oversight

United Nations: Status of U.S. Contributions and Arrears

Published by the Government Accountability Office on 1999-07-28.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                   United States General Accounting Office

GAO                Report to the Chairman, Committee on
                   International Relations, House of
                   Representatives


July 1999
                   UNITED NATIONS

                   Status of U.S.
                   Contributions and
                   Arrears




GAO/NSIAD-99-187
United States General Accounting Office                                                               National Security and
Washington, D.C. 20548                                                                         International Affairs Division



                                    B-282243                                                                                  Letter

                                    July 28, 1999

                                    The Honorable Benjamin Gilman
                                    Chairman, Committee on International Relations
                                    House of Representatives

                                    Dear Mr. Chairman:

                                    For several years the United States has been in arrears in the payment of its
                                    assessed contributions for the U.N. regular budget, international tribunals,
                                    and peacekeeping operations. Assessed contributions—which are levied
                                    on U.N. members to fund the organization’s activities—are considered to
                                    be in arrears if unpaid by December 31 of the year they came due. Article
                                    19 of the U.N. Charter states that a member shall lose its right to vote in the
                                    U.N. General Assembly if the amount of its arrears equals or exceeds the
                                    amount of its assessed contributions for the preceding 2 years.

                                    You were concerned that the United States could lose its right to vote on
                                    January 1, 2000, unless it reduces its arrears before the end of 1999. As you
                                    requested, this report (1) estimates the amount the United States will need
                                    to pay before the end of 1999 to avoid losing its right to vote, taking into
                                    account currently anticipated payments; (2) discusses the trend in U.S.
                                    assessed contributions and arrears that has led to the current situation; (3)
                                    discusses current U.S. arrears and the amounts withheld for legislative and
                                    policy reasons; and (4) describes the status of member states that lost their
                                    right to vote in the General Assembly at the beginning of 1999. This report
                                    updates information contained in our prior report to you on U.N. financial
                                    issues and U.S. arrears. 1



Results in Brief                    We estimate that the United States will need to pay about $153 million in
                                    addition to the $508 million that the Department of State currently
                                    anticipates paying before the end of 1999 to reduce its arrears sufficiently
                                    to avoid losing its right to vote in the General Assembly on January 1, 2000.
                                    Our estimate reflects the difference between projected U.S. arrears on that
                                    date of $1,435 million and projected assessed contributions for the
                                    preceding 2 years (1998 and 1999) of $1,282 million. Anticipated U.S.

                                    1
                                     United Nations: Financial Issues and U.S. Arrears (GAO/NSIAD-98-201BR, June 18, 1998).




                   Leter            Page 1                                                        GAO/NSIAD-99-187 United Nations
        B-282243




        payments during 1999 consist of $3 million from fiscal year 1998 funds,
        $301 million from fiscal year 1999 funds, and $204 million from fiscal year
        2000 funds.2 The Department of State has requested congressional
        authorization to reprogram $66 million of fiscal year 1999 funds to pay
        expected additional assessments for the U.N. peacekeeping operations in
        Kosovo and East Timor recently authorized by the U.N. Security Council.
        Payment of this amount would reduce our estimate of the needed
        additional U.S. payment to $87 million. Changes in these assumptions or
        U.N. financial needs during the remainder of 1999, particularly changes in
        the amount of peacekeeping assessments that the United States pays,
        would affect our estimate.

        The United States faces the loss of its vote in the General Assembly in
        January 2000 because the sum of its assessed contributions for the prior
        2 years—the “yardstick” for measuring U.S. arrears when applying article
        19—has declined each year since 1996. This decline largely reflects a
        decrease in assessments for U.N. peacekeeping operations since 1995. In
        essence, the United States now faces the loss of its right to vote in the
        General Assembly because its assessed contributions are substantially less
        than in 1996 while its arrears have remained about the same. This explains
        why, with basically the same level of arrears as in past years, the United
        States narrowly avoided losing its right to vote on January 1, 1999, and will
        lose its right to vote on January 1, 2000, unless it reduces its arrears.
        Figure 1 shows the decline in U.S. assessed contributions for the prior 2
        years relative to U.S. arrears on January 1, 1996-2000.




        2
         The anticipated payment from fiscal year 2000 funds assumes that Congress will appropriate the
        $304 million requested for payment of the U.N. regular budget for 1999, subject to a $100 million
        withholding pending executive branch certification that the U.N.’s biennium regular budget remains
        below $2.533 billion. The United States has paid its calendar year assessments with funds appropriated
        for the following fiscal year since 1983.




Leter   Page 2                                                         GAO/NSIAD-99-187 United Nations
                                               B-282243




Figure 1: Comparison of U.S. Assessed Contributions for the United Nations for the Prior 2 Years and U.S. Arrears on January 1,
1996-2000
Dollars in millions
$3 ,00 0      $2,643


$2 ,50 0
                                   $2,098


$2 ,00 0
                                                          $1,480                                                     $1,435
                                              $1,303                  $1,313      $1,320     $1,294     $1,282
$1 ,50 0                $1,231



$1 ,00 0


  $5 00


     $0
                19 96                 19 97                   19 98                  19 99                20 00 (e st)
                                                        C a len d ar ye ar


                          A sse sse d co ntrib utio ns fo r prior 2 ye a rs        A rrea rs b alance
                                               Note: Article 19 of the U.N. Charter states that a member shall lose its right to vote in the U.N. General
                                               Assembly if its arrears balance exceeds its assessed contributions for the prior 2 years. Estimated
                                               arrears balance for 1999 assumes that the Department of State will make all currently anticipated
                                               payments before the end of 1999, including a $204 million payment from fiscal year 2000 funds.
                                               Source: Compiled by GAO from U.N. and Department of State financial data.


                                               As reflected in figure 1, U.N. records showed that U.S. arrears for the
                                               regular budget, international tribunals, and peacekeeping operations were
                                               $1,294 million on January 1, 1999. This amount accounted for about
                                               64 percent of the $2 billion of arrears owed by U.N. members on that date
                                               for the U.N. regular budget, international tribunals, and peacekeeping
                                               operations. Of its $1,294 million of arrears, the United States has
                                               determined it will not pay $472 million (about 36 percent) for legislative
                                               and policy reasons.

                                               In February 1999, the United Nations reported that 44 of 185 U.N. members
                                               had arrears equaling or exceeding their assessed contributions for the
                                               preceding 2 full years as of January 1, 1999. As of mid-May, six of these



                                               Page 3                                                            GAO/NSIAD-99-187 United Nations
             B-282243




             members had paid enough to regain their right to vote in the U.N. General
             Assembly; and eight others were permitted to vote temporarily, because
             their failure to pay was judged to be due to conditions beyond their control,
             such as civil war or severe natural disasters. The remaining 30 members
             lost the right to vote in the General Assembly. Based on past experience,
             the Chief of the U.N. Contributions Service expects that, by the end of the
             year, most of the remaining members will make at least the minimum
             payment necessary to regain their right to vote in the General Assembly.



Background   Article 17 of the U.N. Charter states that the U.N.’s expenses shall be borne
             by its members as apportioned by the General Assembly. Basic U.N.
             operations, including most headquarters activities, are funded through
             regular budget assessments paid by member states. Currently, the United
             States is assessed at a rate of 25 percent for the U.N. regular budget.
             Member states are assessed separately—and at different rates—for the
             budgets of international criminal tribunals3 and U.N. peacekeeping
             operations. Currently, the United States is assessed at an average rate of
             27.7 percent of the amount budgeted for international tribunals4 and about
             30.4 percent of the amount budgeted for peacekeeping operations.5
             Regular budget assessments are due on January 31 of each year and
             assessments for international tribunals and peacekeeping operations are
             due within 30 days of the date they are billed. These assessed
             contributions are considered to be in arrears if unpaid by December 31 of
             the year they came due. Table 1 shows U.N. assessments for the U.N.
             regular budget, international tribunals, and peacekeeping operations for
             the 10 largest contributors for 1999, as of June 30, 1999.




