Memorandum of Advice: Reforming the UN Budget and Financing

This memorandum of advice, prepared for a foreign minister, analyzes critical aspects of the United Nations' budget and financing. It begins by examining the current formula and scale for assessment payments, discussing the need for potential changes and the decision-making processes involved. The report then delves into the procedures for enforcing payment assessments, highlighting the limitations of the UN's enforcement powers and the reliance on member state agreements and international bodies like the ICJ and Interpol. Further, it addresses the UN's authority to charge interest on late payments, the necessity of special assessments for replenishing the reserve fund, and the prohibition of borrowing funds from the peacekeeping budget to cover regular expenses. The memorandum also considers the financing of administrative expenditures related to voluntary programs and the implementation of weighted voting based on contributions. Finally, it tackles the question of whether the UN should have the power to tax, offering a comprehensive overview of the challenges and potential reforms in UN budget management.

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Memorandum of Advice
Introduction
The members belonging to the United Nations consists of 193 member States who
collectively agree upon a formula every three years referred to as the scales of assessment’. This
formula is adopted by the member states belonging to the UN for the purpose of determining the
amount each of the member states are required to contribute towards the regular budget of the
UN along with the contribution towards the peacekeeping operations. The scales of assessment
pertaining to the United Nations with respect to apportionment of expenditure of the organisation
gains its authority from the fundamental principle that the apportionment needs to be effected as
per the capability of the member states to make the payment1. It needs to be carried out with
respect to a stringent methodology that requires due consideration to be given to the elements
and criteria while making reference to the economic situation pertaining to a country. Such of
skill of assessment remains valid for a period of 3 years and needs to be amended after the lapse
of 3 years. This apportionment involves the assessment of contributions with respect to all
member states of the United Nations in percentage and requires adaptation by all of the states for
the purpose of sharing the budget worldwide basis2.
This memorandum would strive to analyse the amendments that is required to be brought
towards the present formula along with the scale for the payment of assessments. It would also
suggest the procedure for the amendment and the requirement of the same. The memorandum
would also suggest the procedure of enforcement of the payment of assessment. This
memorandum would also discuss whether the UN would have the authority in charging interest
1 McDermott, Anthony. The new politics of financing the UN. (Springer, 2016).
2 Gaibulloev, Khusrav, et al. "Personnel contributions to UN and non-UN peacekeeping missions: A public goods
approach." Journal of Peace Research 52.6 (2015): 727-742.

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upon the late payments. This memorandum would also discuss whether the UN needs to imports
a special assessment for the purpose of replenishing the reserve fund. It would also discuss
whether the UN has been prohibited to borrow funds from the budget for peacekeeping for the
purpose of covering regular expenditures relating to budget. It would also discuss whether the
financing of expenditure arising out of administrative purposes with respect to voluntary
programs needs to be financed as part of the regular budget. It would also discuss whether the
weighted voting on the basis of contributions is required to be implemented for the purpose of
voting with respect to all the issues concerned with the financing and the budget of expenses. It
would also discuss whether the UN whether the United Nations should have the power to tax.
1. Whether the current formula and scale for the payment of assessments needs to
be changed
The decision of adopting particular scales of assessment lies with the member states of
the United Nations and not the United Nations itself. Therefore, power to make amendments
towards the scales of assessment also lies with the member states of the United Nations only.
Although there has been an revision with respect to the methodology used for the scale of
assessments of 2000 but it has not been entirely revised eradicating all the inadequacy and has
left with certain inadequacy that needs to be addressed. Several options has been seem to be
probable which can be implemented for ensuring equitable payment of share with respect to
burden paid by each of the country3. One of the examples that can be cited with respect to the
same is the potential changes that can be undertaken for establishing minimum assessments with
respect to permanent along with non permanent members belonging to security Council. The
eradication of the discounts available to the wealthier Nations may also be decided upon with the
3 Nkonya, Ephraim, Alisher Mirzabaev, and Joachim Von Braun, eds. Economics of land degradation and
improvement: a global assessment for sustainable development. Cham, Germany: Springer Open, 2016.

