UN ends refund policy in bid to avert financial crisis

The United Nations has voted to end a long-standing practice of refunding unspent budget contributions to member states, adopting the measure as part of broader efforts to address the organization's worsening financial crisis.

The UN General Assembly approved the change on June 30 after Secretary-General António Guterres warned that the organization was in a "race to bankruptcy," as the Wall Street Journal reported.

Since its founding more than 70 years ago, the UN has returned unused funds to member states to avoid accumulating excess reserves. Over time, however, the policy came under criticism because rebates were also issued to countries that had paid their contributions late—or had not paid them at all.

Addressing the European Parliament in February, General Assembly President Annalena Baerbock described the system as a "Kafkaesque financial rule of reimbursing funds never received," arguing that it had contributed to the UN's "existential liquidity crisis."

Following this week's vote, Baerbock said the General Assembly had "avoided the imminent financial collapse of the UN."

Mounting unpaid contributions

The UN's financial difficulties have been exacerbated by overdue payments from several member states, including its largest financial contributors.

Although annual assessments are mandatory and calculated according to each country's gross domestic product, the organization ended 2025 with a record $1.6 billion in unpaid regular budget contributions, according to its latest financial report published in May. Total arrears—including peacekeeping operations and international tribunals—exceeded $6.5 billion.

The United States, which accounts for 22% of the UN's regular budget, remains the organization's largest contributor. According to US media reports, China was also behind on roughly $400 million in assessed payments.

US President Donald Trump has repeatedly criticized the United Nations and has withdrawn Washington from several UN bodies, including the Population Fund. His administration has also announced plans to reduce US contributions to peacekeeping operations and has previously pulled the country out of UNESCO, the World Health Organization, and the United Nations Human Rights Council.

Earlier this year, UN officials warned that the organization could run out of operating funds by July and might be forced to suspend activities at its New York headquarters unless member states fulfilled their financial obligations. In December, the General Assembly approved a $3.45 billion regular budget to support the organization's work on peace and security, sustainable development, and human rights.

By Nazrin Sadigova