United Nations: Financial Issues and U.S. Arrears (Briefing Report,
06/18/98, GAO/NSIAD-98-201BR).

Pursuant to a congressional request, GAO reviewed the validity of the
Department of State's claims that unpaid U.S. assessments (arrears)
limit the United States' ability to effectively pursue its interests
through the United Nations (U.N.), focusing on the: (1) U.N.'s financial
status; and (2) impact of U.S. arrears on selected U.N. decisions.

GAO noted that: (1) its analysis indicates that the U.N. has been able
to pay its external creditors and its personnel costs while maintaining
an overall positive cash balance; (2) although the U.N. has reported a
negative year-end cash balance in its regular budget account for the
past several years, it has been able to cover operating expenses by
deferring payments to countries contributing troops, equipment, and
other services to peacekeeping efforts; (3) these peacekeeping accounts
are reimbursed as U.N. members pay their regular budget assessments; (4)
the U.N.'s financial problems have been primarily caused by the
accumulation of unpaid assessments and the late payments of assessments
by a large number of members; (5) although some members pay their
assessments by the due date, most make partial payments throughout the
year; (6) as of February 28, 1998, the U.N. reported that 166 member
states owed about $2 billion for arrears; 6 countries owed about 91
percent of this amount; (7) the other 160 countries owed about 9 percent
of the unpaid contributions; (8) in some cases, unpaid contributions
have been the result of the members' inability to pay; (9) U.N. records
show that the United States is about $1.3 billion in arrears for the
regular and peacekeeping budgets and is not in arrears for the
international criminal tribunals; (10) according to the U.N. Under
Secretary General for Management, the continuing large amount of arrears
has created a structural deficit that could develop into a serious
financial crisis if members begin demanding payment of amounts due them
for providing goods and services to U.N. peacekeeping operations; (11)
according to the U.N. Under Secretary General for Management, the only
way for the U.N. to circumvent the chronic deficits in the regular
budget is to borrow from peacekeeping accounts; (12) the U.S. arrears
situation at the U.N. has contributed to a difficult environment for
advancing U.S. positions and has distracted the debates away from the
merits of the particular issues; (13) U.S. officials have been informed
by representatives of other U.N. members that the United States will not
regain the Advisory Committee on Administrative and Budgetary Questions
seat until its arrears are paid in full; and (14) GAO's analysis of U.S.
payments due through 1998 indicates that the United States could be
sufficiently in arrears to lose its General Assembly vote in January
1999 if it does not legislate or pay an additional amount between $211
and $241 million by December 31, 1998.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-98-201BR
     TITLE:  United Nations: Financial Issues and U.S. Arrears
      DATE:  06/18/98
   SUBJECT:  International relations
             International organizations
             Financial management
             Federal aid to foreign countries
             Future budget projections
             Budget outlays
IDENTIFIER:  Iraq
             France
             Russia
             China
             Liberia
             Comoros
             Tajikistan
             Belarus
             Brazil
             Japan
             Ukraine
             
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Cover
================================================================ COVER

Briefing Report to Congressional Requesters

June 1998

UNITED NATIONS - FINANCIAL ISSUES
AND U.S.  ARREARS

GAO/NSIAD-98-201BR

United Nations

(711330)


Abbreviations
=============================================================== ABBREV

  ACABQ - Advisory Committee on Administrative and Budgetary
     Questions
  ICTR - International Criminal Tribunal for Rwanda
  ICTY - International Criminal Tribunal for the former Yugoslavia
  MINUGUA - United Nations Mission for the Verification of Human
     Rights and of Compliance with the Commitments of the
     Comprehensive Agreement on Human Rights in Guatemala
  MINURSO - United Nations Mission for the Referendum in Western
     Sahara
  MONUA - United Nations Observer Mission in Angola
  ONUCA - United Nations Observer Group in Central America
  ONUC - United Nations Operation in Congo
  ONUMOZ - United Nations Operation in Mozambique
  ONUSAL - United Nations Observer Mission in El Salvador
  UNAMIC - United Nations Advance Mission in Cambodia
  UNAMIR - United Nations Assistance Mission for Rwanda
  UNAVEM - United Nations Angola Verification Mission
  UNDOF - United Nations Disengagement Observer Force
  UNEF - United Nations Emergency Force
  UNFICYP - United Nations Peacekeeping Force in Cyprus
  UNIFIL - United Nations Interim Force in Lebanon
  UNIIMOG - United Nations Iran-Iraq Military Observer Group
  UNIKOM - United Nations Iraq-Kuwait Observation Mission
  UNMIBH - United Nations Mission in Bosnia and Herzegovina
  UNMIH - United Nations Mission in Haiti
  UNMLT - United Nations Military Liaison Team in Cambodia
  UNMOT - United Nations Mission Observers in Tajikistan
  UNOMIG - United Nations Observer Mission in Georgia
  UNOMIL - United Nations Observer Mission in Liberia
  UNOMUR - United Nations Observer Mission Uganda-Rwanda
  UNOSOM - United Nations Operation in Somalia
  UNPREDEP - United Nations Preventive Deployment Force
  UNPROFOR - United Nations Protection Force
  UNSCOM - United Nations Special Commission
  UNSMIH - United Nations Support Mission in Haiti
  UNTAC - United Nations Transitional Authority in Cambodia
  UNTAES - United Nations Transitional Administration for Eastern
     Slavonia, Baranja and Western Sirmium
  UNTAG - United Nations Transition Assistance Group

Letter
=============================================================== LETTER


B-280216

June 18, 1998

The Honorable Jesse Helms
Chairman, Committee on Foreign Relations
United States Senate

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

The Honorable Harold Rogers
Chairman, Subcommittee on Commerce, Justice,
  State and Judiciary
Committee on Appropriations
House of Representatives

According to the United Nations Secretary General, the U.N.'s
financial situation is precarious, due to the nonpayment or late
payment by the United States and other U.N.  members of their
assessed contributions.  Department of State officials have asserted
that unpaid U.S.  assessments (arrears) limits the U.S.' ability to
effectively pursue its interests through the United Nations.  This
report responds to your concerns regarding the validity of these
claims.  Specifically, you asked us to assess (1) the U.N.'s
financial status and (2) the impact of U.S.  arrears on selected U.N. 
decisions, including U.N.  resolutions dealing with Iraq and U.S. 
efforts to secure a change in its regular budget assessment rate. 
Our observations concerning the impact of U.S.  arrears on selected
U.N.  decisions is limited to those specific decisions we examined
and cannot be generalized to the broader range of issues and
proposals that have been debated at the United Nations.  We briefed
members of your staff about these issues on February 13 and 24, 1998. 
This report summarizes and updates the information provided at those
briefings. 


   BACKGROUND
------------------------------------------------------------ Letter :1

The U.N.  Charter--an international treaty--provides that the
expenses of the organization shall be borne by the members as
apportioned by the General Assembly.  The U.N.'s basic operations,
including most headquarters activities, are funded through regular
budget assessments paid by its member states.  Member states are
assessed separately for peacekeeping operations and international
criminal tribunals,\1 but at different rates than for the regular
budget.  The United Nations uses the budget levels set by the General
Assembly as the basis for assessing its members and planning its
activities.  The unpredictability of U.N.  members' payments is not a
factor in developing its budgets. 

The United States is the U.N.'s largest contributor and, in 1997, it
paid about 89 percent, or $627.8 million, of its assessments of
$707.7 million.  In 1997, the United Nations assessed its 185 members
a total of $2.4 billion for its regular, peacekeeping, and tribunal
budgets.  The United States is assessed 25 percent of the U.N.'s
regular budget and about 30.5 percent of peacekeeping budgets.  In
addition, the United States is assessed 25 percent for one-half of
the international criminal tribunals' budget and about 30.5 percent
for the other half.  According to the United Nations, the United
States has on average paid about 90 percent of its regular budget
assessment over the last 17 years. 

Regular budget assessments are due on January 31 of each year and are
considered to be in arrears if they are not paid by December 31. 
Assessments for peacekeeping missions and the tribunals are due
within 30 days of the billing dates.  Article 19 of the U.N.  Charter
states that a member that is in arrears in the payment of its
financial contributions to the United Nations will have no vote in
the General Assembly if the amount of arrears equals or exceeds the
assessments due for the preceding 2-full years.  Security Council
rights, such as the power of a permanent member to veto any
resolutions, are not affected by article 19. 