             3
              The United Nations has established international criminal tribunals for the former Yugoslavia and
             Rwanda to investigate and prosecute persons responsible for genocide and other serious violations of
             international humanitarian law committed in those regions.
             4
              The United States is assessed at the regular budget rate (25 percent) for one-half of the tribunals’
             budgets and at the peacekeeping rate (currently about 30.4 percent) for the other half, for an average
             rate of about 27.7 percent.
             5
               U.S. payments for U.N. peacekeeping after fiscal year 1995 are capped at 25 percent of the total of all
             assessed contributions for an operation under Section 404(b)(2) of the Foreign Relations Authorization
             Act of 1994-95 (P.L.103-236). The United Nations, however, continues to assess the U.S. at the higher
             rate because the U.N. General Assembly has not changed its methodology for calculating the U.S. and
             other members’ peacekeeping assessment rates.




             Page 4                                                           GAO/NSIAD-99-187 United Nations
B-282243




Table 1: U.N. Assessments for the Regular Budget, International Tribunals, and
Peacekeeping Operations for 1999, as of June 30, 1999

Dollars in millions
                                        Regular      International   Peacekeeping
Member state                             budget          tribunals     operationsa       Total
United States                             $304.4            $45.3            $72.4     $422.1
Japan                                      207.7             30.3             44.9      282.8
Germany                                    101.9             14.9             22.4      139.2
France                                       68.0            11.0             15.2        94.1
Italy                                        56.4             8.2             12.4        77.1
United Kingdom                               52.9             8.5             14.2        75.6
Canada                                       28.6             4.2              6.4        39.1
Spain                                        26.9             3.9              5.9        36.8
Netherlands                                  16.9             2.5              3.7        23.2
Russian Federation                           15.5             2.5              4.9        22.9
All others                                 204.6             23.6             29.6      257.8
Total                                   $1,083.7           $154.8           $232.1    $1,470.7
a
    Partial year assessment through June 30, 1999.
Source: United Nations.


Article 19 of the U.N. Charter states that a member will lose its right to vote
in the General Assembly if the amount of its arrears equals or exceeds the
sum of its assessed contributions for the preceding 2 full years. The
General Assembly may, nevertheless, permit such a member to vote if it
judges that the member’s failure to pay was due to conditions beyond its
control. A member regains its right to vote as soon as it reduces its arrears
below the level of its assessed contributions for the preceding 2 years. A
member’s loss of its right to vote in the General Assembly does not affect
its right to vote in the U.N. Security Council or in several U.N. specialized
agencies.

Although article 19 specifies that a member state’s arrears must not exceed
its assessed contributions for the prior 2 years, it does not specify how the
amount of a member’s arrears and assessed contributions should be
calculated or the timing of the calculation and application of the sanction
(loss of vote). In practice, a member state is considered to be subject to
article 19 if its arrears as of January 1 of a given year equal or exceed the
amount of its assessed contributions for the preceding 2 full calendar
years. (See app. I for additional details about the calculation of arrears and
assessed contributions under article 19.)



Page 5                                                         GAO/NSIAD-99-187 United Nations
                      B-282243




Our Estimate of the   We estimate that the United States will need to pay about $153 million in
                      addition to currently anticipated payments of $508 million before the end of
U.S. Shortfall        1999 to reduce its arrears sufficiently to avoid losing its right to vote in the
                      General Assembly on January 1, 2000. Our estimate of this shortfall reflects
                      the difference between a projected arrears balance on January 1, 2000, of
                      $1,435 million and projected assessed contributions for 1998 and 1999 of
                      $1,282 million (see table 2). Changes in these assumptions or U.N. financial
                      needs during the remainder of 1999, particularly changes in the amount of
                      peacekeeping assessments that the United States receives and pays, could
                      affect our estimate.



                      Table 2: Estimated U.S. Contributions Shortfall on January 1, 2000

                      Dollars in millions
                                                                                                         Amount
                      U.S. assessed contributions due through 1999 (estimated)                            $1,963
                        Arrears (outstanding contributions for 1998 and prior periods)                    (1,294)
                        1999 assessed contributions (estimated)                                             (669)
                      Less estimated payments during 1999                                                   $508
                        Fiscal year 2000 appropriations (estimated)                                         (204)
                        Fiscal year 1999 appropriations (estimated)                                         (301)
                        Fiscal year 1998 appropriations                                                       (3)
                      Less U.N. credits (estimated)                                                           20
                      Subtotal (projected arrears balance on January 1, 2000)                             $1,435
                      Less projected assessed contributions due for most recent 2-year                    $1,282
                      period
                        1998 assessed contributions                                                         (613)
                        1999 assessed contributions (estimated)                                             (669)
                      Estimated shortfall on January 1, 2000                                                $153
                      Source: Compiled by GAO from U.N. and Department of State financial data.


                      The projected arrears balance on January 1, 2000, shown in table 2 reflects
                      anticipated payments before the end of 1999 of $3 million from fiscal year
                      1998 funds, $301 million from fiscal year 1999 funds, and $204 million from
                      fiscal year 2000 funds; and credits that the United States may receive for
                      unspent contributions to U.N. peacekeeping. Anticipated U.S. payments
                      during 1999 are comprised of the following elements:




                      Page 6                                                      GAO/NSIAD-99-187 United Nations
B-282243




• $100 million in fiscal year 1999 funds appropriated to pay assessed
  contributions for the 1998 U.N. regular budget,6
• $41 million in fiscal year 1999 funds appropriated to pay assessed
  contributions for the international tribunals in Yugoslavia and Rwanda,7
• $160 million in fiscal year 1999 funds8 and $3 million in fiscal year 1998
  funds appropriated to pay assessed contributions for U.N. peacekeeping
  operations,9 and
• $204 million in fiscal year 2000 funds that the Department of State
  anticipates will be appropriated to pay assessed contributions for the
  1999 U.N. regular budget.

In addition to these payments, the Department of State estimates that the
United States will receive about $20 million in credits from the United
Nations by the end of 1999, as shown in table 2. These credits are for
unspent balances from U.S. payments toward U.N. peacekeeping
operations in prior financial periods.10

The projected assessed contributions for the most recent 2-year period
shown in table 2—the “yardstick” for measuring U.S. arrears when applying
article 19 on January 1, 2000—is the sum of expected U.S. assessed
contributions for 1998 and 1999 for the U.N. regular budget, international
tribunals for Yugoslavia and Rwanda, and U.N. peacekeeping operations.
Table 3 shows the calculation of the projected U.S. assessed contributions
for the 2-year period ending on January 1, 2000.




6
  These funds are available in two parts of $50 million each, subject to executive branch certification in
spring and summer 1999 that the U.N. 1998-1999 regular budget will not exceed $2.533 billion. The
United States paid the balance of fiscal year 1999 funds appropriated for the U.N. regular budget (about
$198 million) in late 1998 to avoid a contribution shortfall and loss of vote on January 1, 1999. The U.N.
budget certification requirement is contained in the Fiscal Year 1999 Commerce, State, and the
Judiciary Appropriations Act as contained in the Fiscal Year 1999 Omnibus Appropriations Act
(P.L. 105-277).
7
  This amount is comprised of about $25 million for the tribunal for the former Yugoslavia and
$16 million for the tribunal for Rwanda.
8
 Congress appropriated $231 million in fiscal year 1999 for payments for contributions to international
peacekeeping activities.
9
The fiscal year 1998 funds were a payment for the U.N. Observation Mission in Sierra Leone made in
March 1999.
10
    The United Nations refers to these as “unencumbered balances.”




