SCALE OF ASSESSMENTS: URGENT REQUEST FOR GUIDANCE

C O N F I D E N T I A L USUN NEW YORK 002199 SIPDIS SIPDIS E.O. 12958: DECL: 11/30/2011 TAGS: AORC KUNR UNGA SUBJECT: SCALE OF ASSESSMENTS: URGENT REQUEST FOR GUIDANCE ON THE UNPAID ASSESSED DUES OF THE SOCIALIST FORMER REPUBLIC OF YUGOSLAVIA REF: A. USUN 01902 ¶B. USUN 02167 ¶C. USUN 02184 Classified By: Classified By: Ambassador Mark D. Wallace; Reasons: 1.4 (B) and (D). ¶1. (U) ACTION REQUEST: Discussion on the unpaid assessed dues of the Socialist Former Republic of Yugoslavia (SFRY) will occur on December 1 in the Fifth Committee. USUN reiterates its request for guidance in time for Fifth Committee discussions.END ACTION REQUEST ¶2. (U) SUMMARY: Ambassador Wallace met November 29 with Slovenian Ambassador Rudolf Gabrovec to discuss the issue of unpaid assessments of the SFRY. Amb. Gabrovec, the "successor" State designee leading the negotiations on this matter on behalf of the five States that emerged from the SFRY, reiterated the "successor" States' position initially conveyed by Croatian Permanent Representative Mrijana Mladineo in her meeting with Amb. Wallace on November 14 (see reftel USUN 02197). The "successor" States, who are in agreement on this issue, propose resolving the matter on the basis that they would pay arrears of the SFRY up until the date on which the last "successor" State established its separate identity in 1992, but that the arrears for the subsequent years until 2000 should be written off. The proposal by the "successor" States, in principle, adopts the second option by the Secretary-General in his report to the General Assembly on this issue (A/60/140). However, the proposal of the "successor" States differs in terms of the interpretation and implementation of that approach from the Secretary-General's report resulting in a dramatic difference SIPDIS between the "successor" States proposed payment plan and the report as to the amount owed under that approach. The report indicates that the amount owed is $8,009,454 while the proposal of the "successor" States maintains that it is $784,585. USUN seeks guidance to support, in principle, the successor State approach to resolving the matter and write off amounts arising after the last successor State established its separate identity. END SUMMARY 3.(U) The Secretary-General's report entitled Unpaid Assessed Contributions of the Former Yugoslavia (A/60/140) presents three possible options for the General Assembly to consider in resolving the matter. - Option 1: Write off the full amount of assessments and credits outstanding for the former Yugoslavia. - Option 2: Seek payment from the five successor States of arrears arising before the dissolution of the Socialist Federal Republic of Yugoslavia and to write off amounts arising thereafter, in accordance with the approach suggested by the representative of Ghana. - Option 3: Seek payment from the five successor States of arrears arising before the dissolution of the Socialist Federal Republic of Yugoslavia and to seek payment of the balance from Serbia and Montenegro based on the principle of estoppel. 4.(U) The "successor" States support Option 2, the approach proposed by Ghana, and interpret the approach to result in the amount of $784,585. This amount is in contrast to the Secretariat's interpretation of the same approach that SIPDIS calculates $8,009,454 as the amount owed. The "successor" States explain this difference in their proposal as follows: "Taking into account the above criteria put forward by the representative of Ghana the Secretariat made its own interpretation and calculation of the amount outstanding ($8,009,454) to the account of the SFRY. The firm position of the successor states however is that the amount calculated by the Secretariat does not reflect all today known facts and is inaccurate and therefore unacceptable for the successor states" (para. 21). The Secretariat's report explains the basis for its determination of the amount owed in para. 30 and annexes VI-IX of its report A/60/140. 5.(U) The proposal by Ghana follows as quoted in paras. 