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06USUNNEWYORK2199 2006-11-30 22:14:00 CONFIDENTIAL USUN New York
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DE RUCNDT #2199/01 3342214
O 302214Z NOV 06
					  C O N F I D E N T I A L USUN NEW YORK 002199 



E.O. 12958: DECL: 11/30/2011

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

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

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

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

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

-- 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'

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).