Since 1983, the United States has paid its calendar year assessments
with funds appropriated for the following U.S.  fiscal year.  For
example, calendar year 1998 assessments, which were due by January
31, 1998, will be paid after October 1, 1998, with fiscal year 1999
appropriations.  In addition, since the early 1980s, the United
States has withheld portions of its assessed contributions for
legislative and policy reasons.  For example, in 1994, Congress
enacted legislation to cap the U.S.  peacekeeping assessment at 25
percent.\2 The United Nations counts the difference as arrears. 


--------------------
\1 The United Nations has established two international criminal
tribunals--the 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. 

\2 22 U.S.C.  287e note. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

Our analysis indicates that the United Nations has been able to pay
its external creditors and its personnel costs while maintaining an
overall positive cash balance.  Although the United Nations has
reported a negative year-end cash balance in its regular budget
account for the past several years, it has been able to cover
operating expenses by deferring payments to countries contributing
troops, equipment, and other services to peacekeeping
efforts--essentially borrowing from these countries--and spending
cash kept in peacekeeping accounts.  These peacekeeping accounts are
reimbursed as U.N.  members pay their regular budget assessments. 

The U.N.'s financial problems have been primarily caused by the
accumulation of unpaid assessments and the late payments of
assessments by a large number of members.  Although some members pay
their assessments by the due date, most make partial payments
throughout the year.  A large number of members also have unpaid
assessments from prior years (arrears).  According to the U.N.  Under
Secretary General for Management, in comparison to past years, a
growing number of members are now paying more or all of their
assessments.  For example, over the past 3 years, the Russian
Federation has paid over $300 million of its unpaid assessments from
prior years.  Despite this improved payment pattern, in recent years,
the U.N.'s regular budget account has run out of cash around the end
of August and, to continue operations, cash is borrowed from its
peacekeeping mission accounts. 

As of February 28, 1998, the United Nations reported that 166 member
states owed about $2 billion for arrears; 6 countries owed about 91
percent of this amount:  the United States (64.2 percent), Ukraine
(11.2 percent), Russian Federation (7 percent), Japan (4.4 percent),
Belarus (2.7 percent), and Brazil (1.4 percent).  The other 160
countries owed about 9 percent of the unpaid contributions.  In some
cases, unpaid contributions have been the result of the members'
inability to pay.  For example, Brazil, Belarus, and Ukraine have
experienced financial difficulties for several years and have not
paid their assessments in full or on time.  Japan makes partial
payments during the assessment year.  The U.N.'s records show that
the United States is about $1.3 billion in arrears for the regular
and peacekeeping budgets and is not in arrears for the international
criminal tribunals.  Of the amount in arrears as of February 28,
1998, the United States has agreed to pay $723 million--$60 million
for the regular budget and $663 million for peacekeeping.  The United
States has not agreed to pay $567 million based on legislative
requirements or policy determinations. 

According to the U.N.  Under Secretary General for Management, the
continuing large amount of arrears (both the failure to pay
assessments in full and to pay them on time) has created a structural
deficit that could develop into a serious financial crisis if members
begin demanding payment of amounts due them for providing goods and
services to U.N.  peacekeeping operations.  The structural problem
arises from the fact that U.N.  programs and activities are
implemented on the basis that 100 percent of the budgeted amounts
will be assessed to members, and that assessments will be paid in
full and on time.  Although member states, including the United
States, approved these activities, they are not being fully funded in
a timely manner.  Moreover, the U.S.' practice since 1986 of
withholding part of the assessed contributions until certain
conditions have been met, sometimes for many months beyond the due
date, has exacerbated this problem.  This condition has prevailed for
many years. 

According to the U.N.  Under Secretary General for Management, the
only way for the United Nations to circumvent the chronic deficits in
the regular budget is to borrow from peacekeeping accounts; and with
peacekeeping funds diminishing, "the time is fast approaching when
this will no longer be feasible." Our analysis shows that year-end
cash balances in the peacekeeping accounts have declined from $923
million in 1995 to a projected $761 million in 1998. 

The U.S.  arrears situation at the United Nations has contributed to
a difficult environment for advancing U.S.  positions and has
distracted the debates away from the merits of the particular issues. 
However, on specific cases we examined, arrears sometimes had a clear
impact on outcomes and sometimes did not.  In the security arena, the
ultimate outcome of the cases we examined did not appear to be
affected by the U.S.  arrears, whereas other U.S.  interests, such as
obtaining a lower regular budget assessment rate clearly were. 

The U.S.  arrears situation was raised by Iraq during the Security
Council debate concerning Iraq's compliance with weapons inspections
and distracted attention from Iraq's violations.  Nonetheless,
Security Council resolutions were firm, consistent, and unanimous in
condemning Iraq and maintaining the weapons inspections in accord
with U.S.  positions.  According to U.S.  officials, the resolutions
did not reflect the increased difficulty that arrears caused in
obtaining Security Council support. 

On other issues we examined, the arrears issue had a clearly negative
impact.  For example, while consensus had not been reached among the
members to reduce the U.S.  regular budget assessment rate from 25 to
22 percent, according to U.S.  mission officials, the inability to
resolve this issue legislatively in 1997 ensured that agreement on
reducing the rate would not be reached.  In addition, documents we
obtained cited U.S.  arrears as the primary reason the United States
lost its seat on the Advisory Committee on Administrative and
Budgetary Questions--whose role is to report to the Fifth Committee
on its examinations of the regular, peacekeeping, and international
criminal tribunal budgets and other accounts of the United Nations. 
Moreover, U.S.  officials have been informed by representatives of
other U.N.  members that the United States will not regain the
Advisory Committee seat until its arrears are paid in full. 

By April 4, 1998, 39 U.N.  members in arrears had lost their vote in
the General Assembly under article 19.  By May 11, 1998, that number
was reduced to 27 as payments were made by member states, thus
permitting them to regain their voting privileges.  Our analysis of
U.S.  payments due through 1998--including the estimated payments of
between $363 and $393 million the United States says it intends to
make from its 1998 and prior year appropriations--indicates that the
United States could be sufficiently in arrears to lose its General
Assembly vote in January 1999 if it does not legislate or pay an
additional amount between $211 and $241 million by December 31, 1998. 
We noted that other members, including France, the former Soviet
Union, and China--have been in a similar situation for their refusal
to pay certain assessments but were allowed to continue their voting
privileges.  In the case of China, the General Assembly authorized
the United Nations to place the amounts owed in a special account. 
However, according to U.S.  officials, to date, U.S.  efforts to have
such an account established for the amounts in dispute have been
rebuffed.  Recently, the General Assembly allowed three other U.N. 
members that failed to pay their dues--Comoros, Liberia, and
Tajikistan--to continue their voting privileges because of conditions
beyond their control. 

The briefing sections provide more information on the U.N.'s
financial status and the impact of U.S.  arrears on the U.S.' ability
to prevail on U.N.  decisions significant to U.S.  interests. 
Appendixes I through III list unpaid contributions by U.N.  account,
unpaid contributions by U.N.  member state, and reimbursements owed
to U.N.  members for peacekeeping contributions. 


   AGENCY COMMENTS AND OUR
   EVALUATION
------------------------------------------------------------ Letter :3

The Department of State and the United Nations provided written
comments on a draft of this report.  The Department of State
commented that, while the facts of the report are accurate, the
report was narrowly focused and has not captured the atmosphere at
the United Nations toward the United States and loss of influence and
prestige of the United States within all the bodies of the United
Nations that has been caused by U.S.  arrears.  Specifically, State
believes that it is impossible and imprudent to assess the impact of
the arrears by studying only selected activities in the Security
Council and on the recent effort to change the regular budget
assessment. 

Our report states that despite the fact that the United States is the
largest contributor to the United Nations, the arrears problem has
contributed to a difficult environment for the State Department and
the U.S.  Mission to operate in.  It also makes clear that our
observations concerning the impact of U.S.  arrears are limited to
outcomes for the specific decisions we were asked to examine.  We do
not attempt to generalize these observations to the broader range of
issues that the United States is involved with at the United Nations. 

The United Nations agreed with the factual information presented in
the report, and reiterated its view that the U.N.'s financial
situation is precarious and that borrowing from one account to cover
deficits in another is imprudent.  The Department of State and the
United Nations also provided technical comments that we incorporated
as appropriate.  Department of State and U.N.  comments are reprinted
in appendixes IV and V, respectively. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :4

To determine the U.N.'s financial status, we reviewed audit reports
and U.N.  budgets and analyzed data on cash flow projections, unpaid
contributions, and internal borrowing.  We also met with the U.N. 
Under Secretary General for Management, other U.N.  officials, and
the U.N.  Board of Auditors.  We did not include the U.N. 
specialized agencies or other affiliated agencies in our review. 