Page 7                                                            GAO/NSIAD-99-187 United Nations
                                          B-282243




Table 3: Estimated U.S. Assessed Contributions for the 2-Year Period Ending on January 1, 2000

Dollars in millions
                                                     Regular             International              Peacekeeping
Period                                                budget                 tribunals                 operations                           Total
1998 assessed contributions                              $298                        $30                        $285                        $613
1999 assessed contributions (estimated)                    304                        45                         320                          669
2-year total (estimated)                                 $602                        $75                        $605                      $1,282
                                          Note: 1999 assessments are estimated through December 31, 1999. As of June 30, 1999, the United
                                          States had been assessed $304 million for the regular budget, $45 million for international tribunals,
                                          and about $72 million for peacekeeping operations.
                                          Source: Compiled by GAO from U.N. and Department of State financial data.


                                          According to Department of State officials, potential sources of funding to
                                          cover the shortfall include $575 million in fiscal year 1998 and 1999 funds
                                          appropriated for arrears reduction contingent on congressional
                                          authorization and/or $446 million included in the President’s fiscal year
                                          2000 budget request for arrears payment. Congress would need to enact
                                          new legislation for the Department of State to reduce U.S. arrears using any
                                          of these funds.11


Estimate Would Be Affected                The estimated shortfall of about $153 million assumes that, during 1999, the
by Changes in U.S.                        United States will be assessed a total of $669 million for the U.N. regular
                                          budget, international tribunals, and peacekeeping; make payments against
Payments                                  those assessed contributions of $508 million; and receive credits of $20
                                          million. Changes in the amount of U.S. payments or U.N. credits would
                                          alter the estimated shortfall. Of these two items, the amount of U.S.
                                          payments for assessed contributions for U.N. peacekeeping is most
                                          susceptible to change during the rest of the year, according to Department




                                          11
                                            Congress appropriated $100 million in fiscal year 1998 and $475 million in fiscal year 1999 to pay U.N.
                                          arrears contingent on authorization language. However, the President vetoed the fiscal year 1998-99
                                          Department of State authorization bill (H.R. 1757), and the Fiscal Year 1999 Omnibus Appropriations
                                          Act (P.L. 105-277) continued to make arrears payments contingent on authorization language. The
                                          President’s fiscal year 2000 budget requests an additional $446 million to pay arrears. The Balanced
                                          Budget Act of 1997 (P.L. 105-33) allows federal budget spending caps to be adjusted to accommodate
                                          appropriations for arrears payments through fiscal year 2000.




                                          Page 8                                                           GAO/NSIAD-99-187 United Nations
B-282243




of State officials.12 As shown in table 3, our estimate assumes that the
United States will be assessed about $320 million for peacekeeping in 1999,
including about $80 million for the U.N. operations in Kosovo and East
Timor recently authorized by the U.N. Security Council. As of June 30,
1999, the United States had been assessed $72.4 million for peacekeeping
for 1999.

U.S. payments could change substantially in response to changes in
assessed contributions for U.N. peacekeeping. Additional U.S. payments
during 1999 in response to increased U.N. assessments would decrease the
estimated shortfall by the amount of the additional payment. 13 In June
1999, the Department of State requested congressional authorization to
reprogram $66 million of fiscal year 1999 funds to pay for the recently
authorized U.N. operations in Kosovo and East Timor. Payment of this
amount during 1999 would reduce the estimated shortfall from about
$153 million to $87 million. In contrast, decreased U.S. payments in
response to a reduction in expected U.N. assessments for other operations
would increase the estimated shortfall.

Peacekeeping assessments could increase substantially over those
assumed in our estimate for several reasons. First, the U.N. Security
Council could authorize additional operations later this year, for example, a
follow-on operation in East Timor,14 or expand existing operations, for
example, the ongoing operation in Sierra Leone. Second, the timing and
amount of assessments for the newly authorized U.N. operation in Kosovo
could increase substantially. The Department of State’s reprogramming
notice to Congress estimates that this new operation will cost about
$500 million annually and assumes that the United Nations will assess
member states for half of this amount during 1999. However, according to
Department of State officials, the United Nations could assess member
states for the entire annual cost in 1999. In addition, these officials told us

12
  Department of State officials are confident that actual credits received for unspent peacekeeping
balances will not vary substantially from their estimate. However, we note that the United States
received an unexpected $42 million credit in July 1998 for unspent balances from prior financial periods
for U.N. peacekeeping operations. Increased credits would reduce the estimated shortfall dollar for
dollar; decreased credits would have the reverse effect.
13
 As of early June 1999, about $71 million of the $231 million of fiscal year 1999 funds appropriated for
contributions for international peacekeeping activities were available to pay additional peacekeeping
assessments. Additional payments above this amount would require additional appropriations.
14
  According to Department of State officials, a follow-on U.N. operation would be likely if East Timor
moves toward independence from Indonesia. In addition, the U.N. Security Council could authorize
new peacekeeping operations in the Democratic Republic of Congo or Eritrea/Ethiopia.




Page 9                                                           GAO/NSIAD-99-187 United Nations
                       B-282243




                       that the operation’s annual cost could be as high as $800 million to
                       $1 billion.

                       Peacekeeping assessments also could decrease substantially from those
                       assumed in our estimate if, for example, the Security Council ended some
                       operations earlier than expected—as it recently did for the operation in
                       Angola—or shortened their mandates—as it recently did for the operation
                       in the Western Sahara. According to the U.N. Under Secretary General for
                       Management, forecasting needs for peacekeeping operations is very
                       difficult because the levels of assessments change, the frequency of
                       assessments is unpredictable, the timing of the receipt of credits of unspent
                       funds from closed operations is uncertain, and the troop and equipment
                       requirements change.



Assessed               The sum of U.S. assessed contributions for the prior 2 calendar years—the
                       “yardstick” for measuring U.S. arrears when applying article 19 each year—
Contributions          declined by about $1.4 billion between 1996 and 2000. Over the same
“Yardstick” Declines   period, U.S. arrears as calculated by the United Nations remained relatively
                       stable, increasing by $138 million. The decline in U.S. assessed
                       contributions explains why, despite basically the same level of arrears, the
                       United States narrowly avoided losing its right to vote in the General
                       Assembly in 1999 and faces the loss of its right to vote in 2000.

                       On January 1, 1996, the sum of U.S. assessed contributions for the prior
                       2 years (1994 and 1995) was about $2.6 billion. By January 1, 2000, we
                       estimate that the sum of U.S. assessed contributions for the prior 2 years
                       (1998 and 1999) will have fallen to about $1.3 billion. This decline largely
                       reflects a decrease in assessments for U.N. peacekeeping operations
                       between 1995 and 1999, from about $1 billion to an estimated
                       $320 million.15 Peacekeeping assessments have declined because the U.N.
                       Security Council has approved fewer and/or smaller peacekeeping
                       operations in recent years.16 Figure 2 shows U.S. assessments for the U.N.


                       15
                         The decline is assessments reflects the substantial fall in the number of U.N. peacekeepers in the field
                       over the same period—from almost 70,000 in early 1995 to about 12,500 by the end of May 1999.
                       16
                         U.S. policy on authorizing U.N. peacekeeping operations is discussed in Presidential Decision
                       Directive-25, a classified document issued in May 1994. An unclassified summary was issued at the
                       same time. Among the factors to be considered under this directive in deciding to authorize or continue
                       operations are whether (1) U.N. involvement advances U.S. interests; (2) there is a threat to or breach
                       of international peace and security; and (3) the operation has clear and practical objectives, a mandate
                       appropriate to its mission, realistic exit criteria, and an identified end point for U.N. involvement.