47-48 in the summary record of the seventh meeting of the Fifth Committee during the Fifty-Seventh Session (A/C.5/57/SR.7): -- QUOTE. With regard to the arrears of the former Yugoslavia, clear directions were needed so that the Secretariat could settle that issue definitively. General SIPDIS Assembly resolutions 47/1 and 47/229 affirmed that the Federal Republic of Yugoslavia (Serbia and Montenegro) could not continue automatically the membership of the Federal Republic of Yugoslavia, but they were the result of a political compromise and contained many legal contradictions. Although the resolutions stated that the Socialist Federal Republic of Yugoslavia was no longer a member of the United Nations, the General Assembly had continued to endorse rates of assessment for that State for periods 1995-1997 and 1998-2000 based on data obtained solely from the Federal Republic of Yugoslavia (Serbia and Montenegro). Furthermore, the opinion of the Legal Counsel, in particular regarding the principle of estoppel in the context of attempts by the Federal Republic of Yugoslavia to exercise the rights of the former Yugoslavia at the international level, was not wholly satisfactory, given that the decisions of the General Assembly proscribed the Federal Republic of Yugoslavia from participating in the General Assembly and the Economic and Social Council and from exercising rights in the name of the Yugoslavia. It was evidently not well-advised either to link the loss of membership of the former Yugoslavia to the admission of the Federal Republic of Yugoslavia into the Organization. -- In any case the letters from the permanent missions of the five successor States made it clear that the States that had constituted the former Yugoslavia were indeed successor States and that what had occurred was a dissolution and succession, not secession. The focus should therefore be on the pre-dissolution arrears and the solution adopted must not produce unintended legal effects. His delegation recommended that the Secretariat should calculate the arrears of the former Yugoslavia up to 25 June 1991, the date on which Slovenia had announced that it had ceased to exist as part of the former Yugoslavia, as well as the amounts outstanding as of 17 September 1991, 8 October 1991, 6 March 1992 and 27 April 1992, the dates on which Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia and the former Yugoslav Republic of Macedonia, respectively, had informed the Secretaray-General that they had ceased to exist as part of the former Yugoslavia, without prejudice to the recommendations of the Arbitration Commission chaired by Mr. Badinter and advised by Lord Carrington. Based on the amounts determined through that process, the Secretariat would request the five successor States to pay arrears of the former Yugoslavia taking into account the above dates and, where appropriate, the agreement which they had signed on 29 June 2001 to apportion among themselves the arrears of the former Yugoslavia. The arrears for the period from 27 April 1992, the date on which the last successor State to the former Yugoslavia had established its separate identity, up to 1 November 2001, should be written off. END QUOTE. ¶6. (C) USUN believes that the approach proposed by the "successor" States, in principle, is both reasonable and fair, although there is a great difference between the Secretariat's report (A/60/140) and the "successor" States' SIPDIS proposal on the amount owed applying the Ghanaian approach. This position is consistent with the US position articulated in the post Yugoslavia break up period that Serbia/Montenegro was not the continuation of Yugoslavia and should apply for membership. USUN also notes that this approach, waiving the accumulated assessments for the years following the date that the last successor State established its separate identity, is consistent with the position that the US took in regard to the decision of the General Assembly to waive the assessments for South Africa during the 20 years that it was excluded from participating in the General Assembly. A/Res/50/83 (17 January 1996). USUN believes that supporting the proposal of the "successor" States would benefit our efforts in the broader Scale of Assessments negotiations in two key ways. First, supporting the proposal has the strong potential to provide a unified bloc of the "successor" States within the EU, now sympathetic to the US positions, as they debate whether or not to pursue a ceiling increase (see reftel USUN 02184). Secondly, in the context of the G-77's firm opposition to any changes to the gradient (discount) in the methodology (see reftel USUN 02184),USUN could preemptively show support for the "successor" State proposal and reiterate our willingness to help less fortunate Member States across the board; in this instance and through our proposal for a stepped gradient. 5.(U) USUN accordingly seeks authority to endorse the approach proposed by the "successor" States and seeks guidance as to the US position on the amount owed based on the Ghana approach. If it is not possible to take a position on the amount owed under that approach at the December 1 meeting on Scale of Assessments, USUN would appreciate approval to support the approach of the "successor" States during negotiations while noting that there are outstanding technical issues relating to the implementation. USUN has provided relevant documents to Department for its review (see reftel USUN 02197). BOLTON