United Nations cash row that threatens to isolate America

US refusal to pay its dues causing a diplomatic furore, writes David Usborne in New York

A bloody diplomatic ruckus is set to break out today with the expected publication in Washington of plans for the repayment by the United States of only a portion of the roughly $1.3bn (pounds 760m) that it owes the United Nations.

The package, negotiated over several months behind closed doors on Capitol Hill, will be ballyhooed by President Bill Clinton's administration as a breakthrough in the long-running impasse over US contributions.

To the rest of the UN membership, it is likely to come over as a slap in the face. If it is enacted as drafted, the plan would entail a sharp increase in the dues that Britain and the rest of the European Union members would pay to keep the UN functioning.

Not only does the package propose paying only $813m in back due, a third of the total that the UN believes it is owed, but it is also laden with conditions that are highly controversial. The delinquent contributions would, for instance, only be paid over a period of three years.

"This is less even than what the administration had been talking to us about," remarked one angry European diplomat yesterday.

Anger is reaching a pitch with the US, if only because by withholding its UN dues, it is blatantly violating its obligations under international treaty to pay up the full amount of its contributions on time.

"It is seen here as an issue of law and international obligation, but it is not seen like that in Washington," another diplomat said.

"What is happening is clearly weakening the position of the US, as well as the position of all of us who are trying to stand up for international law on other matters".

Due to be made public at a meeting of the Senate Foreign Relations Committee this morning, the package was hammered out in negotiations between the chairman of the Senate Foreign Relations Committee, Senator Helms and Senator Joseph Biden, the ranking Democrat on the committee. Mr Biden was essentially speaking for the Clinton administration.

Most vexing will be demands for strict ceilings on the levels of American contributions in future years. The US share of the regular UN budget would be cut in the second year of the repayment programme from 25 per cent now to 22 per cent. From the third year it would be capped at 20 per cent. Washington's share of peace-keeping costs would also fall from 31 per cent to 25 per cent.

Barring a miraculous agreement to squeeze higher levels of contribution from fast-growing Asian countries, the budgetary fall-out for Europe could be considerable. The EU countries would probably see their share of the regular budget rise from 32 per cent now to almost 40 per cent, which is twice what the US is now proposing to pay.

Diplomats are, meanwhile, predicting serious pain for the US inside the organisation. The standing of the US has already been weakened by the dispute. So impaired is American diplomacy here that the new US envoy Bill Richardson has been asking Britain's Sir John Weston to make the running on Security Council issues that are important to Washington.

And a more urgent crisis is looming for the US. Unless a very large payment is forthcoming soon, it will fall foul early next year of Article 19 of the Charter. This stipulates that any country more than two years behind in its contributions must be stripped of its right to vote in the General Assembly.

If the new US ceilings are imposed, the position of Washington in the UN would inevitably be corroded in other, more subtle, ways.

"People will begin to question the various perks the US enjoys at the UN in terms of the prominence of their people here," one diplomat warned.

The same person, who asked to remain anonymous, also suggested that the Security Council would begin turning down any requests for peace-keeping operations that are clearly for the benefit of Washington.

"If they asked for an operation like the current mission in Haiti, for instance, I am afraid Congress would have to pay for it out of its own pockets".

The proposed package would be conditional on the US President pledging to certify annually that the UN is attaining certain goals on internal reform. These would include additional cuts in UN personnel as well as strict diets for its array of international programmes.

The document requires the President to certify that the organisation is not attempting any of the following: to create its own standing army, to impose global taxes to raise funds or in any way undermine the US Constitution.

Additionally, the UN would have to agree to surrender its accounts every year to scrutiny by Congress's own financial auditing body, the General Accounting Office.