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The Department reports an unfunded liability for the accumulated arrears assessed by the United Nations (UN), its affiliated agencies, and other international organizations in the amount of $60.0 million and $50.1 million for 2004 and 2003, respectively, for regular budget assessments and international peacekeeping. These financial commitments mature into obligations (as that term is used in domestic law) only when funds are authorized and appropriated by Congress. As of September 30, 2004, a total of $926 million had been appropriated by Congress for payment of the U.S. arrearage. These amounts, however, were made available subject to certifications by the Secretary of State that certain legislative requirements were met. A payment of $100 million was made in FY 2000; a payment of $475 million and a credit of $107 million were made in FY 2002; and payments totaling $242 million were made in FY 2003.

The financial statements also report an unfunded liability of $837.4 and $869.2 million at September 30, 2004 and 2003, respectively, for the current year 2004 and 2003 unfunded or restricted annual assessments from the United Nations, its affiliated agencies and several other international organizations, as well as for peacekeeping. It has been the Department's policy to pay annual assessments for the UN and certain international organizations out of the following fiscal year's appropriation, usually in the last quarter of the calendar year (i.e., the 2004 calendar year assessment is paid from the Department's 2005 appropriation). The Liability to International Organizations at September 30, 2004 and 2003, is summarized below (Dollars in Thousands).

Liability to International Organizations
At September 30, 2004 and 2003
(Dollars in Thousands)

	2004	2003
Accumulated Arrears	$ 60,029	$ 50,191
Unfunded Annual Assessments	837,352	869,237
Liability to International Organizations	$897,381	$919,428

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