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alteration in the formula for scales of assessment. These include Qatar, Kuwait, UAE and
Singapore4.
The formula for scale of assessment is renegotiated in every 3 years. However, while
curbing the payment made by one of the countries, some other country needs to pay a higher
amount to compensate the amount that has been discounted for one of the countries. For the
purpose of arriving at a decision two thirds majority is required in General Assembly while
dealing with important concerns. On the other hand the decisions in relation to budget or
concerns arising from budget are traditionally conducted through consensus5.
The economic condition with respect to the world and all the Nations in it has been
changing. This dynamic nature of the economies are demanding for a constant change in the
contribution that is required to be made by the Nations under the change conditions with respect
to their economies6.
2. The procedure for enforcement of the payment of assessments
The payment of assessment has been decided upon by the member states belonging to the
United Nations. The United Nations although accounts for the main organisation to which the
member states are associated but it does not have any implementary authority over the member
states with respect to the enforcement of the payment of assessments. The member states
collectively agree upon the payment of assessments for making contribution towards the
budgetary requirement of the United Nations and its peacekeeping operations. The adherence
with respect to the same arises out of the agreement arrived at by the member states through
4 Bayram, A. Burcu, and Erin R. Graham. "Financing the United Nations: Explaining variation in how donors
provide funding to the UN." The Review of International Organizations 12.3 (2017): 421-459.
5 Mingst, Karen, and Margaret P. Karns. The United Nations in the post-cold war era. Routledge, 2019.
6 Sandler, Todd. "International peacekeeping operations: Burden sharing and effectiveness." Journal of Conflict
Resolution 61.9 (2017): 1875-1897.

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negotiations. Such negotiations are conducted every three years for the purpose of deciding upon
the recent assessment scales. As the decision depends upon the member states, the adherence to
the same also depends upon the member states only. The most convenient enforcement options
that is available is the agreement that are concluded between the member states by way of
treaties and other conventions mandating the same. The implementation of the payment of
assessment is not a concern when all the parties are in agreement with the same. The concern is
said to have been posed, when there is a dispute arising between the member states with respect
to the payment of assessments7. Such a dispute may arise with respect to both the assessment
related concerns as well as payment related concerns. As per the patterns followed by the United
Nations, the disputes are best resolved by way of independent arbitrations between the parties at
dispute. In this context, it can be stated that the courts does not have any authority of
enforcement with respect to mandating the payment of the assessments. The enforcement of the
payment solely depends upon the voluntary adherence by the parties towards the rulings. The
treaties entered upon by the member states are also an important evidence that requires the
adherence but the same cannot be seen to be conclusive. However it can assist in the negotiations
for making the payment. On the other hand, the enforcement may also be effected with the help
of Interpol, which is the largest police organisation operating worldwide and was conferred with
the duty of investigation with respect to law enforcement. Moreover, the opinion of the ICJ and
the Security Council may play an important part in the enforcement of the payment of the
assessment. Moreover the principles enumerated in Article 19 along with other provisions with
respect to the UN charter also provides for several remedies as well as enforcement procedures
for the purpose of ensuring the proper enforcement of the payment of the assessment8.
7 Weiss, Thomas G., and Sam Daws, eds. The Oxford Handbook on the United Nations. Oxford University Press,
2018.
8 Coleman, Katharina P. "Extending UN Peacekeeping Financing Beyond UN Peacekeeping Operations? The
Prospects and Challenges of Reform." Global Governance 23.1 (2017): 101.

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3. Whether the UN has the power to charge interest on late payments
The United Nations although accounts for the main organisation to which the member
states are associated but it does not have any implementary authority over the member states
with respect to the enforcement of the payment of assessments. The member states collectively
agree upon the payment of assessments for making contribution towards the budgetary
requirement of the United Nations and its peacekeeping operations. The adherence with respect
to the same arises out of the agreement arrived at by the member states through negotiations.
However, there have been certain implementary processes that has been inculcated within the
provisions of the UN charter that mandates the payment of the assessments. The principles
enumerated in Article 19 along with other provisions with respect to the UN charter also
provides for several remedies as well as enforcement procedures for the purpose of ensuring the
proper enforcement of the payment of the assessment. There has been a considerable amount of
efforts made by the organisation for enforcing the payment of the assessments. This may also
include probable measures to be taken for the purpose of encouraging the full and timely
payment of assessments with respect the contributions, which are unconditional. There has been
an indexation of the arrears as well as the interest upon the arrears with respect to any late
payments that has been made by the parties9. Some of the member states has been supporting this
imposition of interest with respect to late payments made by the nation States as in their opinion
it would increase the member states to make timely payments. Certain opinion has also
suggested that the imposition of interest in the areas of payment of assessments would result in
additional accumulation of the payments of assessments along with its interests. However to
avoid these difficulties the member state has resolved into imposition of such interest in a more
logical basis. It has been resolved by the general assembly that the interest to be imposed upon
9 Council, Arctic. Member states. Vol. 6. July, 2015.