Because we are an agency of the United States, we do not have direct
audit authority to review the operations of international
organizations, including the United Nations.  This lack of audit
authority resulted in certain limitations being placed on the scope
of our work.  Although U.N.  officials consented to our study and
Secretariat staff were helpful and forthcoming in interviews, the
United Nations did not provide access to internal financial documents
nor information about what is owed to other peacekeeping contributors
for specific peacekeeping missions.  Also, information on year-end
cash balances prior to 1994 was not available.  These restrictions
did not allow us to verify the U.N.'s cash flow estimates and total
amounts owed to member states for troops and contingent-owned
equipment. 

To determine the impact of unpaid contributions on U.S.  policy
interests, we reviewed recent U.N.  Security Council and General
Assembly decisions, delegation statements before the U.N.  Security
Council and General Assembly, and U.S.  policy statements.  We also
interviewed U.S.  officials at the Department of State and the U.S. 
Mission to the United Nations responsible for managing U.S. 
participation in the United Nations.  We did not independently verify
the information obtained from the United Nations and the State
Department. 

We conducted our work from February to April 1998 in accordance with
generally accepted government auditing standards. 


---------------------------------------------------------- Letter :4.1

We are providing copies of this report to the Secretary of State, the
U.S.  Ambassador to the U.S.  Mission to the United Nations, the U.N. 
Secretary General, and the Chairman, U.N.  Board of Auditors.  This
report will also be made available to others on request. 

Please contact me at (202) 512-4128 if you or your staff have any
questions about this report.  Major contributors to the report were
Harold Johnson, Tetsuo Miyabara, Zina Merritt, Michael Rohrback, and
David Bruno. 

Benjamin F.  Nelson
Director, International Relations
 and Trade Issues


BACKGROUND
============================================================ Chapter I



   (See figure in printed
   edition.)


   BACKGROUND
---------------------------------------------------------- Chapter I:1


The United Nations obtains its operating funds through (1) regular
budget assessments, (2) peacekeeping assessments, and (3)
international criminal tribunals assessments.  About 98 percent of
these funds come from regular budget and peacekeeping assessments and
2 percent from international criminal tribunals' assessments.  In
1997, these assessments totaled about $2.4 billion--$1.1 billion for
regular budget, $1.2 billion for peacekeeping, and $35.2 million for
the international criminal tribunals.  By February 28, 1998, U.N. 
members owed about $2 billion in unpaid contributions for 1997 and
prior years (arrears)--$461.3 million for regular budget, $1.5
billion for peacekeeping, and $10.7 million for the international
criminal tribunals.  U.N.  members also owed about $1.2 billion for
the current year's assessments. 

The United States is the U.N.'s largest contributor.  In 1997, the
United States paid about $627.8 million of the $707.7 million it was
assessed to the United Nations--more than any other member state.  It
paid about $315.6 million for the regular budget,\1 $302.4 million
for peacekeeping, and $9.8 million for the international criminal
tribunals.  However, the United States still owes the largest amount
of unpaid contributions, particularly for peacekeeping missions, for
1997 and prior years (arrears). 


--------------------
\1 The $315.6 million for regular budget payments includes a $27.3
million credit from surplus funds in the U.N.'s Tax Equalization
Fund. 


REGULAR U.N.  BUDGET AND
PEACEKEEPING CASH FLOWS
=========================================================== Chapter II



   (See figure in printed
   edition.)


   REGULAR BUDGET AND PEACEKEEPING
   YEAR-END CASH BALANCES, 1994-98
--------------------------------------------------------- Chapter II:1


The U.N.'s combined regular budget and peacekeeping cash balance
between 1994 and 1997 has ranged from $453 million to $728 million at
year end.  The U.N.  Under Secretary General for Management estimates
that the United Nations will have a 1998 year-end cash balance,
excluding funds for the international criminal tribunals, of about
$577 million.  The U.N.'s monthly operating expenses, including staff
costs, average about $200 million, or $2.4 billion per year.  In
addition, the United Nations currently owes about $1.2 billion to
members who have contributed troops, equipment, and services to
peacekeeping missions.  As shown in the following two slides, from
1994 to 1997, the United Nations has had negative regular budget
year-end balances and positive peacekeeping balances.  It has been
able to maintain an overall positive cash balance by deferring
payments to countries that contribute to peacekeeping efforts and
covering regular budget shortfalls from peacekeeping account funds. 



   (See figure in printed
   edition.)


   REGULAR BUDGET YEAR-END CASH
   BALANCES, 1994-98
--------------------------------------------------------- Chapter II:2


Beginning in 1994, the gap between assessment levels and member
states' irregular payments has caused the regular cash account to be
in deficit by the end of each year.  Based on the payment patterns of
the prior 4 years, particularly the last 4 months of each year, the
U.N.  Under Secretary General for Management projects a regular
budget deficit of about $184 million for the end of 1998.  He
estimates that during 1998 the United Nations will have to borrow 25
percent of the available cash in the peacekeeping accounts to cover
the deficit in the regular budget. 



   (See figure in printed
   edition.)


   PEACEKEEPING YEAR-END CASH
   BALANCES, 1994-98
--------------------------------------------------------- Chapter II:3


As the number of large and complex peacekeeping operations authorized
by the U.N.  Security Council grew between 1990 and 1994, so did U.N. 
member states' peacekeeping assessments.  This resulted in
significant on-hand cash balances in the peacekeeping accounts for
the U.N.'s fiscal years beginning in 1994.  Between 1995 and 1997,
these operations decreased, as did member states' assessments.  As a
result, the levels of peacekeeping cash decreased from $923 million
in 1995 to $874 million in 1996 and to $791 million in 1997. 

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 peacekeeping missions is uncertain, and the
troop and equipment requirements change.  Based on prior year's
payment patterns, the U.N.  Under Secretary General projects that the
cash in the peacekeeping accounts would be about $761 million, the
lowest level in 4 years, by the end of 1998. 


UNPAID ASSESSMENTS BY U.N. 
MEMBERS
========================================================== Chapter III



   (See figure in printed
   edition.)


   UNPAID ASSESSMENTS BY ALL U.N. 
   MEMBERS, 1990-97
-------------------------------------------------------- Chapter III:1


The United Nations depends on the contributions of its 185 member
states to maintain its operations.  U.N.  members have traditionally
been slow in making their current year contributions, and as of
February 28, 1998,
166 members had arrears.  According to statements by the U.N. 
Secretary General and the Under Secretary General for Management,
arrears are the major cause of what they consider to be a precarious
financial situation. 

According to the United Nations, as of February 28, 1998, member
states owed about $2 billion in unpaid contributions for 1997 and
prior years (arrears)--$461.3 million for regular budget, $1.5
billion for peacekeeping, and $10.7 million for the international
criminal tribunals.  See appendixes I and II for the status of unpaid
contributions for each U.N.  account and by member state.  According
to the U.N.  Under Secretary General for Management, in comparison to
past years, a growing number of members are now paying more or all of
their assessments.  For example, over the past 3 years, the Russian
Federation has paid over $300 million of its unpaid assessments from
prior years.  However, in some cases, unpaid contributions have been
the result of the member's inability to pay.  For example, Brazil,
Belarus, and Ukraine have experienced financial difficulties for
several years and have not paid their assessments in full or on time. 
Other members, such as Japan, make partial payments during the
assessment year.  Although Italy usually makes its payment in full at
the beginning of each calendar year, it has yet to pay its 1998
assessment.  Since the early 1980s, a portion of the U.S.  payment
has been withheld for specific activities or because U.S.  law caps
the peacekeeping assessment at 25 percent.  Other portions have been
conditioned on the U.N.'s undertaking reforms. 



   (See figure in printed
   edition.)


