Chapter VI. Selected legal opinions of the Secretariat of the United Nations and related inter-governmental organizations

Chapter VI

SELECTED LEGAL OPINIONS OF THE SECRETARIAT OF THE UNITED NATIONS AND RELATED INTER-GOVERNMENTAL ORGANIZATIONS

1. Legal opinions of the Office of Legal Affairs of the United Nations

   1. RESUMED PARTICIPATION OF INDONESIA IN THE ACTIVITIES OF THE UNITED NATIONS

      Aide-memoire to the Secretary-General

      Introduction

   1. By telegram of 19 September 1966, the Ambassador of Indonesia to the United States of America transmitted the following message to the Secretary-General:

      "With reference to the letter of 20 January 1965 from the First Deputy Prime Minister and Minister for Foreign Affairs of Indonesia and to your letter of 26 February 1965 in answer thereto, I hereby have the honour upon instruction of my Government to inform you that my Government has decided to resume full co-operation with the United Nations and to resume participation in its activities starting with the twenty-first session of the General Assembly. A delegation headed by the Foreign Minister will arrive to attend the Assembly."

      Upon receipt of this telegram, the Secretary-General circulated it to the Security Council (S/7498) and to the General Assembly (A/6419).

   2. The previous history of this matter, and some of the practical issues arising from the foregoing telegram are briefly set out in the present aide-memoire.

      Previous history of the matter

   3. By letter of 20 January 1965, the First Deputy Prime Minister and Minister for Foreign Affairs of Indonesia confirmed information orally given the Secretary-General on 31 December 1964 that "Indonesia has decided at this stage and under present circumstances to withdraw from the United Nations." The principal reason advanced for this decision related to the seating of Malaysia as a member of the Security Council for the year 1966. The letter also stated, in answer to an earlier appeal by the Secretary-General not to adopt this course of action, that "Indonesia still upholds the lofty principles of international co-operation as enshrined in the United Nations Charter." Finally, it was requested that the Secretary-General make arrangements for the Indonesian Mission in New York to "maintain its official status" until 1 March 1965.

   4. Upon receipt of the foregoing letter, the Secretary-General circulated it to the Security Council (S/6157) and to the General Assembly (A/5857), these being the two bodies concerned with membership questions, and transmitted it directly to all Governments of Member States, as the Governments of the States Parties to the Charter. He also held private consultations with Members of the Organization (i.e. members of the Security Council and heads of regional groups). Neither the Security Council, nor the General Assembly, took any formal action on the Indonesian letter.

   5. In the course of the Secretary-General's consultations just mentioned, he distributed an informal aide-memoire, dated 29 January 1965, concerning the letter he had received from Indonesia. That aide-memoire noted, inter alia, that the letter "gives rise to a situation for which there is no precedent in the history of the Organization and for which no express provision is made in the Charter." It concluded with certain comments on "some practical effects of the letter of 20 January 1965". It was suggested that, after consultations with Member States, the Secretary-General would give instructions "for the necessary administrative actions (such as the removal of the Indonesian flag, name-plate, etc.) to be taken at the relevant time".

   6. After the consultations with Member States mentioned in paragraph 4 above, the Secretary-General, on 26 February 1965, replied to the letter of 20 January 1965 from the Indonesian Foreign Minister. This reply (S/6202-A/5899) recorded the steps taken by the Secretary-General in paragraph 4 above, and continued:

      "'Your statement that 'Indonesia has decided at this stage and under present circumstances to withdraw from the United Nations' and your assurance that 'Indonesia still upholds the lofty principles of international co-operation as enshrined in the United Nations Charter' have been noted.

      "As you requested, arrangements have been made for the Indonesian Mission in New York to 'maintain its official status' until 1 March 1965.

      "In conclusion, I wish to express the profound regret which is widely felt in the United Nations that Indonesia has found it necessary to adopt the course of action outlined in your letter and the earnest hope that in due time it will resume full co-operation with the United Nations."