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the late payments is required to be restricted to a minimum level. This would encourage the
Nation States to make payment towards the contribution in peacekeeping operations of the
United Nations10.
4. Whether the United Nations is required to impose a special assessment for the
purpose of replenishing the reserve fund
The reserve fund for peacekeeping has been established in the year 1992. It has been
restricted to a level of 150 million dollars mechanism of cash flow for the purpose of ensuring
immediate response of organisation towards the requirements in relation to the operations of
peacekeeping. Special assessments depicts the assessments that are utilised with respect to
expenses that were not initially included within the budget of the United Nations peacekeeping
operations but has a rising eventually. The reserve accounts along with the special accounts are
solely funded by the contributions that are made by virtue of the assessments that has been
established by the state parties assembly. There has been a requirement for a fund that has been
created for the purpose of meeting the contingencies for the purpose of ensuring the fact that the
organisation is ready for dealing with the cost that has arising by virtue of any on forcing
circumstances. It can also be utilised for the purpose of meeting any expenditure that is
unavoidable and has developed going to certain existing situation that has not been foreseen for
the estimation of the same has not been accurately made11. It may also be utilised for the purpose
of wearing the enforcing meeting that has been held with respect to the state parties assembly.
Special assessments can be adopted by the United Nations for the purpose of replenishing the
reserves that has been made to deal with the contingencies. This is because one of the main
10 Kathman, Jacob D., and Molly M. Melin. "Who keeps the peace? Understanding state contributions to UN
peacekeeping operations." International Studies Quarterly 61.1 (2016): 150-162.
11 Bayram, A. Burcu, and E. Graham. "Financing global governance: explaining donor funding patterns at
international organizations." Review of International Organizations (2016).

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reason behind reduction of the reserves has been the late payments or not payments of the
assessments by the member states. Hence, for the purpose of replenishing the same, contribution
required is to be raised by imposing special assessments upon the member states12.
5. Whether UN should be prohibited from borrowing funds from the peacekeeping
budget to cover regular budget expenses
The peacekeeping budget as well as the regular budget of the United Nations is generally
created and maintained by the contributions made by the member state in accordance with the
formula or scale of payments that has been agreed along with assessed upon. The regular budget
is to be maintained by the contributions made by the member states under the regular
assessments agreed upon by the member states. However, for the purpose of creating the
peacekeeping budget, the member states would be required main contributions under special
assessment as designed by the agreement reached among the member states. All these
contribution made by the member states are to be computed in accordance with the formula
decided upon by the member states. This would largely depend upon the economic
circumstances prevailing in the globe. The contributions made by the member states are utilised
for the purpose of maintaining and creating budgets with respect to specific operations. The
peacekeeping budget consists of all the expenses that require to be undergone for ensuring the
peacekeeping activities and endeavours13. The peacekeeping operations are required to be carried
out from the peacekeeping budget. However, for the purpose of operating the regular expenses in
relation to the activities that the UN is involved in the regular budget is required to be invoked.
However it has always been witness in the history that the expenses in relation to regular
12 Wade, Lila. "Can You Pay for Peace?: The Role of Financing Frameworks in Effective Peace Operations." Journal
of International Peacekeeping 21.1-2 (2017): 152-175.
13 Rogulenko, Tatiana, et al. "Budgeting-Based Organization of Internal Control." International Journal of
Environmental and Science Education 11.11 (2016): 4104-4117.

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expenditure has always been carried out by utilising the peacekeeping budget when there is a
shortage of funds in the regular budget. Moreover, the United Nations has been following a
pattern where it has been making withdrawal from the peacekeeping budget for the purpose of
meeting the expenses arising from the regular budgetary requirements. This is because most of
the time there has been overspending with respect to regular expenses which results in the
exhaustion of the funds that has been allocated for meeting regular expenses. However recently
there has been in an effort made by the United Nations for reducing the borrowings from the
peace keeping funds for meeting regular expenses. These efforts have resulted in the reduction in
the borrowings from the peacekeeping budget for the purpose of meeting regular expenses14.
6. Whether the financing of administrative expenditure with respect to voluntary
programs can be financed as part of the regular budget
The financing in relation to the United Nations can be categorised into 3 kinds namely
the regular budget, peacekeeping budget as well as the extra budgetary expenditures. The extra
budgetary expenditures have been financed by virtue of voluntary contributions with respect to
environment, development, food aid, refugees along with other programs of social nature. The
administrative expenses pertaining to United Nations is to be borne out of the regular budget.
The funds with respect to the activities of the United Nations are derived through either assessed
contributions or voluntary contributions. The regular budget is involved with the funding of
activities along with staff with respect to United Nations that can be e termed as core institutions.
This implies the facts that regular budget is concerned with the funding of the activities of the
institutions that has been established by virtue of the charter. These institutions include Security
Council, ECOSOC, the General Assembly, ICJ, Secretariat and Trusteeship Council. Regular
14 Passmore, Timothy JA, Megan Shannon, and Andrew F. Hart. "Rallying the troops: Collective action and self-
interest in UN peacekeeping contributions." Journal of Peace Research 55.3 (2018): 366-379.