   OUTSTANDING CONTRIBUTIONS BY
   COUNTRY, 1997 AND PRIOR PERIODS
-------------------------------------------------------- Chapter III:2


As of February 28, 1998, 166 U.N.  members were $2 billion in arrears
to the U.N.'s regular, peacekeeping, and international criminal
tribunal budgets.  Members owing the most were the United States,
with about $1.3 billion, or 64.2 percent; Ukraine, $226 million, or
11.2 percent; Russian Federation, $140 million, or 7 percent; Japan,
$89 million, or 4.4 percent; Belarus, $55 million, or $2.7 percent;
and Brazil, $29 million, or 1.4 percent.  The other 160 countries
owed about $180 million, or 9 percent.  The Russian Federation is
rapidly paying down its arrears.  Ukraine, Belarus, and Brazil have
been experiencing severe financial problems and have indicated that
they are unable to pay their arrears at this time.  According to a
State Department official, only the United States has not paid its
arrears because of policy reasons. 



   (See figure in printed
   edition.)


   STRUCTURAL IMPACT OF UNPAID
   CONTRIBUTIONS
-------------------------------------------------------- Chapter III:3


According to the U.N.  Under Secretary General for Management, the
continuing large amount of arrears (both the failure to pay
assessments in full and to pay them on time) has created a structural
deficit that could develop into a serious financial crisis if members
begin demanding payment of amounts due them for providing goods and
services to U.N.  peacekeeping operations.  The structural problem
arises from the fact that U.N.  programs and activities are planned
and implemented on the basis that 100 percent of the budgeted amounts
will be assessed to members, and that assessments will be paid in
full and on time.  The unpredictability of U.N.  members' payments is
not a factor in developing its budgets.  As noted, this condition has
prevailed for many years, and arrears have continued to accumulate. 

According to U.S.  Mission officials, the U.S.  payment practice of
starting regular budget payments no earlier than October 1, 8 months
after they are due, and completing regular budget payments up to 22
months after due dates has a much more serious affect on the U.N.'s
cash flow and ability to meet its obligations than do the arrears. 
The U.N.'s cash flow problems stem largely from this U.S.  delay in
payments.  The United States is the only major country that regularly
schedules payments with this delay factor. 



   (See figure in printed
   edition.)


   U.N.  CALCULATION OF REGULAR
   BUDGET ARREARS, 1997 AND PRIOR
   PERIODS
-------------------------------------------------------- Chapter III:4

   Note:  The United States
   withheld $162 million for
   legislative and policy actions
   and $151 million is conditioned
   on the State Department's
   certification that certain
   legislative requirements have
   been fulfilled.

   (See figure in printed
   edition.)


The U.N.'s records show that the United States owes about $373
million for regular budget arrears.  Of this amount, as of February
28, 1998, the United States has agreed to pay $60 million and
withhold $313 million for legislative requirements or policy
determinations; $151 million of which will be paid when specific
conditions are met.  Table III.1 shows the U.S.  withholdings for the
U.N.  regular budget. 



                              Table III.1
                
                 U.S. Regular Budget Withholdings as of
                           February 28, 1998

                         (Dollars in millions)

Purpose                                      Withheld amount
----------------------------------  ----------------------------------
U.S. legislative withholdings
Construction of the Conference                     $29
 Center for the Economic
 Commission of Africa (Addis
 Ababa) in the late 80s during
 the famine
U.N. assistance to the Palestine                    17
 Liberation Organization
Sunquist Amendment prohibiting a                   6.3
 portion of the U.S.
 payment to the U.N. because of
 kickbacks paid from Soviet
 nationals' salaries to their
 governments for their salaries
Kasten Amendment of the mid-1980s                   1
 preventing payment for
 excessive U.N. post adjustments
Assessment rate increase in early                  0.7
 1980s following the
 breakup of Czechoslovakia
Subtotal                                           $54
U.S. policy withholding
Withheld payment to the U.N. Tax                   $100
 Equalization Fund
 because of the asserted excessive
 tax reimbursements
 paid to U.S. nationals employed
 by the United Nations
Law of Sea Preparatory Commission                   8
Subtotal                                           $108
Funds withheld until U.N. meets
 reform conditions\a
Office of Internal Oversight                       $51
 Services\b
U.N. regular budget not to exceed                  100
 $2.533 billion
Subtotal                                           $151
======================================================================
Total                                              $313
----------------------------------------------------------------------
\a These amounts are not disputed. 

\b This amount was paid in March 1998. 

Source:  Department of State. 



   (See figure in printed
   edition.)


   U.N.  CALCULATION OF
   PEACEKEEPING ARREARS, 1997 AND
   PRIOR PERIODS
-------------------------------------------------------- Chapter III:5

   Note:  The United States
   withheld $254 million for
   legislative and policy actions. 
   This amount does not include
   $14 million to be paid from
   fiscal year 1998
   appropriations.

   (See figure in printed
   edition.)


The U.N.'s records show that the United States owes about $917
million for peacekeeping arrears.  Of this amount, as of February 28,
1998, the United States has agreed to pay $663 million and withhold
$254 million for legislative requirements or policy determinations. 
Table III.2 shows the U.S.  withholdings for U.N.  peacekeeping. 



                              Table III.2
                
                  U.S. Peacekeeping Withholdings as of
                           February 28, 1998

                         (Dollars in millions)

Purpose                                      Withheld amount
----------------------------------  ----------------------------------
U.S. policy cap on peacekeeping                    $123
 assessment at 30.4 percent versus
 the 31.7 percent set by the
 General Assembly to cover
 peacekeeping contribution
 shortfalls following the breakup
 of the Soviet Union
U.S. legislative cap on                            128
 peacekeeping assessments at 25
 percent after October 1, 1995,
 versus U.N. assessment of 30.4
 percent
U.S. policy withholding of U.S.                     3
 payment for the United Nations
 Mission for the Referendum in
 Western Sahara (MINURSO) pending
 outcome of U.S. negotiations
======================================================================
Total                                              $254
----------------------------------------------------------------------
Source:  Department of State. 


REIMBURSEMENTS DEFERRED TO
PEACEKEEPING CONTRIBUTORS
=========================================================== Chapter IV



   (See figure in printed
   edition.)


   COUNTRIES NOT PAID FOR
   PEACEKEEPING CONTRIBUTIONS
--------------------------------------------------------- Chapter IV:1


Although the United Nations has been able to pay for external
services provided by contractors and personnel costs, it has not paid
all U.N.  members for troops, equipment, and other services
contributed for peace operations.  The U.N.'s regular budget cash
deficits have led to prolonged periods of borrowing from its
peacekeeping accounts to maintain its operations.  These funds are
reimbursed to the peacekeeping accounts as U.N.  members pay regular
budget assessments.  The availability of peacekeeping cash from which
to borrow has sustained the United Nations.  However, the U.N.'s
ability to borrow will, over time, diminish because funds flowing in
from the assessments for peacekeeping missions have declined.  The
following slides and appendix III show the amounts owed by the United
Nations to peacekeeping contributors. 



   (See figure in printed
   edition.)


   TOTAL OWED PEACEKEEPING
   CONTRIBUTORS, 1994-97
--------------------------------------------------------- Chapter IV:2


At the end of December 1997, the United Nations owed about $1.2
billion in reimbursements to U.N.  member states for contributions
for peacekeeping operations, including troops, equipment--referred to
as contingent-owned equipment--letters of assist requesting specific
services, and death and disability payments.  According to the United
Nations, in some cases, the debt poses a hardship for those member
states, such as Bangladesh, Pakistan, and Zimbabwe, that cannot
afford to go unpaid for long periods of time. 

Payments for contingent-owned equipment constituted about 63 percent
of the amount the United Nations owed to member states as of December
1997.  Before April 1996, the amounts owed for the use of
contingent-owned equipment were based on the contributing countries'
estimates.  In some cases, the United Nations disputed these claims. 
After an extensive review, the U.N.  General Assembly adopted new
guidelines for determining reimbursement to member states for
contingent-owned equipment provided to peacekeeping missions.  These
guidelines include standards for record keeping, classification of
equipment, and rates for equipment use.  Reimbursement rates for
troop costs are based on rates established by the General Assembly;
currently, this rate is $988 monthly for each troop of the
contributing country's armed forces. 

The Secretary General announced in 1996 his intention not to allow
the amounts already owed to member states to increase, if at all
possible.  The Secretary General intends to pay down the level of
debt to member states when substantial arrearage amounts are paid. 
Actual reimbursement for troop costs and contingent-owned equipment
will be paid when amounts over and above the day-to-day requirements
become available to make a payment.  Death and disability payments
and payments for letters of assist are normally made to governments
shortly after the claims are certified.  In 1997, the United Nations
paid peacekeeping contributors $327 million. 



   (See figure in printed
   edition.)


