Chapter VI. Selected legal opinions of the secretariats of the United Nations and related intergovernmental organizations

seLeCTed LegAL OPiNiONs OF The seCreTAriATs OF The UNiTed NATiONs ANd reLATed iNTergOverNmeNTAL OrgANizATiONs* 1

1. Legal opinions of the secretariat of the United Nations

   (Issued or prepared by the Office of Legal Affairs)

   1. Privileges and immunities

   (a) Note to the Secretary-General regarding the Staff Council resolution 42/24 proposing to hire Counsel and explore the possibility of bringing a legal action in the United States of America Federal Courts

   Exclusive responsibility of the Secretary-General to decide investments of United Nations Joint Staff Pension Fund (UNJSPF) assets—Exercise of fiduciary responsibility delegated to the Investment Management Service and to outside investment managers—Same status, privileges and immunities granted to UNJSPF, a subsidiary organ of the General Assembly, as to the United Nations—Immunity from legal process for the Secretary-General and other officials regarding the management of UNJSPF assets

   20 February 2007

   Background:

   The Under-Secretary-General for Management has asked me to brief you on the legal aspects of the above-referenced matter, which arises from Staff Council resolution 42/24, which I understand was adopted on 15 February 2007 Under that resolution, the Staff Council has decided, “to explore the possibility of taking immediate legal action in United States Federal Courts, or elsewhere, in order to prevent the Secretary-General, in his capacity as fiduciary of the Pension Fund investments, from undertaking the indexation of the Pension Fund investments and outsourcing the management of such investments at this time ” The resolution further authorizes the Staff Committee to hire external legal counsel to explore such legal options and measures, and has allocated $250,000 from the Staff Council’s reserve fund to that end

   1 * This chapter contains legal opinions and other similar memoranda and documents

   Responsibility for investment of the assets of the Pension Fund:

   Article 19 of the Regulations of the United Nations Joint Staff Pension Fund, adopted by the General Assembly, provides that the “investment of the assets of the Fund shall be decided upon by the Secretary-General after consultation with an Investments Committee and in light of observations and suggestions made from time to time by the Board [of the Fund] on the investments policy ” The General Assembly has confirmed that the Secretary-General acts alone as “a fiduciary for the interests of the participants and beneficiaries of the United Nations Joint Staff Pension Fund under the Regulations and Rules of the Fund” (General Assembly resolution 35/216 B, of 17 December 1980) However, in exercising such fiduciary responsibility, the Secretary-General must consult with the Investments Committee and receive observations and suggestions from the Board of the Fund on investment policy In addition, the General Assembly has “established” the following criteria for the investment of the assets of the Fund: (i) safety, (ii) profitability, (iii) liquidity,

   (iv) convertibility, and (v) conformity with the Regulations and Rules of the Pension Fund (General Assembly resolution 49/224, Part VIII, of 23 December 1994)

   Based on the foregoing, it is the Secretary-General’s sole responsibility to decide on the investment of the assets of the Fund, subject to his obligation, under article 19 of the Regulations of the Pension Fund, to consult with the Investments Committee, and to receive observations and suggestions from the Board of the Fund from time to time on such policy In exercising such responsibility, the Secretary-General should abide by the established criteria for investment of the assets of the Fund, and he should ensure, as a fiduciary, that his investment decisions are made for the interests of the participants and beneficiaries of the Pension Fund under the Regulations and Rules of the Fund

   The Secretary-General is not expected to act without support, and historically has delegated day-to-day responsibility for investment of the assets of the Fund to a Representative of the Secretary-General for Investment of the Assets of the Fund, who, in turn, is supported by the staff of the Investment Management Service While the Representative of the Secretary-General and the staff of the Investment Management Service make most decisions on the disposition of investments, for many years, they have also delegated to outside investment managers responsibility for certain portions of the portfolio of the investments of the Fund, based on consultations with the Investments Committee and the observations and suggestions of the Board In particular, such use of outside investment managers only has occurred thus far for the Fund’s small capitalized equities investments portfolio, where the transactions are so numerous and the overall investments are so modest that the resources of the Investment Management Service are inadequate to appropriately manage such portfolio of investments