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budget is also concerned with the expenses arising out of other bodies of the United Nations as
well. The budget with respect to other activities pertaining to the United Nations is required to be
utilised for the purpose of providing support to the humanitarian and developmental activities
undertaken by General Assembly15. The activities mentioned would include UNICEF, UNDP,
UNEP, WFP, International Trade Centre, United Nations High Commissioner of Refugees,
UNRWA, United Nations Population Fund, United Nations Conference on Trade and
Development, United Nations Human Settlements Programme, United Nations Office on Drugs
and Crime, and United Nations Population Fund. These activities are generally founded out of
the regular budget with respect to their administrative expenditure. However the major portions
of the fun day of this has been accrued from the independent contributions of the member states
that has been voluntarily made or through the assessments of the member states. In this respect
the regular budget is supplemented by the extra budgetary resources. However it can be stated
that the major portions of the administrative expenses relating to the voluntary programs are
ordinarily borne by the funds available with respect to the regular budgets16.
7. Whether the voting on all issues concerning the budget along with the financing of
expenditures are required to be carried out on the basis of weighted voting based on
contributions
All the contributions and payments along with the assessment of such payments and
contribution as made by the member states of the United Nations are to be borne in accordance
with the agreement that has been arrived upon by the member states with respect to assessment
and contributions. The authority for implementing as well as formulating formula for assessing
15 Beigbeder, Yves. The internal management of United Nations organizations: The long quest for reform. Springer,
2016.
16 Patz, Ronny, and Klaus H. Goetz. "Changing budgeting administration in international organizations: Budgetary
pressures, complex principals and administrative leadership." International Bureaucracy. Palgrave Macmillan,
London, 2017. 123-150.

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the responsibility of each of the member state is determined by virtue of the agreement between
the member states. The United Nations does not itself has the power to implement of formulate
any search assessment scales or formula for the purpose of determining the contributions that is
required to be made by each of the member states towards the budget of the United Nations.
However the agreement between the member states in relation to the determination of the
formula for assessing the contribution that is required to be made by each of the members is
required to be undertaken by the assistance of a voting process. The decision for the assessment
with respect to the contributions that a member state is required to make against the budget is to
be conducted by the General Assembly. The agreement is required to be conducted by way of a
voting structure17. In this respect each of the country is assigned with only one vote with respect
to the decisions in relation to budget. The financial decisions are to be taken by each of the
countries irrespective of their contributions towards the budget of the United Nations. There is
no difference between the weightage of the vote belonging to the countries having minimum
contribution to that of the countries having maximum contribution. The countries which has been
paying 85% of the total contribution towards the United Nations budgetary requirements has the
same voting power as that of the countries making 10% of the contributions. The group of the
member states who have been covering to thoughts with respect to the states belonging to the
general assembly has been favouring the increase in the budget. However, the main contention
behind the assigning of one vote to each of the member states is to ensure the voice of each of
the member states irrespective of their size and wealth to be reaching the United Nations18.
17 Moloney, Kim, and Rayna Stoycheva. "Partial Two‐Way Mirror: International Organization Budget
Transparency." Global Policy 9.1 (2018): 26-40.
18 Graham, Erin R. "Follow the Money: How Trends in Financing Are Changing Governance at International
Organizations." Global Policy 8 (2017): 15-25.

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8. Whether the United Nations should have the power to impose taxation
The imposition of taxation by the United Nations is mainly concerned with the
imposition of a global taxation system. Main concern of this taxation system would be each of
the countries as a whole and not the individuals belonging to the countries. However, the United
Nations may also impose global taxation upon the organisations operating on a worldwide basis.
However, the taxation policies implemented by the United Nations that has been witnessed in
history to have been disastrous. This is because the global taxation would imply a bigger
authority for imposing taxation having a wide range of jurisdiction. This would result in a lack of
coordination and control in the regime of taxation. The supporters with respect to global taxation
has been expecting to result in statism, redistributionism and class welfare. However the global
taxation would be beneficial for the conservation of certain level of income pertaining to the
member states to be conserved for the purpose of healthcare as well as housing19. However, it
can be stated that the global taxation would not be very much justified as the taxation system
requires constant alterations and amendments with respect to the changing situations within a
economy within which it has been imposed upon. There has been certain prospects with respect
to taxation that has been brought forward by some of the Nation States that requires the global
taxation to be rendered as a necessity. However, the imposition of the global taxation would be
impracticable and the same would not function as desired. Moreover, the coordination of such a
system of taxation operating globally would be burdensome. Moreover, the situation with respect
to each of the economies pertaining to the member states would not be the same. This would
require variations in the taxation system and rates of taxation while imposing them upon
19 Hanhimäki, Jussi M. The United Nations: a very short introduction. Oxford University Press, 2015.