   TOP FIVE COUNTRIES OWED
   REIMBURSEMENT FOR CONTRIBUTIONS
   TO PEACEKEEPING
--------------------------------------------------------- Chapter IV:3

   Note:  Voluntary contributions
   are not included.  Not all
   equipment cost are reported to
   the United Nations.  In some
   cases, countries dispute
   amounts owed.  The United
   Nations recently adopted new
   guidelines for reimbursing
   contingent-owed equipment
   costs. 

   (See figure in printed
   edition.)


As of December 31, 1997, the United Nations owed 71 member states
about $1.2 billion for troops, equipment, and other services they had
provided to peacekeeping missions.  The members owed the most were
France, $151.2 million; the United States, $109.2 million; the United
Kingdom, $65.9 million; Italy, $62.5 million; and Belgium, $58.1
million.  The remaining 66 countries were owed $728.3 million.  The
largest amount owed for troops alone was to Pakistan for about $20
million.  Appendix III provides a complete listing of countries owed
reimbursements for contributions to peacekeeping operations.  The
United Nations maintained an overall positive cash balance by
deferring reimbursement payments to these countries and, in effect,
borrowing from these countries to pay current operating expenses of
the United Nations.  According to U.N.  officials, if members'
arrears were paid, the funds would likely be used by the United
Nations to liquidate these debts. 


IMPACT OF UNPAID CONTRIBUTIONS ON
U.S.  INTERESTS
============================================================ Chapter V



   (See figure in printed
   edition.)


   IMPACT OF UNPAID CONTRIBUTIONS
   ON U.N.  DECISIONS WE EXAMINED
---------------------------------------------------------- Chapter V:1

Note:  Advisory Committee for Administrative and Budgetary Questions
(ACABQ). 


The U.S.  arrears situation at the United Nations has had an effect
on some U.N.  decisions of interest to the United States.  On U.N. 
decisions concerning Iraq, the Congo, and the Central African
Republic, arrears did not appear to have an impact and U.S. 
positions prevailed.  However, evidence we found suggests that U.S. 
arrears have created a more difficult environment in which to advance
U.S.  initiatives in other areas.  For example, a U.S.  initiative to
streamline administrative operations for a peacekeeping operation in
Lebanon was deflected when U.S.  arrears were discussed.  According
to U.S.  Mission officials, the inability to enact legislation to pay
U.S.  arrears in 1997 ensured that the assessment rate for the
regular budget would not be reduced and caused the United States to
lose a seat on the Advisory Committee on Administrative and Budgetary
Questions.  In addition, the United States could potentially lose its
vote in the General Assembly if it does not pay some of its arrears
by January 1, 1999.  The following slides discuss the impact of U.S. 
unpaid contributions on U.S.  interests. 



   (See figure in printed
   edition.)


   IMPACT OF U.S.  UNPAID
   CONTRIBUTIONS ON SECURITY
   DECISIONS
---------------------------------------------------------- Chapter V:2


Although U.S.  arrears created a more difficult environment to
advance U.S.  positions, the impact on the security issues we
examined appeared to be limited.  For example, U.S.  arrears were
raised by Security Council members when negotiating resolutions on
Iraq and according to U.S.  officials made their work more difficult. 
Nonetheless, the Security Council passed resolutions in March 1998
and in December, October, and June 1997 condemning Iraq and
reaffirming Iraq's obligation to cooperate fully and unconditionally
with the U.N.  Special Commission (UNSCOM), which is charged with
ensuring that Iraq destroy, remove, or render harmless its chemical
and biological weapons.  On March 2, 1998, the Security Council
passed Resolution 1154, which stressed Iraq's obligations to give
UNSCOM immediate, unconditional, and unrestricted access to carry out
its work and stated that any violation would have the severest
consequences for Iraq.  The President of the United States said that
this resolution sends the clearest message to message to Iraq and
that if the resolution is complied with it would achieve what the
United States wanted.  Further indicating that U.S.  arrears had a
limited impact on decisions regarding Iraq, an ambassador to the
United Nations from another country stated that U.S.  arrears is a
separate issue and is not linked to a situation as critical as Iraq. 

The U.S.  position that there is no clear mandate or rationale for
establishing a peacekeeping mission in the Congo was supported by the
Security Council.  Further, the United States has been able to
sustain its position on the Central African Republic that certain
conditions, such as supplying a smaller force than proposed, must be
agreed to before the United States can support a peacekeeping
mission.  These revisions were made to the U.N.'s plan for the
peacekeeping mission.  In both of these cases, U.S.  arrears had a
limited impact on the decisions because the United States could veto
any new operations and the U.S.  power to veto would not be effected
by arrears. 

U.S.  proposals to consolidate the administrative units of the U.N. 
Interim Force in Lebanon (UNIFIL) with several other U.N.  missions
in the Middle East were rebuffed, according to a U.S.  Ambassador to
the United Nations.  These discussions were deflected when Security
Council members made reference to U.S.  arrears.  According to State
Department and U.S.  Mission officials, discussions on other
peacekeeping missions have also been interrupted by questions about
U.S.  arrears. 



   (See figure in printed
   edition.)


   IMPACT OF U.S.  UNPAID
   CONTRIBUTIONS ON OTHER U.N. 
   ISSUES
---------------------------------------------------------- Chapter V:3


According to the U.S.  Ambassador to the United Nations, U.S. 
arrears was the primary reason why the United States lost its seat on
the ACABQ in 1996.  State Department documents indicate that a number
of factors contributed to this decision, but the deciding factor was
U.S.  arrears.  These documents indicated that other members would
not vote for a country in arrears to sit on the most important U.N. 
budget and financial committee.  This committee reports to the Fifth
Committee on its examinations of the regular, peacekeeping, and
international criminal tribunal budgets and other accounts of the
United Nations.  It also advises the General Assembly on other
administrative and financial matters referred to it.  The United
States had maintained a seat on the ACABQ since its inception in
1946.  To regain a seat on the ACABQ, the United States plans to
submit the name of a candidate to the Fifth Committee for a seat that
will become vacant on December 31, 1998.  Members of the committee
are appointed by the General Assembly on the recommendation of the
Fifth Committee on the basis of broad geographical representation,
personal qualifications and experience.  However, some delegations
have stated that they will not support a U.S.  seat unless the U.S. 
arrears are paid in full. 

With respect to U.N.  procurement, an attempt was made in March 1998
to pass a General Assembly resolution restricting U.N.  procurement
to countries that are current in their assessed payments.  However,
to gain consensus, the resolution was modified and merely called for
a study of this matter.  Specifically, the resolution requests the
Secretary General to study the practices being implemented at other
multilateral organizations.  In 1997, the U.N.  headquarters
procurement division procured about
61.4 percent, or $189.9 million, of its goods and services from U.S. 
vendors.  In 1996, the U.N.  system, including specialized and other
affiliated agencies procured about 10.4 percent, or $276.7 million,
from U.S.  vendors. 



   (See figure in printed
   edition.)


   IMPACT OF U.S.  UNPAID
   CONTRIBUTIONS ON REDUCING THE
   U.S.  ASSESSMENT RATE
---------------------------------------------------------- Chapter V:4


According to State Department officials, the United States may have
been able to reach its goal of reducing its regular U.N.  budget
assessment rate from 25 percent to 22 percent had it not been for the
U.S.  arrears, although opinions on this issue are mixed.  The U.S. 
Ambassador to the United Nations for U.N.  Reform and other U.S. 
officials said major U.N.  contributors were somewhat open to the
possibility of a 22-percent cap as the maximum assessment for any
individual U.N.  member.  Since the other major contributors would
most likely have had to make up for this reduction in funding, State
officials said their consent was crucial.  However, U.S.  officials
also stressed that the Group of 77 (a group of developing nations),
and China in particular had not reached consensus on the 22-percent
cap and their consent was also necessary.  U.S.  and Chinese
representatives had begun to discuss the possibility of a 22-percent
ceiling, but the discussions were ended when U.S.  legislation to
clear the arrears was not enacted in 1997. 