   7. On 1 March 1965, pursuant to the Secretary-General's instructions, the necessary "administrative actions" were taken by the Secretariat to remove the Indonesian name-plate, flag, etc. Thereafter, Indonesia ceased to be listed as a Member of the Organization, or of United Nations principal and subsidiary organs of which it had been a member solely by virtue of its membership in the United Nations itself. Furthermore, the name of Indonesia does not appear in resolution 2118 (XX) of 21 December 1965, whereby the Assembly fixed the scale of assessments of Member States for the financial years 1965, 1966 and 1967 (nor is it assessed in the same resolution as a non-member for the expenses of certain organs in which non-members participate).

      Some practical effects of the telegram of 19 September 1966

   8. From the telegram set out in paragraph 1 of this aide-memoire, which refers to the decision of the Government of Indonesia "to resume full co-operation with the United Nations", it would appear that that Government considers that its recent absence from the Organization was based not upon a withdrawal from the United Nations but upon a cessation of co-operation. The action taken by the United Nations in the past on this matter would not appear to preclude this view. After it has been ascertained whether this is the general view of the membership, the Secretary-General would give instructions for the necessary administrative actions to be taken for Indonesia to participate once again in the proceedings of the Organization. It may be assumed that, from the time that Indonesia resumes participation, it will meet in full its budgetary obligations. For the period of non-participation, if it is the general view that the bond of membership continued, it would be the intention of the Secretary-General to negotiate a requisite payment with the representatives of Indonesia.

      22 September 1966

   2. EXEMPTION OF THE UNITED NATIONS FROM CENTRAL EXCISE DUTY ON GASOLINE PURCHASED FOR OFFICIAL VEHICLES OF THE UNITED NATIONS DEVELOPMENT PROGRAMME—SECTIONS 7 (A) AND 8 OF THE CONVENTION ON THE PRIVILEGES AND IMMUNITIES OF THE UNITED NATIONS X

      Memorandum to the Acting Director of the Bureau of Administrative Management and Budget, United Nations Development Programme

   1. You have referred to us the question whether the Resident Representative of the United Nations Development Programme in a Member State may claim a refund of "central excise duty" paid by his office on the purchases of gasoline for official vehicles. We note that the Ministry of External Affairs of the Government concerned has declined to recognize the exemption of the United Nations from the said excise duty and has referred to section 8 of the Convention on the Privileges and Immunities of the United Nations as the basis for its position.

   2. From the correspondence attached to your memorandum it is not clear to us whether the "central excise duty" paid by the Office of the Resident Representative on the purchase of gasoline for its official vehicles formed part of the price of the gasoline or whether the said duty figured as a separate item on the invoice. Only if the duty in fact formed part of the price of the gasoline could section 8 of the Convention be applicable. The said section reads as follows:

      "Section S. While the United Nations will not, as a general rule, claim exemption from excise duties and from taxes on the sale of movable and immovable property which form part of the price to be paid, nevertheless, when the United Nations is making important purchases for official use of property on which such duties and taxes have been charged or are chargeable, Members will, whenever possible, make appropriate administrative arrangements for the remission or return of the amount of duty or tax."

   3. Should it be the case that the central excise duty in question in fact formed part of the price paid, the Resident Representative may, on the basis of the latter part of the above-quoted section 8 of the Convention, request the Government to "make appropriate administrative arrangements for the remission or return of the amount of duty". He may do so in view of the fact that purchase by his office of gasoline for official use was on a recurring basis and amounted to a sizeable sum per month on the average. Both the recurring nature of the purchases and the amount of the duty involved render the purchases of gasoline "important" in the sense of the section 8 of the Convention. We have consistently taken this position vis-a-vis various Governments in similar cases and these Governments, for instance Canada and the United Kingdom, have taken appropriate measures for the exemption or refund of similar taxes.

   4. Should it be found that the "central excise duty" paid by the Office of the Resident Representative in fact figured as separate items on the invoices, it would be a "direct tax" on the UNDP within the meaning of section 7 (a) of the Convention. Under the said section 7, "the United Nations .. . shall be: (a) exempt from all direct taxes...".

   5. In view of the foregoing, we are of the opinion that the Resident Representative may further pursue the matter with the Government with a view to securing a refund of the amounts of "central excise duty" paid by his office on the purchases of gasoline for vehicles of his office. He may further request an exemption, or appropriate arrangements for the remission or return, of the...