                       Page 10                                                          GAO/NSIAD-99-187 United Nations
                                             B-282243




                                             regular budget, international tribunals, and peacekeeping operations
                                             between 1994 and 1999.



Figure 2: U.S. Assessments for the U.N. Regular Budget, International Tribunals, and Peacekeeping Operations, 1994-99

Dollars in millions
$1 ,20 0
            $1,020           $1,003

$1 ,00 0


  $8 00


  $6 00
                                                  $444
                                                                    $386
  $4 00         $298             $315                $321                 $312                             $320 $304
                                                                                       $285 $298


  $2 00
                                                                                                  $30              $45
                     $0               $7                   $8                $10

     $0
             19 94            19 95                19 96             19 97                19 98           19 99 (e st)
                                                     C a len d ar ye ar


                 P ea ce kee p ing op era tions          Reg ular bud ge t       Inte rna tiona l trib unals
                                             Source: Compiled by GAO from U.N. and Department of State financial data.


                                             In contrast, U.S. arrears have been relatively stable between 1996 and 2000,
                                             increasing from about $1.2 billion to an estimated $1.4 billion. 17 This
                                             increase reflects both the difference between the higher U.N. assessment
                                             rate and the lower U.S. payment rate for peacekeeping and U.S. decisions
                                             not to pay its assessed contributions for certain U.N. operations, such as
                                             the current U.N. operation in the Central African Republic—although the
                                             U.S. voted in favor of authorizing this operation in the U.N. Security
                                             Council.



                                             17
                                              U.S. arrears increased by $762 million between 1995 and 1996, from $469 million to $1,231 million.




                                             Page 11                                                           GAO/NSIAD-99-187 United Nations
                                           B-282243




                                           Table 4 shows the decline in assessed contributions for the prior 2 years
                                           relative to U.S. arrears on January 1, 1996-2000. As depicted, the United
                                           States narrowly avoided losing its right to vote on January 1, 1999, and will
                                           lose its right to vote on January 1, 2000, unless it reduces its arrears.



Table 4: Comparison of U.S. Assessed Contributions for the United Nations for the Prior 2 Years and the U.S. Arrears on
January 1, 1995-2000

Dollars in millions
                                                                                            Calendar year
                                                                  1996              1997              1998              1999     2000 (estimated)
Assessed contributions for prior 2 years                       $2,643            $2,098             $1,480            $1,320                  $1,282
Arrears balance                                                  1,231             1,303             1,313             1,294                   1,435
Difference (shortfall)                                         $1,412               $795              $167               $26                  ($153)
                                           Note: Article 19 of the U.N.. Charter states that a member shall lose its right to vote in the U.N. General
                                           Assembly if its arrears balance exceeds its assessed contributions for the prior 2 years. Estimated
                                           arrears balance for 1999 assumes that the Department of State will make all currently anticipated
                                           payments before the end of 1999, including a $204 million payment from fiscal year 2000 funds.
                                           Source: Compiled by GAO from U.N. and Department of State financial data.




Analysis of U.S.                           As reflected in table 4, U.N. records show that U.S. arrears for
                                           contributions to the U.N. regular budget, international tribunals, and
Arrears                                    peacekeeping were about $1.3 billion on January 1, 1999. This amount
                                           accounted for about 64 percent of the $2 billion of arrears owed by U.N.
                                           members on that date for the U.N. regular budget, international tribunals,
                                           and peacekeeping operations. For legislative and policy reasons, the
                                           United States has determined it will not pay $472 million (about 36 percent)
                                           of its total arrears of about $1.3 billion. As of December 31, 1998, the
                                           United Nations owed about $1.1 billion to member states for their
                                           participation in U.N. peacekeeping operations.


U.S. Arrears for the U.N.                  U.N. records showed that, on January 1, 1999, the United States was in
Regular Budget                             arrears $316 million for assessed contributions to the U.N. regular budget
                                           for 1998 and prior periods. U.S. arrears accounted for about 76 percent of
                                           the $417 million total arrears owed by U.N. members for the U.N. regular
                                           budget. Table 5 shows U.S. and other countries’ U.N. regular budget
                                           arrears for 1998 and prior financial periods.




                                           Page 12                                                           GAO/NSIAD-99-187 United Nations
B-282243




Table 5: U.S. and Other Member States' U.N. Regular Budget Arrears, 1998 and Prior
Periods

Dollars in millions
                                                                                             Percent
Member state                                                            Arrears              of total
United States                                                              $316                  75.7
    Withheld for legislative and policy reasons                            (162)
                         a
    Undisputed amount                                                      (154)
Brazil                                                                        31                  7.4
All others                                                                    71                 16.9
Total                                                                      $417                 100.0
Note: Dollar amounts reflect payments received by the United Nations through December 31, 1998;
these amounts may not add due to rounding.
a
 Undisputed amount includes $100 million withheld from fiscal year 1999 funds pending certification of
a $2.533 billion U.N. biennium budget plus $54 million that would be paid under the proposed arrears
payment plan.
Source: Compiled by GAO from U.N. and Department of State financial data.


Since the early 1980s, the United States has declined to pay a portion of its
assessed contributions for the U.N. regular budget for legislative and policy
reasons. The $162 million that the United States has declined to pay to date
accounts for about 51 percent of the U.S. arrears shown in table 5. The
United States has withheld an additional $100 million pending executive
branch certification that the U.N. regular budget for the 1998-99 biennium
will not exceed $2.533 billion, bringing the total currently withheld to $262
million. Department of State officials expect to be able to meet this
certification requirement and pay this $100 million in 1999. As previously
noted, our estimate of the shortfall assumes that the Department of State
will make this payment as planned. Table 6 shows the amounts the United
States had declined to pay and withheld from U.N. regular budget through
the end of 1998.




Page 13                                                        GAO/NSIAD-99-187 United Nations
                                               B-282243




Table 6: Amounts the United States Has Declined to Pay and Withheld From the U.N. Regular Budget

Dollars in millions
Purpose                                                                                                                                      Amount
Amounts not paid due to legislative prohibitions
U.N. General Assembly approval of the construction of the Conference Center for the Economic Commission of Africa                              $28.8
(Addis Ababa) in the mid-1980s during the famine in Africaa
U.N. assistance to the Palestine Liberation Organizationa                                                                                       16.8
Sundquist Amendment prohibiting a portion of the U.S. payment to the U.N. because of kickbacks paid from Soviet                                  6.3
nationals' salaries to their governmentsa
Kasten Amendment of the mid-1980s preventing payment for excessive U.N. post adjustmentsb                                                        1.3
                                                                           a
U.N. activities relating to the South-West Africa People's Organization                                                                          0.7
Temporary increase in "effective" assessment rate increase in 1992 following the breakup of Czechoslovakia                                       0.3
Subtotal                                                                                                                                       $54.2
Amounts not paid due to policy decisions
Withheld payment to the U.N.Tax Equalization Fund because of alleged excessive tax reimbursements paid to U.S.                                $100.4
nationals employed by the U.N.
Law of the Sea Preparatory Commission                                                                                                            7.5
Subtotal                                                                                                                                      $107.9
Amounts withheld until U.N. meets reform conditions c
U.N. regular budget not to exceed $2.533 billion                                                                                              $100.0
Subtotal                                                                                                                                      $100.0
Total                                                                                                                                         $262.1
                                               Note: Dollar amounts reflect withholdings through December 31, 1998.
                                               a
                                                   Prohibitions codified as a note to 22 USCA 287e.
                                               b
                                                   P.L. 98-473
                                               c
                                                These amounts are not disputed.
                                               Source: Compiled by GAO from Department of State financial data.