The special peacekeeping assessment scale is based on a complex
formula adopted by the General Assembly in 1973.\1 The underlying
rationale for the formula was that (1) permanent Security Council
members should pay more than others to recognize their veto power
over peacekeeping missions and (2) developing countries should be
given some relief.  Since this special scale was adopted, the United
States has paid in excess of 30 percent for peacekeeping missions. 
However, beginning in October 1995, U.S.  law limited the amount that
the United States could pay to 25 percent.\2 The United Nations,
however, continues to assess the United States at the higher special
peacekeeping rate--currently about 30.5 percent.  If the regular
budget were capped at 22 percent, the U.S.  peacekeeping assessment
would automatically be reduced; however, using the U.N.  formula, the
amount would still likely exceed 25 percent.  According to officials
at the U.S.  Mission to the United Nations, discussions had begun
with China and the Russian Federation to see if they would agree to
pay a greater portion of the reductions for developing countries. 
U.S.  Mission officials also said that although no agreement has yet
been reached, both have agreed to the principle that the permanent
members of the Security Council should pay a minimum or floor amount. 



   (See figure in printed
   edition.)


--------------------
\1 The U.S.  assessment is calculated by taking the regular budget
assessment of 25 percent and adding to it the proportionate share of
the reductions allowed for developing countries.  The five permanent
members of the Security Council pay for the reductions allowed for
developing countries in proportion to their regular budget
assessment.  For a discussion of how the peacekeeping and regular
budget are calculated, see United Nations:  How Assessed
Contributions for Peacekeeping Operations Are Calculated
(GAO/NSIAD-94-206, Aug.  1, 1994). 

\2 22 U.S.C.  287e note. 


   IMPACT OF U.S.  UNPAID
   CONTRIBUTIONS ON REOPENING
   SCALE OF ASSESSMENTS
---------------------------------------------------------- Chapter V:5

In December 1997, the General Assembly adopted a resolution
establishing the scale of assessments for 1998-2000.  The resolution
(1) set the U.S.  assessment at 25 percent; (2) lowered the
assessment rates for 133 countries; and (3) stated the United Nations
would "consider reviewing the scale for the years 1999-2000 during
its resumed fifty-second session," in light of all relevant factors,
including the status of contributions.  According to U.S.  and U.N. 
officials and documents, the Fifth Committee may, but is not bound
to, request that the Committee on Contributions reopen discussions
depending on whether the United States enacts legislation to provide
sufficient funding to pay all arrears, including disputed amounts. 

Officials indicated that the timing of enacting such legislation is
important because the Fifth Committee meets in a resumed session in
May 1998 and sets the agenda for the Committee on Contributions'
annual meeting in mid-June.  The European Union delegate has said
that European Union countries would only agree to reopen the
discussions after the United States has enacted legislation enabling
it to clear its arrears in full.  \3 Unless these conditions have
been met assessments, the Committee on Contributions will not discuss
the issue and will be unlikely to convene again in 1998. 

If discussions on the scale of assessment are reopened, the
probability of lowering the ceiling to 22 percent is remote,
according to U.S.  officials.  Consensus is required to readjust the
scale of assessments.  Therefore, any country on the Fifth Committee
can block proposed changes by dissenting, as the United States could
have done when the decision was adopted to leave the U.S. 
contribution rate at 25 percent.  Several issues would have to be
resolved in this regard.  First, any reduction of the U.S. 
assessment rate would require other members to make up the difference
and negotiations would be complicated.  Members of the European Union
would most likely have to increase their assessments, and poorer and
heavily indebted countries have already accomplished their objective
of substantially lowering their assessment rates, an act they would
not easily reverse. 

Japan will be assessed at 20.5 percent for the year 2000 and it has
stated a desire to reduce this rate by renegotiating the discounts
given to developing countries.  As for China, its regular budget
assessment rate is less than 1 percent, and it has dismissed any idea
that its assessment rate should be increased.  Moreover, U.N. 
members would have to decide how to deal with U.S.  residual arrears,
or amounts that the United States have refused to pay because of U.S. 
legislative or policy reasons.  The General Assembly could authorize
the United Nations to place the amounts owed by the United States in
a special account.  However, according to U.S.  officials, their
efforts to have such an account established for the amounts in
dispute have been rebuffed. 



   (See figure in printed
   edition.)


--------------------
\3 Clearing arrears in full would mean that the United States would
have to pay the arrears amount calculated by the United Nations,
including the amounts deducted by the United States for legislative
and policy withholdings. 


   IMPACT OF U.S.  UNPAID
   CONTRIBUTIONS ON GENERAL
   ASSEMBLY VOTE
---------------------------------------------------------- Chapter V:6


Article 19 of the U.N.  Charter states that a member that is in
arrears in the payment of its financial contributions to the United
Nations will have no vote in the General Assembly if the amount of
arrears equals or exceeds the assessments due for the preceding
2-full years.  Security Council rights, such as the power of a
permanent member to veto any resolutions, are not affected.  The
United States received notice that it would not be in jeopardy for
1998. 

By the end of 1998, however, the United States could have arrears
exceeding its assessments for the last 2 years, based on estimates by
the Department of State and the U.S.  Mission.  In this regard, the
assessment for 1997 and 1998, including the regular budget,
peacekeeping, and tribunals, is about $1.3 billion ($708 million for
1997 and $572 million for 1998).  Based on the existing U.S.  arrears
(as determined by the United Nations) and an estimated U.S.  payment
of between $363 million and $393 million from its 1998 and prior year
appropriations, the U.S.  arrearage would be about $1.5 billion by
January 1, 1999.  The United States could retain its vote by paying
between $211 and $241 million from funds reallocated from other
accounts within the existing appropriations or paid from fiscal year
1999 appropriations for the United Nations before the end of 1998. 
Table V.1 shows the projected U.S.  arrears on January 1, 1999. 



                               Table V.1
                
                  Projected U.S. Arrears on January 1,
                                  1999

                         (Dollars in millions)

Assessments and payments                                         Range
----------------------------------------------------------  ----------
U.S. payments due through 1998                                  $1,884
 (arrears plus 1998 assessment)
Less estimated payments made during 1998                       393-363
 (fiscal year 1998 and prior years appropriations)
Subtotal: Arrears balance on January 1, 1999                   $1,491-
                                                                $1,521
Less cumulative assessments for most recent 2-year period       $1,280
======================================================================
Net shortfall on January 1, 1999, to retain voting               $211-
 privilege                                                      $241\a
----------------------------------------------------------------------
\a This amount could be paid from the fiscal year 1999 appropriation
for the United Nations or other yet-to-be-enacted legislation to pay
U.S.  arrears. 



   (See figure in printed
   edition.)


   VOTING RIGHTS HAVE BEEN DENIED,
   BUT SOME EXCEPTIONS HAVE BEEN
   MADE
---------------------------------------------------------- Chapter V:7


As of February 4, 1998, 39 members had lost their vote under article
19.  By May 11, 1998, that number was reduced to 27 as payments were
made by members, thus permitting them to regain their voting
privileges.  Other U.N.  members, such as France, the former Soviet
Union, and China have been in similar situations for their refusal to
pay certain assessments but were allowed to continue their voting
privileges.  In the case of China, the General Assembly authorized
the United Nations to place the amounts owed in a special account. 
However, according to U.S.  officials, to date, U.S.  efforts to have
such an account established for the amounts in dispute have been
rebuffed.  Recently, the General Assembly agreed to allow three other
members--Comoros, Liberia and Tajikistan--to maintain their voting
privileges because their failure to pay was due to conditions beyond
their control.\4

In the past, a number of governments have contested U.N.  arrears,
and the General Assembly has agreed to either waive article 19 or
forgive the debt owed.  For example, in 1964-65, although the former
Soviet Union, France, and several other countries supported the
resolution creating the United Nations Emergency Force in the Middle
East (UNEF, later referred to as UNEF I) and the United Nations
Operation in Congo (ONUC), they refused to pay for peacekeeping
operations and U.N.  regular budget expenses related to the
operations.  By 1964, arrears of the former Soviet Union exceeded the
level permitted to maintain its voting rights in the General
Assembly.  France became subject to the article 19 sanction by
January 1, 1965.  The U.S.  Representative to the United Nations
announced before the General Assembly that there could be no double
standard in the United Nations.  If any member state could insist on
making an exception to its obligations with respect to certain
activities, "the United States reserves the same option to make
exceptions." The General Assembly decided to waive all member's
arrears for these operations.  The arrears for these countries are
still counted in the total unpaid contributions owed, but are not
included in calculations for article 19. 


--------------------
\4 Article 19 of the U.N.  Charter provides that the General Assembly
may permit these members to vote if it is satisfied that the failure
to pay is due to conditions beyond the control of the member. 


