US initiates $725 million transfer to UN as pressure mounts over large arrears

The United States administration has initiated the process to transfer $725 million to the United Nations through a congressional notification letter sent by the State Department. 

The planned payment is aimed at addressing a portion of the billions in unpaid dues owed to the global organization.

The $725 million covers less than 20 percent of the total debt reported by the U.N., which has stated it is owed more than $4 billion by Washington across regular and peacekeeping budgets.

U.N. Secretary-General Antonio Guterres said this year that the U.N. faced "imminent financial collapse" due to unpaid contributions from member states, and the global body has brought in large budget cuts.

Financial and aid experts note that while the transfer will not clear the entire deficit, it provides critical short-term relief to help the organization maintain operations, pay staff salaries, and avoid losing voting rights under Article 19 of the U.N. Charter.

As reported by Reuters, notification comes as the 80-year-old institution faces severe financial pressures, budget cuts, and cost-saving measures, with the transfer expected to go through ahead of upcoming diplomatic sessions in New York.

Eugene Chen, a former U.N. official, told Reuters such a transfer would help pay U.N. salaries for a period, but might not cover them all. "It keeps the ship afloat a little longer," he said.

"If the U.S. does not make further payments, it will likely lose its voting rights in January," he added.

Under article 19 of the U.N. Charter, a member state loses its voting rights in the General Assembly if its arrears exceed two years in annual fees, although grace periods are possible.

A major transfer now could avert the need for immediate spending cuts, Ronny Patz, an expert in U.N. finance with German think tank IDOS, said.

"If they pay a big chunk, the U.N. still runs on zero reserves but it gets through the year,” Patz added. “If they don’t pay, the U.N. might really be in trouble for the last two or three months of the year in terms of paying salaries and keeping the doors open.”