U.S. Arrears for                               U.N. records showed that, on January 1, 1999, the United States was in
International Tribunals                        arrears about $3 million for payments to international tribunals. U.S.
                                               arrears accounted for about 15 percent of the nearly $20 million of total
                                               arrears owed by U.N. members for international tribunals. U.S. arrears
                                               reflect the Department of State’s application of the 25 percent cap on U.S.
                                               payments for U.N. peacekeeping18 to the half of the tribunals’ budgets that



                                               18
                                                   Section 404(b)(2) of the Foreign Relations Authorization Act of 1994-95 (P.L. 103-236).




                                               Page 14                                                            GAO/NSIAD-99-187 United Nations
                        B-282243




                        are assessed at the higher rate for peacekeeping operations, currently
                        30.4 percent.


U.S. Arrears for U.N.   U.N. records showed that, as of January 1, 1999, the United States had
Peacekeeping            arrears of about $976 million for assessed contributions to U.N.
                        peacekeeping operations.19 U.S. arrears accounted for about 61 percent of
                        the $1,594 million total arrears owed by U.N. members for U.N.
                        peacekeeping. Table 7 shows U.S. and other countries’ peacekeeping
                        arrears for 1998 and prior periods.



                        Table 7: U.S. and Other Member States' U.N. Peacekeeping Arrears, 1998 and Prior
                        Periods

                        Dollars in millions
                                                                                                                   Percent
                        Member state                                                             Arrears           of total
                        United States                                                                $976             61.2
                             Withheld for legislative and policy reasons                            (307)
                             Undisputed amount                                                      (669)
                        Russia                                                                        126              7.9
                        Japan                                                                          98              6.2
                        Brazil                                                                         14              0.9
                        All others                                                                    380             23.8
                        Total                                                                     $1,594             100.0
                        Note: Dollar amounts reflect payments received by the United Nations through December 31, 1998.
                        Source: Compiled by GAO from U.N. and Department of State financial data.


                        Since the 1980s, the United States has declined to pay a portion of its
                        assessed contributions for U.N. peacekeeping for legislative and policy
                        reasons. In 1994, for example, Congress enacted legislation to cap U.S.
                        payments for peacekeeping at 25 percent of the total of all assessed
                        contributions for an operation.20 Amounts the United States has declined
                        to pay accounted for about 31 percent of the U.S. arrears shown in table 7.


                        19
                          Two U.N. peacekeeping operations—the U.N. Truce Supervision Organization (in the Middle East) and
                        the U.N. Military Observer Group in India and Pakistan (in Kashmir)—are financed through the U.N.
                        regular budget.
                        20
                         Section 404(b)(2) of the Foreign Relations Authorization Act of 1994-95 (P.L. 103-236).




                        Page 15                                                         GAO/NSIAD-99-187 United Nations
                          B-282243




                          Table 8 shows the amounts the United States has declined to pay for U.N.
                          peacekeeping operations through the end of 1998.



                          Table 8: Amount the United States Has Declined to Pay for U.N. Peacekeeping
                          Operations

                          Dollars in millions
                          Purpose                                                                                      Amount
                          Amounts not paid due to legislative prohibitions
                          Cap on peacekeeping assessments at 25 percent after October 1, 1995,                             $163
                          versus the U.N. assessment (currently 30.4 percent)
                          Amounts not paid due to policy decisions
                          Cap on peacekeeping assessments at 30.4 percent versus the 31.7 percent                          $123
                          set by the General Assembly to cover shortfalls in peacekeeping contributions
                          following the breakup of the Soviet Union
                          U.N. Mission in the Central African Republic                                                          10
                          U.N. Haiti operations                                                                                 5
                          Fiscal year 1997 funds for the U.N. Mission for the Referendum in Western                             3
                          Sahara
                          Closeout activities for the U.N. Transitional Authority in Cambodia                                   2
                          Judicial monitoring activities for the U.N. Mission in Bosnia and Herzegovina                         1
                          Subtotal                                                                                         $144
                          Total                                                                                            $307
                          Note: Dollar amounts reflect withheld payments through December 31, 1998. This table does not
                          include withheld payments that would be paid under the proposed arrears payment plan, for example,
                          payments withheld from fiscal year 1995 and 1996 funds for the U.N. operation in Western Sahara.
                          Source: Compiled by GAO from Department of State financial data.




Reimbursements Owed by    Because of member states’ arrears, the United Nations has not reimbursed
the United Nations to     all U.N. members for troops, equipment, and other services contributed to
                          U.N. peacekeeping operations.21 As of December 31, 1998, the United
Members States for        Nations owed 73 member states about $1,102 million for troops,
Participating in U.N.     equipment,22 letters of assist,23 and death and disability payments to
Peacekeeping Operations

                          21
                           See United Nations: Financial Issues and U.S. Arrears (GAO/NSIAD-98-201BR, June 18, 1998).
                          22
                           The United Nations refers to this as “contingent-owned” equipment.
                          23
                            Letters of assist request and govern the provision by member states of equipment and services for
                          U.N. peacekeeping, for example, air transportation.




                          Page 16                                                         GAO/NSIAD-99-187 United Nations
                                         B-282243




                                         peacekeepers or their families. About $704 million of this amount—about
                                         63 percent—was for reimbursements owed for troops and equipment
                                         contributed to the U.N. operations in the Yugoslavia, Somalia, Angola,
                                         Macedonia, and Eastern Slovenia.24 Table 9 shows the amounts owed
                                         member states for their participation in U.N. peacekeeping operations
                                         through the end of 1998.



Table 9: Top 10 U.N. Member States Owed Reimbursement for Participation in U.N. Peacekeeping Operations

Dollars in millions
                                                       Contingent-
                                                            owned                Letters of             Death and
Member state                       Troops               equipment                    assist              disability                    Total
France                                $3.9                   $127.6                   $20.8                    $4.3                  $156.6
United States                         32.8                      30.0                    79.9                    0.0                   142.7
United Kingdom                         2.4                      45.6                     6.9                    1.7                     56.6
Italy                                  0.4                      33.6                    19.4                    0.0                     53.4
India                                  4.2                      42.8                     4.0                    0.0                     51.0
Netherlands                            0.0                      45.2                     4.6                    0.0                     49.8
Pakistan                              18.7                      19.5                     0.0                    0.0                     38.3
Belgium                                0.0                      29.7                     8.4                    0.0                     38.1
Canada                                 1.8                      27.0                     1.2                    5.2                     35.3
Slovakia                               0.0                      28.9                     0.4                    0.0                     29.3
All others                            79.2                     298.6                    59.6                   13.3                   450.8
Total                              $143.4                    $728.6                  $205.2                  $24.6                 $1,101.9
                                         Note: Dollar amounts reflect reimbursements through December 31, 1998. Voluntary contributions are
                                         not included. Not all equipment costs are reported to the United Nations. In some cases, members
                                         dispute the amounts owed. The United Nations adopted new guidelines for reimbursing
                                         contingent-owned equipment costs in 1996 (see U.N. document A/Res/50/222, Apr. 11, 1996).
                                         Source: Compiled by GAO from U.N. financial data.




                                         24
                                          The amounts owed for these former U.N. operations is as follows: the former Yugoslavia—
                                         $1.4 million for troops and $390.2 million for equipment; Somalia—$29.2 million for troops and
                                         $100.2 million for equipment; Angola—$4.9 million for troops and $$82.9 million for equipment;
                                         Macedonia—$19.8 million for troops and $29.9 million for equipment; and Eastern Slovenia—
                                         $62,000 for troops and $45.7 million for equipment. The United Nations was unable to breakout by
                                         operation the amounts owed for letters of assist and death and disability payments.