STATUS OF UNPAID CONTRIBUTIONS BY
U.N.  ACCOUNT, AS OF FEBRUARY 28,
1998
=========================================================== Appendix I

                                                     1998 Unpaid
                                                  contributions\
U.N. account                             Arrears               a           Total
--------------------------------  --------------  --------------  ==============
Regular budget                      $461,265,034    $781,526,082  $1,242,791,116
Peacekeeping missions
UNEF/UNDOF                            13,340,226      16,375,356      29,715,582
UNIFIL                               109,735,917      60,304,686     170,040,603
UNIMOG                                   124,691               0         124,691
UNAVEM, UNAVEM II,
 UNAVEM III, MONUA                   115,085,899      34,337,444     149,423,343
UNTAG                                    410,972               0         410,972
UNIKOM                                 9,794,359       5,654,260      15,448,619
MINURSO                               48,009,658       8,795,977      56,805,635
ONUSAL, ONUCA                          3,273,521               0       3,273,521
UNTAC, UNAMIC                         46,276,497               0      46,276,497
UNPROFOR                             691,186,539               0     691,186,539
UNOSOM, UNOSOM II                    290,371,428               0     290,371,428
ONUMOZ                                38,595,279               0      38,595,279
UNFICYP                               14,920,258      13,663,103      28,583,361
UNOMIG                                 6,389,790       8,854,960      15,244,750
UNMIH                                  8,269,744               0       8,269,744
UNOMIL                                 8,169,798               0       8,169,798
UNAMIR, UNOMUR                        26,802,341               0      26,802,341
UNMLT                                     13,913               0          13,913
UNMOT                                  1,853,084       2,912,941       4,766,025
UNPREDEP                               7,212,272      24,894,744      32,107,016
UNSMIH                                 9,446,798               0       9,446,798
MINUGUA                                  324,737               0         324,737
UNMIBH                                33,988,318      86,216,525     120,204,843
UNTAES                                54,219,277      12,605,397      66,824,674

International criminal tribunals
--------------------------------------------------------------------------------
ICTY                                   6,922,707      48,292,999      55,215,706
ICTR                                   3,765,214      50,802,376      54,567,590
================================================================================
Total                             $2,009,768,271  $1,155,236,850  $3,165,005,121
--------------------------------------------------------------------------------
Note:  See contents page for list of abbreviations. 

Source:  United Nations. 


STATUS OF UNPAID CONTRIBUTIONS FOR
REGULAR BUDGET, PEACEKEEPING
MISSIONS, AND INTERNATIONAL
CRIMINAL TRIBUNALS BY MEMBER
STATE, AS OF FEBRUARY 28, 1998
========================================================== Appendix II

                                                  1998 estimated
Member state                             Arrears      assessment    Total unpaid
--------------------------------  --------------  --------------  ==============
United States                     $1,290,335,659    $414,602,512  $1,704,938,171
Japan                                 89,032,241     255,151,287     344,183,528
Ukraine                              225,889,568       9,059,415     234,948,983
Russian Federation                   139,994,014      12,910,755     152,904,769
Germany                               10,359,020      86,412,206      96,771,226
Italy                                  5,201,455      76,626,355      81,827,810
Belarus                               54,906,593       1,926,309      56,832,902
United Kingdom                                 0      49,279,146      49,279,146
Brazil                                29,429,892      17,634,465      47,064,357
Spain                                          0      36,406,393      36,406,393
France                                 6,558,519      28,570,973      35,129,492
Iran (Islamic Republic of)            14,261,888       3,533,086      17,794,974
Yugoslavia                            14,923,183         699,957      15,623,140
Belgium                                      100      15,434,470      15,434,570
China                                          0      13,410,655      13,410,655
Poland                                10,519,746       2,830,088      13,349,834
Argentina                              3,645,610       8,934,864      12,580,474
Iraq                                  11,455,764       1,014,776      12,470,540
Republic of Korea                        147,318      10,803,316      10,950,634
Mexico                                     3,994      10,903,364      10,907,358
Canada                                         0      10,478,377      10,478,377
Saudi Arabia                             936,673       6,794,956       7,731,629
Libyan Arab Jamahiriya                 5,612,883       1,821,998       7,434,881
Kazakhstan                             5,922,823       1,446,060       7,368,883
Azerbaijan                             6,470,523         700,263       7,170,786
Georgia                                6,454,415         677,032       7,131,447
Israel                                 3,105,087       3,829,380       6,934,467
Turkey                                 1,775,926       5,142,735       6,918,661
Uzbekistan                             5,569,889         579,034       6,148,923
Netherlands                                    0       5,975,607       5,975,607
Greece                                   740,201       4,912,061       5,652,262
United Arab Emirates                   3,490,032       2,048,641       5,538,673
Australia                                 30,202       5,434,779       5,464,981
Portugal                                 226,019       5,034,383       5,260,402
Republic of Moldova                    4,385,872         501,889       4,887,761
Indonesia                              2,313,116       2,013,650       4,326,766
Sweden                                   155,538       4,079,441       4,234,979
Austria                                 $552,409      $3,443,610      $3,996,019
Croatia                                2,834,625         619,192       3,453,817
Venezuela                                770,268       2,637,096       3,407,364
Lithuania                              2,542,047         525,119       3,067,166
Latvia                                 2,665,928         398,424       3,064,352
Tajikistan                             2,926,802          93,533       3,020,335
Peru                                   1,853,330         989,097       2,842,427
Bulgaria                               2,077,813         525,119       2,602,932
Denmark                                        0       2,542,622       2,542,622
Nigeria                                1,434,385         771,409       2,205,794
Norway                                        17       2,003,516       2,003,533
Finland                                        0       1,999,782       1,999,782
Thailand                                  78,548       1,839,122       1,917,670
Democratic P. R. of Korea              1,549,277         361,592       1,910,869
Armenia                                1,589,107         287,133       1,876,240
Chile                                    825,498         997,924       1,823,422
Cuba                                   1,305,060         454,509       1,759,569
Syrian Arab Republic                     999,068         721,648       1,720,716
Kyrgyzstan                             1,504,679         175,142       1,679,821
Qatar                                  1,257,949         384,516       1,642,465
Estonia                                1,282,779         268,368       1,551,147
Bosnia and Herzegovina                 1,440,010          58,380       1,498,390
Romania                                  341,932       1,141,308       1,483,240
Uruguay                                  870,772         570,348       1,441,120
Algeria                                  174,040       1,262,388       1,436,428
Ecuador                                  984,638         256,141       1,240,779
Turkmenistan                           1,145,561          17,398       1,162,959
Guatemala                                938,516         221,295       1,159,811
Liberia                                1,098,338          23,536       1,121,874
Czech Republic                           420,214         636,663       1,056,877
Philippines                               65,644         895,328         960,972
Somalia                                  949,296          11,464         960,760
New Zealand                                    0         819,219         819,219
Central African Republic                 781,523          22,773         804,296
Egypt                                          0         802,872         802,872
Comoros                                  771,264          11,464         782,728
Slovenia                                  93,454         689,001         782,455
Oman                                      67,918         581,964         649,882
El Salvador                             $433,583        $139,685        $573,268
Sao Tome' and Principe                   547,933          11,464         559,397
Gambia                                   547,897          11,464         559,361
Yemen                                    423,949         113,252         537,201
Colombia                                  32,759         499,322         532,081
Morocco                                   46,354         476,925         523,279
Congo                                    477,296          35,154         512,450
Nicaragua                                476,935          23,536         500,471
Dominican Republic                       310,346         186,145         496,491
Panama                                   279,760         185,968         465,728
Costa Rica                               254,716         197,760         452,476
Honduras                                 401,225          46,764         447,989
Haiti                                    413,753          22,773         436,526
Chad                                     419,738          11,464         431,202
Grenada                                  419,672          11,464         431,136
Cape Verde                               419,035          11,464         430,499
Guinea Bissau                            417,561          11,464         429,025
Burundi                                  417,496          11,464         428,960
Dominica                                 412,392          11,464         423,856
Seychelles                               394,260          22,773         417,033
Bolivia                                  307,864          91,225         399,089
Gabon                                    365,388          31,490         396,878
Sierra Leone                             380,774          11,464         392,238
Togo                                     364,314          22,773         387,087
Vanuatu                                  366,418          11,464         377,882
Angola                                   260,374         113,252         373,626
Cambodia                                 357,050          11,922         368,972
Lebanon                                  180,338         186,078         366,416
Sudan                                    263,476         101,943         365,419
The Former Yugoslav Republic of          309,927          53,380         363,307
 Macedonia
Trinidad and Tobago                      346,026          10,488         356,514
Rwanda                                   329,283          22,773         352,056
South Africa                                   0         350,730         350,730
Equatorial Guinea                        337,370          11,464         348,834
India                                          0         344,554         344,554
Afghanistan                              281,390          45,393         326,783
Djibouti                                 312,175          11,464         323,639
Mongolia                                 304,386          15,516         319,902
Niger                                   $293,140         $22,773        $315,913
Guinea                                   280,380          34,086         314,466
Luxembourg                                64,043         244,375         308,418
Democratic Republic of the Congo         209,095          93,225         302,320
Bahrain                                   84,891         207,608         292,499
Solomon Islands                          278,449          11,464         289,913
United Republic of Tanzania              236,859          45,393         282,252
Mauritania                               266,213          11,464         277,677
Saint Vincent and Grenadines             253,407          11,464         264,871
Cameroon                                  77,912         162,913         240,825
Madagascar                               201,229          24,485         225,714
Mali                                     185,719          34,086         219,805
Ireland                                        0         214,281         214,281
Viet Nam                                 201,133          11,293         212,426
Bahamas                                   36,953         169,836         206,789
Fiji                                     161,042          40,764         201,806
Cï¿½te d'Ivoire                             50,996         139,685         190,681
Malaysia                                       0         188,840         188,840
Paraguay                                  25,885         162,913         188,798
Ghana                                    108,144          80,038         188,182
Singapore                                      0         187,745         187,745
Tunisia                                  149,656          31,680         181,336
Bhutan                                   160,235          11,464         171,699
Senegal                                  105,439          61,853         167,292
Burkina Faso                             152,601           7,247         159,848
Suriname                                 113,414          45,393         158,807
Zimbabwe                                  45,272          99,474         144,746
Maldives                                 137,355           2,464         139,819
Kenya                                     61,129          78,650         139,779
Hungary                                        0         135,014         135,014
Kuwait                                    26,907         108,045         134,952
Swaziland                                109,643          23,536         133,179
Bangladesh                                19,714         113,252         132,966
Lesotho                                  106,248          22,773         129,021
Barbados                                  35,938          91,225         127,163
Papua New Guinea                          48,966          76,312         125,278
Pakistan                                  52,171          66,795         118,966
Botswana                                   1,690         110,516         112,206
Myanmar                                  $11,046        $100,767        $111,813
Antigua and Barbuda                       86,118          22,773         108,891
Mauritius                                  4,656         103,839         108,495
Belize                                   105,669             948         106,617
Iceland                                   21,530          74,776          96,306
Jordan                                     2,317          90,053          92,370
Marshall Islands                          89,941           1,406          91,347
Guyana                                    78,772          11,922          90,694
Namibia                                      736          76,320          77,056
Jamaica                                    1,842          65,806          67,648
Andorra                                    9,493          51,762          61,255
Saint Lucia                               57,107           2,464          59,571
Benin                                     41,906          14,773          56,679
Albania                                   24,462          28,154          52,616
Ethiopia                                  45,330           5,706          51,036
Uganda                                    14,045          25,872          39,917
Cyprus                                         0          38,269          38,269
Zambia                                     8,654          26,984          35,638
Sri Lanka                                 17,236          14,587          31,823
San Marino                                 8,769          21,649          30,418
Brunei Darussalam                          7,163          21,235          28,398
Malawi                                    13,130          14,652          27,782
Malta                                     11,362          15,674          27,036
Samoa                                     23,719           2,464          26,183
Mozambique                                24,288           1,741          26,029
Slovakia                                       0          25,867          25,867
Lao People's Democratic Republic          23,843             948          24,791
Nepal                                     12,576           3,087          15,663
Monaco                                         0          12,155          12,155
Saint Kitts and Nevis                      8,963             948           9,911
Eritrea                                    6,228           1,794           8,022
Micronesia                                 3,956           2,922           6,878
Liechtenstein                                  0           4,804           4,804
Palau                                      1,861           1,471           3,332
================================================================================
Total                             $2,009,768,271  $1,155,236,851  $3,165,005,122
--------------------------------------------------------------------------------
Source:  United Nations. 


