REGULATION.

THE AUTHORITY TO PURCHASE INSURANCE COVERING VEHICLES OF AGENCIES OF YOUR DEPARTMENT LOCATED IN FOREIGN COUNTRIES WAS GRANTED BY THE CONGRESS ONLY WITH RESPECT TO ACTIVITIES OF THE FOREIGN AGRICULTURAL SERVICE. MOREOVER, THE AUTHORITY GRANTED THE DEPARTMENT OF STATE AND, BY EXTENSION, THE FOREIGN AGRICULTURAL SERVICE IN THIS REGARD WAS APPARENTLY BASED UPON CONSIDERATIONS SIMILAR TO THOSE RECITED ABOVE, AND CONGRESS HAS NOT INCLUDED THE AGRICULTURAL RESEARCH SERVICE UNDER SUCH AUTHORITY. THE FACT THAT CONGRESS AUTHORIZED THE PROCUREMENT OF INSURANCE BY ONLY ONE AGENCY OF YOUR DEPARTMENT WOULD INDICATE THAT OTHER APPROPRIATED MONEYS OF YOUR DEPARTMENT ARE NOT AVAILABLE FOR THE PAYMENT OF INSURANCE PREMIUMS.

ACCORDINGLY, WHILE WE APPRECIATE THAT CONDITIONS MIGHT EXIST WHICH WOULD MAKE IT ADVANTAGEOUS FOR OTHER AGENCIES OF YOUR DEPARTMENT ENGAGED IN OVERSEAS ACTIVITIES TO PURCHASE SUCH INSURANCE, IT MUST BE HELD AS A MATTER OF LAW THAT THERE IS NO AUTHORITY FOR THE EXPENDITURE OF APPROPRIATIONS OF YOUR DEPARTMENT--- OTHER THAN THOSE FOR ACTIVITIES OF THE FOREIGN AGRICULTURAL SERVICE--- TO PURCHASE INSURANCE COVERAGE FOR VEHICLES. WHERE THE CIRCUMSTANCES ARE SUCH AS WE WOULD REQUIRE IN THE INTERESTS OF THE GOVERNMENT THAT INSURANCE POLICIES BE PROCURED, IT WOULD APPEAR THAT JUSTIFICATION OF SUCH NEED SHOULD BE PRESENTED TO THE CONGRESS AND AUTHORIZING LEGISLATION SOUGHT.