                                         Page 17                                                       GAO/NSIAD-99-187 United Nations
                     B-282243




U.N. Members Have    At the beginning of 1999, 44 of 185 U.N. members (about 24 percent) had
                     arrears equaling or exceeding the sum of their assessed contributions for
Lost Their General   the preceding 2 full years and were subject to article 19. Yugoslavia needed
Assembly Vote        to pay the largest amount to regain its right to vote in the General
                     Assembly—almost $13 million—and Grenada, the smallest amount—just
                     over $5,000.

                     By mid-May, 6 of the 44 members had paid enough to regain their right to
                     vote in the General Assembly. These six members were Afghanistan,
                     El Salvador, Honduras, Libyan Arab Jamahiriya, Saint Vincent and the
                     Grenadines, and the former Yugoslav Republic of Macedonia.

                     In April 1999, the General Assembly granted six other members permission
                     to vote temporarily, because their failure to pay was judged to be due to
                     conditions beyond their control, such as civil war or severe natural
                     disasters.25 Three of these members—Bosnia and Herzegovina, Cambodia,
                     and Georgia—were permitted to vote through June 30, 1999. Three
                     others—Congo, Guinea-Bissau, and Nicaragua—were permitted to vote
                     through June 30, 2000. Previously, in October 1998, the General Assembly
                     had granted two other members—Comoros and Tajikistan—permission to
                     vote through the current (53rd) session of the General Assembly.

                     Iraq applied for permission to vote despite its arrears, arguing that the
                     sanctions authorized by the Security Council, plus the U.N.’s refusal to
                     accept payment in Iraqi currency, had left it without a means of paying its
                     assessed contributions. The Committee on Contributions did not make a
                     recommendation to the General Assembly on Iraq’s request, concluding
                     that the political issues raised by its request exceeded the committee’s
                     technical advisory role.26

                     As of mid-May, the remaining 30 member states did not have the right to
                     vote in the General Assembly. The Chief of the U.N. Contributions Service
                     stated that, based on past experience, he expects that, by the end of the

                     25
                       The Committee on Contributions considers applications from member states for permission to vote.
                     Based on information provided by the applicant and the U.N. Secretariat, the committee makes a
                     recommendation on the application to the General Assembly’s Fifth Committee, which deals with
                     financial matters. The Fifth Committee, in turn, makes a recommendation to the General Assembly,
                     which ultimately decides whether to grant the applicant permission to vote. As a rule, a member state
                     is permitted to vote for a specific, limited period and only when its failure to pay is judged to be due to
                     conditions beyond its control.
                     26
                      Addendum to the report of the Committee on Contributions (U.N. document A/53/11/Add.1).




                     Page 18                                                           GAO/NSIAD-99-187 United Nations
                  B-282243




                  year, most of these remaining members will make at least the minimum
                  payment necessary to regain their right to vote in the General Assembly.
                  Appendix II shows the status of member states subject to article 19 at the
                  beginning of 1999.

                  In a 1998 report, the Committee on Contributions noted that the loss of
                  voting rights under article 19 was the only sanction available against
                  member states that did not meet their financial obligations to the United
                  Nations.27 In a 1999 report, it also noted that many member states regularly
                  paid only enough to retain or regain their right to vote. 28 At the General
                  Assembly’s direction, the committee has reviewed alternative procedures
                  for applying article 19, such as calculating and applying article 19 both at
                  the beginning of the calendar year and at the beginning of the peacekeeping
                  fiscal year on July 1.29 Some committee members were concerned,
                  however, that such a change would increase the number of member states
                  falling under Article 19 and possibly interfere with the operation of the
                  General Assembly.30 The issue remains under review.



Agency Comments   In written comments on a draft of this report, the Department of State
                  concurred with our analysis and commented that our report succinctly
                  stated the facts currently available and estimated the amount of money
                  required to avoid loss of vote in the General Assembly in January 2000.
                  State underscored that given the many financial factors involved in the loss
                  of vote process, it is impossible at this moment to state precisely how much
                  the United States will have to pay. The Department of State’s written
                  comments are reprinted in appendix III. State also provided several
                  technical comments, which we incorporated as appropriate.



Scope and         To gather information for our analysis, we reviewed U.N. and U.S. financial
                  reports and other records from 1994 to 1999 that showed the amounts of
Methodology

                  27
                   Report of the Committee on Contributions (U.N. document A/53/11).
                  28
                   Addendum to the report of the Committee on Contributions (U.N. document A/53/11/Add.1).
                  29
                   U.N. General Assembly resolution 52/215 B.
                  30
                    According to Department of State officials, such a change would have a major impact on U.S. arrears
                  and the application of article 19 to the United States because of the U.S. practice of paying its calendar
                  year assessments with funds appropriated for the following fiscal year.




                  Page 19                                                           GAO/NSIAD-99-187 United Nations
B-282243




assessed contributions, arrears, and reimbursements owed member states
and the application of article 19. We also reviewed reports and other
records on these matters prepared by other organizations, for example, the
Congressional Research Service. To confirm and expand our
understanding of the data and other information in these reports and
records, we interviewed officials at the U.S. Department of State’s Bureau
of International Organizations Affairs, the U.S. Mission to the United
Nations, and U.N. headquarters.

We estimated the contribution shortfall on January 1, 2000, by analyzing
U.N. and U.S. financial data using a computer model we developed for the
purpose. This model calculates a projected arrears balance and a projected
amount of assessed contributions for the preceding 2 full years, based on
expected assessments for 1999, arrears from 1998 and prior years,
estimated U.S. payments, and expected credits that the United States may
receive from the U.N. regular, international war crimes tribunal, and
peacekeeping budgets. We varied some of our assumptions about U.S.
assessments and payments to determine how the estimated shortfall was
affected by these changes. For example, we calculated the shortfall
assuming different levels of peacekeeping assessments and payments for
the recently authorized U.N. operation in Kosovo. We verified our analysis
by discussing it with U.N. and Department of State officials and reviewed
similar analyses conducted by Department of State officials.

We used a commercially available spreadsheet software program to
tabulate and display information compiled from U.N. and U.S. financial
reports and other records to analyze (1) trends in U.N. assessments and
U.S. arrears leading to the shortfall, (2) U.S. arrears and the amounts
withheld for legislative and policy reasons, and (3) the status of member
states that had lost their vote in the General Assembly. We verified our
analyses of these issues by discussing them with U.N. and Department of
State officials.

We did not independently verify the accuracy of financial data obtained
from U.N. and U.S. reports or other records. Because we are an agency of
the United States, we do not have direct audit authority to review the
operations or financial records of the United Nations. Instead, we
reviewed audit reports prepared by the U.N. Board of Auditors to ensure
that U.N. financial information was reliable.

We conducted our work from April to July 1999 in accordance with
generally accepted government auditing standards.



Page 20                                       GAO/NSIAD-99-187 United Nations
B-282243




We are providing copies of this report to other congressional committees;
the Honorable Madeline Albright, Secretary of State; the Honorable
A. Peter Burleigh, Acting Permanent Representative of the United States of
America to the United Nations; the Honorable Jacob Lew, Director, Office
of Management and Budget; and the Honorable Kofi Annan, Secretary
General of the United Nations. Copies also will be made available to others
upon request.

Please contact me at (202) 512-4128 if you or your staff have any questions
about this report. Key contributors to this report were Tetsuo Miyabara and
Michael Rohrback.