REIMBURSEMENTS OWED TO U.N. 
MEMBERS FOR PEACEKEEPING
CONTRIBUTIONS, AS OF DECEMBER 31,
1997
========================================================= Appendix III

                              (Dollars in thousands)

                            Contingent
                                 owned    Letters of       Death &
Member state    Troops       equipment        assist    disability         Total
--------------  ------  --------------  ------------  ------------  ============
Argentina       $3,608         $14,371          $109        $3,126       $21,214
Australia            0           5,207           148             0         5,355
Austria          6,047           2,350             1         1,018         9,416
Bangladesh       9,936           7,487           236           714        18,373
Belgium          4,646          39,869        13,473            97        58,085
Botswana             0           1,082           310             0         1,392
Brazil           1,744          14,389         1,851           451        18,435
Bulgaria             0             390             0           512           902
Canada           2,749          29,209        13,084         5,348        50,390
Chile                0              86             0             0            86
China                0             228            16             0           244
Czech              273          13,783            42             0        14,098
Denmark            359          17,440         6,059             0        23,858
Djibouti             0             181             0             0           181
Egypt            3,334          10,309         7,415           188        21,246
Estonia            913               0             0             0           913
Ethiopia             0             185             0             0           185
Fiji             4,520               0             0             0         4,520
Finland          6,515          16,036         1,450            28        24,029
France           2,039         125,136        16,530         7,610       151,315
Germany            114           6,562        27,367            30        34,073
Ghana            4,950             364             0             0         5,314
Greece               0             184             0             0           184
Guatemala            0              19             0             0            19
Honduras             0              40             0             0            40
Hungary            525               9             1             0           535
India            5,949          36,196         5,208             0        47,353
Indonesia          413           6,670         2,409           105         9,597
Ireland          4,943           1,027            51         3,388         9,409
Italy              369          29,070        29,398         3,653        62,490
Jamaica              0               2             0             0             2
Japan            2,364           2,322             0             0         4,686
Jordan           1,990           9,384         1,793            98        13,265
Kenya                0           5,257         2,203             0         7,460
Republic of        441           2,642           148             0         3,231
 Korea
Kuwait               0           1,458             0             0         1,458
Luxembourg           0             $78             0             0           $78
Malawi               0             140             0             0           140
Malaysia        $1,581          16,518        $6,498             0        24,597
Mali                 0              46             0             0            46
Morocco              0           3,556             0             0         3,556
Namibia          1,489           3,516             0             0         5,005
Nepal            4,621             520         1,063             0         6,204
Netherlands         37          45,308         5,567             0        50,912
New Zealand         29           1,874         1,033             0         2,936
Nigeria            108           4,516             0             0         4,624
Norway           4,993          13,763         1,373             0        20,129
Pakistan        20,071          25,183           132           $30        45,416
Philippines          0             115             0             0           115
Poland           5,942           5,470           574         1,326        13,312
Portugal         2,695           4,904             0             0         7,599
Romania          1,448          16,919             0             0        18,367
Russian          6,261          28,572         1,161            64        36,058
 Federation
Saudi Arabia         0             958             0             0           958
Senegal              0             194             2             1           197
Singapore            0               0             1             0             1
Slovakia         3,337          21,470           111             0        24,918
Slovenia            34               0             0             0            34
Spain                0          20,127         2,543         5,086        27,756
Sweden             305          15,267         5,367             0        20,939
Switzerland          0           2,432             0             0         2,432
Thailand             0             190         1,639           344         2,173
Tunisia              0             286             0           299           585
Turkey               0           4,189         1,548             0         5,737
Ukraine          1,583          17,110           440            95        19,228
United Arab          0             106           380             0           486
 Emarites
United Kingdom   3,062          45,190        15,420         2,175        65,847
United States    3,498          25,396        80,289             0       109,183
Uruguay            158           9,264             0           100         9,522
Zambia           3,834           7,075             0             0        10,909
Zimbabwe         6,121           5,613             0            71        11,805
================================================================================
Total           $139,9        $744,809      $254,443       $35,957    $1,175,157
                    48
--------------------------------------------------------------------------------
Source:  United Nations. 




(See figure in printed edition.) APPENDIX IV
COMMENTS FROM THE DEPARTMENT OF
STATE
========================================================= Appendix III



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)APPENDIX V

*** End of document. ***