UN CAPITAL MASTER PLAN: CLARIFICATION REQUESTED

UNCLAS USUN NEW YORK 002194 SIPDIS SIPDIS E.O. 12958: N/A TAGS: AORC KUNR UNGA SUBJECT: UN CAPITAL MASTER PLAN: CLARIFICATION REQUESTED REF: SECSTATE 190211 ¶1. ACTION REQUEST: Mission appreciates instructions from Department on upcoming Capital Master Plan negotiations in the Fifth Committee (reftel). Mission seeks clarification on paragraph 5 of reftel regarding the U.S. position on the letter of credit. Fifth Committee discussions begin on Thursday, November 30 and USUN seeks further guidance and talking points on this issue in time for these discussions. ¶2. In paragraph 5 of reftel, Department states that the U.S. can support the letter of credit facility in order to demonstrate full financial capability to contractors. However, due to U.S. legislation prohibiting paying interest on external borrowing by international organizations, USUN understands that the U.S. cannot support drawing down on the letter of credit for cash flow purposes, as the drawdown would lead to interest charges on Member States. Mission understands the U.S. legal issues surrounding interest payments, but wonders about the utility of Member States agreeing to a letter of credit facility if they do not agree to drawdowns from the letter of credit. If the UN does not have access to the funds secured by the letter of credit, as and when the need arises, contractors will have no assurance that they will be paid and may balk at entering into a contract with the UN for this project. USUN seeks to understand whether the U.S. can support the letter of credit and drawdowns, with the understanding that the U.S. cannot pay interest on any drawdowns. If the U.S. cannot agree to drawdowns from the letter of credit, Mission would appreciate clarification as to whether the U.S. is willing to consider an alternative mechanism to ensure full financial capability to contractors. Mission appreciates talking points from the Department on this subject for use during Fifth Committee discussions. BOLTON