Sincerely yours,




Harold J. Johnson
Associate Director
International Relations and Trade Issues




Page 21                                       GAO/NSIAD-99-187 United Nations
Contents



Letter                                                                                               1


Appendix I                                                                                          24
Summary of U.N.
Methodology for
Applying Article 19

Appendix II                                                                                         26
Status of U.N. Member
States in Arrears Under
Article 19 of the U.N.
Charter on January 1,
1999

Appendix III                                                                                        29
Comments From the
Department of State

Tables                    Table 1: U.N. Assessments for the Regular Budget, International
                            Tribunals, and Peacekeeping Operations for 1999, as of
                            June 30, 1999                                                            5
                          Table 2: Estimated U.S. Contributions Shortfall on January 1, 2000         6
                          Table 3: Estimated U.S. Assessed Contributions for the 2-Year Period
                            Ending on January 1, 2000                                                8
                          Table 4: Comparison of U.S. Assessed Contributions for the United
                            Nations for the Prior 2 Years and the U.S. Arrears on
                            January 1, 1995-2000                                                    12
                          Table 5: U.S. and Other Member States' U.N. Regular Budget
                            Arrears, 1998 and Prior Periods                                         13
                          Table 6: Amounts the United States Has Declined to Pay and
                            Withheld From the U.N. Regular Budget                                   14
                          Table 7: U.S. and Other Member States' U.N. Peacekeeping Arrears,
                            1998 and Prior Periods                                                  15




                          Page 22                                       GAO/NSIAD-99-187 United Nations
          Contents




          Table 8: Amount the United States Has Declined to Pay for U.N.
            Peacekeeping Operations                                                16
          Table 9: Top 10 U.N. Member States Owned Reimbursement for
            Participation in U.N. Peacekeeping Operations                          17


Figures   Figure 1: Comparison of U.S. Assessed Contributions for the
            United Nations for the Prior 2 Years and U.S. Arrears on
            January 1, 1996-2000                                                    3
          Figure 2: U.S. Assessments for the U.N. Regular Budget,
            International Tribunals, and Peacekeeping Operations, 1994-99          11




          Page 23                                      GAO/NSIAD-99-187 United Nations
Appendix I

Summary of U.N. Methodology for Applying
Article 19                                                                                                        Appenx
                                                                                                                       Idi




              Article 19 of the U.N. Charter states that a member will lose its right to vote
              in the General Assembly if the amount of its arrears equals or exceeds its
              assessed contributions for the preceding 2 full years:

              “A Member of the United Nations which is in arrears in the payment of its financial
              contributions to the Organization shall have no vote in the General Assembly if the amount
              of its arrears equals or exceeds the amount of the contributions due from it for the
              preceding two full years. The General Assembly may, nevertheless, permit such a Member
              to vote if it is satisfied that the failure to pay is due to conditions beyond the control of the
              Member.”

              Article 19 does not specify how the amount of arrears and assessed
              contributions due should be calculated or the timing of the calculation and
              application of the sanction (loss of vote). In practice, a member state is
              considered to be subject to article 19 if its arrears as of January 1 of a given
              year equal or exceed the amount of assessed contributions due from it for
              the preceding 2 full calendar years.

              The current interpretation of “arrears” is linked to regulation 5.4 of the
              Financial Regulations and Rules of the United Nations. This regulation
              provides that assessed contributions shall be considered due and payable
              in full within 30 days of (1) receipt of notice from the Secretary General or
              (2) as of the first day of the calendar year to which they relate, whichever is
              later. It further provides that, as of January 1 of the following calendar
              year, the unpaid balances of such contributions are considered to be in
              arrears. Thus, for example, only assessed contributions due before
              January 1, 1999, are considered to be in arrears at any time during 1999 and
              included in the calculation of the amount of arrears under article 19.

              In line with the interpretation of arrears under the current provisions of
              regulation 5.4, the term “contributions due for the preceding 2 full years”
              has, since 1950, been interpreted to mean the preceding 2 full calendar
              years. As in the case of the calculation of arrears, U.N. practice has been to
              include only those assessed contributions due before the end of a given
              year in the calculation. Thus, for example, only those assessed
              contributions that fell due and payable under regulation 5.4 between
              January 1, 1997, and December 31, 1998, were included in the amount of
              contributions due for the preceding 2 full years for the purposes of
              calculations for article 19 on January 1, 1999.

              Under the current method for calculating article 19, arrears are computed
              in net terms, that is, actual amounts payable after adjustments for income
              and other items, such as unspent balances from earlier financial periods.



              Page 24                                                     GAO/NSIAD-99-187 United Nations
Appendix I
Summary of U.N. Methodology for Applying
Article 19




The amount of assessed contributions due for the preceding 2 full years,
however, has been interpreted to mean the amounts “as apportioned by the
General Assembly” under Article 17 of the U.N. Charter,1 that is, the gross
amounts assessed on member states. As the gross amounts are, in most
cases, higher than the net amounts, this approach tends to reduce the
amount of minimum payments that member states must make to retain or
regain their right to vote in the General Assembly.




1
 Article 17, paragraph 2, Charter of the United Nations.




Page 25                                                    GAO/NSIAD-99-187 United Nations
Appendix II

Status of U.N. Member States in Arrears
Under Article 19 of the U.N. Charter on
January 1, 1999                                                                                                                        Appe
                                                                                                                                          nIx
                                                                                                                                            Idi




Dollars in millions
                            Minimum
                            payment
                           needed to Permitted
Member state             regain votea to vote?     Comments
Afghanistan                $133,000 Yes            Made at least the minimum payment to regain its vote.
Bosnia and                 1,274,200 Yes           Permitted to vote until June 30, 1999. Despite some members’ doubts, the
Herzegovina                                        Committee on Contributions concluded that Bosnia and Herzegovina's failure
                                                   to pay was due to conditions beyond its control, citing the impact of protracted
                                                   civil war, high unemployment, and low government revenues on its ability to
                                                   pay.b
Burundi                     143,800 No
Cambodia                    199,300 Yes            Permitted to vote until June 30, 1999. The Committee on Contributions
                                                   concluded that Cambodia's failure to pay was due to conditions beyond its
                                                   control, citing the impact of years of war and the significant cost of
                                                   post-conflict activities—such as clearing landmines and military
                                                   demobilization—on its ability to pay and Cambodia’s continuing dependence
                                                   on foreign assistance. The committee also noted Cambodia's expressed
                                                   intention to make the necessary minimum payment by June 1999.b
Cape Verde                   93,100 No
Central African             122,500 No
Republic
Comoros                         N/A Yes            Permitted to vote through the 53rd session of the General Assembly. The
                                                   Committee on Contributions concluded that Comoros’ failure to pay was
                                                   beyond its control, citing the impact of severe political, economic, and social
                                                   problems and the loss of control over some of its territory on its ability to pay
                                                   and its inability to meet other financial obligations.c
Congo                       316,500 Yes            Permitted to vote until June 30, 2000. The Committee on Contributions
                                                   concluded that Congo’s failure to pay was beyond its control, citing the impact
                                                   of the 1997 civil war and continued fighting on its ability to pay.b
Democratic Republic of       41,000 No
the Congo
Djibouti                    143,500 No
Dominica                    143,500 No
Ecuador                      35,299 No
El Salvador                  24,200 Yes            Made at least the minimum payment to regain its vote.
Equatorial Guinea            43,467 No
Gambia                      143,000 No
Georgia                    4,639,800 Yes           Permitted to vote until June 30, 1999. The Committee on Contributions
                                                   concluded that Georgia's failure to pay was due to conditions beyond its
                                                   control, citing the impact of civil war, serious drought, and the economic crisis
                                                   of a major trading partner (Russia) on its ability to pay. The committee also
                                                   noted the presence in Georgia of a U.N. peacekeeping operation as well as
                                                   Georgia's expressed intention to make some payments by April 1999 and
                                                   submit a payment schedule.b