   Immunity of the Secretary-General and the Pension Fund from suit in the United States courts:

   The Fund has been established as a subsidiary body of the General Assembly in accordance with Article 22 of the Charter of the United Nations and, therefore, is an integral part of the United Nations Moreover, pursuant to article 18 of the Regulations of the Fund, the assets of the Fund “shall be acquired, deposited and held in the name of the United Nations, separately from the assets of the United Nations, on behalf of the partici-

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   pants and beneficiaries of the Fund ” Accordingly, the Fund and its assets enjoy the same status, privileges and immunities as does the Organization

   In this regard, article II, section 2 of the 1946 Convention on the Privileges and Immunities of the United Nations,* 2 to which the United States of America is a party, provides that the “United Nations, its property and assets wherever located and by whomsoever held, shall enjoy immunity from every form of legal process ” Further, article V, section 18

   (a) of the Convention provides that “officials of the United Nations shall be immune from legal process in respect of words spoken or written and all acts performed by them in their official capacity ” Article V, section 19 of the Convention also provides that, in addition to such functional immunity under section 18, the Secretary-General and all officials at the level of Assistant Secretary-General and above “shall be accorded in respect of themselves, their spouses and minor children, the privileges and immunities, exemptions and facilities accorded to diplomatic envoys, in accordance with international law ” Overall, the courts of the United States have upheld the immunity of the Organization, including the Pension Fund, from legal process The courts have similarly upheld the immunity of the Organization’s officials and of the Secretary-General from legal process

   It should also be noted that, under article VIII, section 29 of the Convention, the Organization must provide “appropriate modes of settlement” in any case of “disputes involving any official of the United Nations who by reason of his official position enjoys immunity, if immunity has not been waived by the Secretary-General ” Any attempt by the Staff Council to institute a legal action against the Secretary-General or any other United Nations official involved with decisions on the investment of the assets of the Fund will result in the Organization’s assertion of the immunities from legal process, as described above In such case, the Staff Council may seek an “appropriate mode of settlement” of its dispute with the Secretary-General If the Staff Council is unable to resolve its concerns satisfactorily through their representatives to the Board of the Pension Fund, then any settlement of this dispute should be pursued through informal consultations between the Secretary-General and the Staff Council

   Conclusion:

   Based on the foregoing, the United States courts, or any other courts of the Member States, would not have jurisdiction to hear an action brought by the Staff Council against the Secretary-General, the Organization, the Pension Fund, or any officials thereof concerning the decisions taken by the Secretary-General, and his representatives, with respect to investment of the assets of the Pension Fund

   * 2 United Nations, Treaty Series, vol 1, p 15, and vol 90, p 327 (corrigendum to vol 1)

   (b) Interoffice memorandum to the Officer in Charge, Policy Support Unit, Human Resources Policy Service, Division for Organizational Development,

   Office of Human Resources Management (OHRM) regarding liability for income tax in the United States (US) for United Nations staff members with permanent residence in the US

   Potential tax liability of United Nations staff under US income tax law—Waiver of privileges and immunties upon acquiring permanent residence in the US—Current status of United Nations staff member without G-4 visa nor permanent residence

   12 March 2007

   1 I refer to your memorandum of 9 March 2007 concerning the potential tax liabilities of [Name], Assistant Secretary-General and New York Pandemic Influenza Coordinator, concerning her United Nations income for the years 2006 and 2007 You note in your memorandum that, following her departure from the employ of UNFPA on 31 October 2005, [Name] filed form 1–508 on the Waiver of Rights, Privileges, Exemptions and Immunities (the “Waiver”) with the United States authorities, as part of her application for permanent resident status in that country You also note that, subsequently, on 8 May 2006, [Name] was granted an appointment by the United Nations for an initial six months period which was then extended for another six months until 7 May 2007 You inform us that at the time of [Name]’s recruitment, OHRM did not request that she adjust to G-4 status, “as the process of her application for legal residence was already in an advanced stage” In this regard, while we are not aware of...