                                         Page 26                                                 GAO/NSIAD-99-187 United Nations
                                          Appendix II
                                          Status of U.N. Member States in Arrears
                                          Under Article 19 of the U.N. Charter on
                                          January 1, 1999




Dollars in millions
                            Minimum
                            payment
                           needed to Permitted
Member state             regain votea to vote?        Comments
Grenada                       5,300 No
Guinea                      133,500 No
Guinea-Bissau               273,600 Yes               Permitted to vote until June 30, 2000. The Committee on Contributions
                                                      concluded that Guinea-Bissau’s failure to pay was due to conditions beyond
                                                      its control, citing the impact of the armed conflict and the need to devote
                                                      limited government resources to the country's urgent needs on its ability to
                                                      pay. Some committee members noted that Guinea-Bissau was among those
                                                      member states that followed a practice of paying at or close to the minimum
                                                      amount due each year to retain or regain its vote.b
Haiti                        42,000 No
Honduras                    108,600 Yes               Made at least the minimum payment to regain its vote.d
Iraq                       9,135,200 No               Iraq requested an exemption, arguing that sanctions authorized by Security
                                                      Council Resolution 661 (1990) plus the United Nations' refusal to accept
                                                      contributions in Iraqi dinars had left it without an effective means of paying its
                                                      outstanding assessments. The Committee on Contributions did not make a
                                                      recommendation to the General Assembly on Iraq's request, concluding that
                                                      the political aspects of the issues raised by Iraq's request exceeded its
                                                      technical advisory role to the General Assembly.b
Kyrgyzstan                  502,600 No
Liberia                     939,100 No
Libyan Arab Jamahiriya      557,900 Yes               Made at least the minimum payment to regain its vote.
Madagascar                   44,700 No
Mauritania                  122,300 No
Mongolia                    114,222 No
Nicaragua                   155,200 Yes               Permitted to vote until June 30, 2000. The Committee on Contributions
                                                      concluded that Nicaragua's failure to pay was due to conditions beyond its
                                                      control, citing the impact of hurricane Mitch on its economy and physical and
                                                      social infrastructure and the need to devote limited government resources to
                                                      the country's rehabilitation and reconstruction on its ability to pay and efforts
                                                      to reduce the country's external debt. Some committee members noted that
                                                      Nicaragua was among those member states that followed a practice of paying
                                                      at or close to the minimum amount due each year to retain or regain its vote.b
Niger                       142,000 No
Republic of Moldova        1,310,900 No
Rwanda                      138,809 No
Saint Vincent and the        26,900 Yes               Made at least the minimum payment to regain its vote.
Grenadines
Sao Tome and Principe       404,000 No
Seychelles                   87,900 No
Sierra Leone                136,900 No
Somalia                     805,400 No



                                          Page 27                                                   GAO/NSIAD-99-187 United Nations
                                         Appendix II
                                         Status of U.N. Member States in Arrears
                                         Under Article 19 of the U.N. Charter on
                                         January 1, 1999




Dollars in millions
                           Minimum
                           payment
                          needed to Permitted
Member state            regain votea to vote?          Comments
Tajikistan                     N/A Yes                 Permitted to vote through the 53rd session of the General Assembly. The
                                                       Committee on Contributions concluded that Tajikistan's failure to pay was
                                                       beyond its control, citing the impact of civil war, natural disasters, and
                                                       collapse of trade and economic relations among former Soviet republics on
                                                       its ability to pay; a substantial increase in foreign debts and the rescheduling
                                                       of some debts; and Tajikistan's receipt of significant international assistance,
                                                       including a U.N. peacekeeping operation.c
The former Yugoslav         90,363 Yes                 Made at least the minimum payment to regain its vote.
Republic of Macedonia
Togo                        62,500 No
Turkmenistan               494,200 No
Vanuatu                    144,700 No
Yemen                      123,300 No
Yugoslavia               12,678,500 No
Total                   $36,276,760
                                         Note: Table reflects payments and actions through May 14, 1999.
                                         a
                                          Minimum payment necessary to reduce the member state’s outstanding contributions (arrears) below
                                         the gross amount assessed for the preceding 2 full years.
                                         b
                                           The Committee on Contributions’ conclusions and recommendations on this matter are contained in
                                         U.N. documents A/53/11/Add.1 (Feb. 16, 1999) and A/53/11/Add.1/Corr.1 (Feb. 23, 1999). Based on
                                         the committee's report, the Fifth Committee recommended the adoption of a draft decision permitting
                                         Bosnia and Herzegovina, Cambodia, and Georgia to vote until June 30, 1999; and Congo,
                                         Guinea-Bissau, Nicaragua, and Honduras to vote until June 30, 2000 (A/53/464/Add.4, Mar. 31, 1999).
                                         On April 7, 1999, the General Assembly adopted the draft decision as amended (by Honduras, which
                                         had made the minimum payment needed to regain its vote—see table note d).
                                         c
                                          The Committee on Contributions’ conclusions and recommendations are contained in U.N. document
                                         A/53/11/Suppl. No. 11 (1998). Based on this report, the Fifth Committee recommended the adoption
                                         of a draft decision permitting Comoros and Tajikistan to vote through the 53 rd session of the General
                                         Assembly (U.N. document A/C.5/53/L.4, Oct. 6, 1998). On October 7, 1998, the General Assembly
                                         adopted this draft decision.
                                         d
                                           In early January 1999, Honduras requested an exemption from article 19. In mid-February 1999, the
                                         Committee on Contributions concluded that Honduras’ failure to pay was due to conditions beyond its
                                         control and recommended permitting it to vote until June 30, 2000. In its report, the committee cited
                                         the impact of hurricane Mitch on Honduras' economy and physical and social infrastructure, the need
                                         to devote limited government resources to the country’s rehabilitation and reconstruction on its ability
                                         to pay and efforts to reduce and reschedule the country’s external debts. Some committee members
                                         noted that Honduras was among those member states that followed a practice of paying at or close to
                                         the minimum amount due each year to retain or regain its vote. Subsequent to the Fifth Committee’s
                                         recommendation that Honduras be permitted to vote (see table note b), Honduras made at least the
                                         minimum payment needed to regain its vote.
                                         Source: GAO analysis of U.N. documents.




                                         Page 28                                                          GAO/NSIAD-99-187 United Nations
Appendix III

Comments From the Department of State                         AppeInx
                                                                    Idi




(711424)       Lte
                 rt   Page 29   GAO/NSIAD-99-187 United Nations
Ordering Information

The first copy of each GAO report and testimony is free.
Additional copies are $2 each. Orders should be sent to the
following address, accompanied by a check or money order made
out to the Superintendent of Documents, when necessary, VISA and
MasterCard credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address are
discounted 25 percent.

Orders by mail:

U.S. General Accounting Office
P.O. Box 37050
Washington, DC 20013

or visit:

Room 1100
700 4th St. NW (corner of 4th and G Sts. NW)
U.S. General Accounting Office
Washington, DC

Orders may also be placed by calling (202) 512-6000
or by using fax number (202) 512-6061, or TDD (202) 512-2537.

Each day, GAO issues a list of newly available reports and
testimony. To receive facsimile copies of the daily list or any list
from the past 30 days, please call (202) 512-6000 using a touchtone
phone. A recorded menu will provide information on how to obtain
these lists.

For information on how to access GAO reports on the INTERNET,
send an e-mail message with “info” in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov
United States                       Bulk Rate
General Accounting Office      Postage & Fees Paid
Washington, D.C. 20548-0001           GAO
                                 Permit No. GI00
Official Business
Penalty for Private Use $300

Address Correction Requested