WORLD TRADE
ORGANIZATIONWT/BFA/W/103
11 July 2003
(03-3744)
Committee on Budget, Finance and Administration
DRAFT REVISION OF FINANCIAL REGULATIONS
OF THE
WORLD TRADE ORGANIZATIONWT/BFA/W/103
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CONTENTS
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CHAPTER I.    AUTHORITY AND APPLICABILITY ...................................................................3
CHAPTER II.    PREPARATION OF THE BUDGET ESTIMATES ..............................................3
CHAPTER III.    ADOPTION OF THE BUDGET ............................................................................4
CHAPTER IV.    COLLECTION OF FUNDS ....................................................................................4
(a)Contributions From Members ............................................................................................4
(b)Other income ................................................................................................................ ........6
(c)Voluntary Contributions, Gifts or Donations ....................................................................6
CHAPTER V.   USE OF THE FUNDS ................................................................................................7
CHAPTER VI.    THE SURPLUS ACCOUNT ...................................................................................8
CHAPTER VII.    THE WORKING CAPITAL FUND .....................................................................8
CHAPTER VIII.    CUSTODY AND INVESTMENT OF FUNDS ...................................................9
CHAPTER IX.   THE ACCOUNTS ...................................................................................................10
CHAPTER X.    INTERNAL CONTROL .........................................................................................11
CHAPTER XI.    EXTERNAL AUDIT ..............................................................................................11
APPENDIX TO THE FINANCIAL REGULATIONS .....................................................................13WT/BFA/W/103
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CHAPTER I.    AUTHORITY AND APPLICABILITY
Regulation 1
These Regulations shall govern the financial administration of the World Trade Organization
(WTO).
Regulation 2
The Director-General shall be responsible for the implementation of these Regulations.  He may
delegate to other officers of the WTO such aut hority as he considers necessary for the effective
implementation of these Regulations.
Regulation 3
Rules made by the Director-General in order to  carry out the provisions of these Regulations
shall be communicated to the General Council for approval.
Regulation 4
These Regulations shall not be amended except by the General Council acting upon the advice
of the Committee on Budget, Finance and Administration.
CHAPTER II.    PREPARATION OF THE BUDGET ESTIMATES
Regulation 5
The financial period of the WTO shall be one  [two consecutive] calendar year [s].
Regulation 6
1. 1. For every financial period, the Director-Gen eral shall prepare budget proposals containing
estimates of the income and expenditure of the WTO. [Revisions for the second year of the financial
period, as may be necessary, will be presented to the Committee on Budget, Finance and
Administration, which will examine them and formulate a recommendation for consideration by
the General Council.
2. The estimates shall be expressed in Swiss francs.
Regulation 7
1. The proposed expenditure estimates shall be divided into parts and  sections.
2. The proposed expenditure estimates shall be accompanied by such information annexes and
explanatory statements as may be requested by or on behalf of the General Council, and such further
annexes or statements as the Director-G eneral may deem necessary and useful.WT/BFA/W/103
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Regulation 8
1. Supplementary budget proposals for the current financial period may be submitted by the
Director-General whenever necessary.
2. The Director-General shall prepare supplement ary budget proposals in a form consistent with
the approved budget.  These proposals shall follow th e same examination and approval process as for
the annual budget proposals.
Regulation 9
The income estimates shall consist of:
(a) a schedule of miscellaneous income showin g for each item, in addition to the estimated
amounts, the approved amount  for the preceding financial period;
(b) a draft scale of contributions to be assessed on Members, showing for each Member, the
proposed assessment and the contribution assessed for the preceding financial period.
CHAPTER III.    ADOPTION OF THE BUDGET
Regulation 10
The Director-General shall submit the budget estimates to the Committee on Budget, Finance
and Administration in time for it to be cons idered at its session in the Autumn preceding  each financial
period.  At the same time, these budget estimates shall be transmitted to all Members of the WTO.
Regulation 11
The Committee on Budget, Finance and Administra tion shall examine the budget estimates and
prepare a report thereon which shall be submitted to the General Council for adoption.
CHAPTER IV.    COLLECTION OF FUNDS
(a)  Contributions from Members
Regulation 12
1. The expenses of the WTO shall be financed by contributions from Members and miscellaneous
income.  The contributions shall be according to the scale of assessments determined by the General
Council.
2. The share to be contributed by each Member to the annual operating budget of the WTO shall
be established on the basis of that country's (or sepa rate customs territory's) international trade (imports
plus exports) in relation to the total international trade of all WTO Members.
3. (a) Calculations of assessed contribut ions for the years 2001, 2002 and 2003 (which
are prepared in the course of the respective previous year) sh all be based on international
trade statistics for the years 1996-1998, 1997- 1999 and 1998-2000, respectively; or, if these
statistics are not available, for the last three years for which statistics are available.WT/BFA/W/103
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(b) Calculations of assessed contributions for at least the following ten years, i.e. 2004,
2005, 2006 to 2013, (which are prepared in the cour se of the respective previous year) shall
be based on international trade st atistics: for the years 1997-2001, 1998-2002, 1999-2003,
etc. respectively; or if these statistics are not available, for the last five years for which
statistics are available.
4. The statistics used shall relate to trade in goods,1 services and intellectual property rights as
reported in Balance of Payments statistics from the International Monetary F und (IMF); with regard to
services, the statistics shall relate to the definiti on of commercial services as applied in the WTO.
5. Where IMF data deviate from IMF guidelines and include transactions not related to goods,
services or intellectual property rights, adjustments provided to the WTO by the Central Bank or the
National Statistical Office of a Member shall be take n into account by the Secretariat when adequately
documented and justified.
6. If IMF data are not available, the WTO Secretariat shall use estimates based on the best other
available sources.
7. A minimum contribution of 0.015  percent will be applied to those members whose share in the
total international trade of all WTO Members is less than 0.015  per cent.
8. The contributions shall be assessed and paid in Swiss francs.
Regulation 13
1. After the General Council has adopted the budget, the Direct or-General shall:
(a) transmit the relevant documents to the Members;
(b) inform the Members of their commitments  in respect of annual  contributions, and send
a corresponding invoice
2. (c) request the Members to remit their contributions.
3. 2. In accordance with Article VII, 4 of the Marrakesh Agreement Establishing The World Trade
Organisation, Members have the obligation to contribute promptly to the WTO their share in the
expenses of the WTO. Contributions shall be considered as due and payable in full upon receipt of the
invoice or on 1 January of the financial period to which they relate, whichever is later.  As of 1
January of the following calendar year the unpaid balance of such contributions shall be considered tobe one year in arrears.
Regulation 14
The Director-General shall take appropriate action with a view to ensuring that Members pay
their annual
 contributions promptly.  He shall report re gularly to the Committee on Budget, Finance and
Administration on the state of  payment of contributions.
                                                     
     1Excluding gold held as a store of value (deposit money banks).WT/BFA/W/103
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Regulation 15
States or separate customs territories having  the status of Observers may only accede to the
WTO if their financial obligations as Observers have been fully discharged.  New Members shall be
required to make a pro rata  contribution for the year in which they become Members, after any relevant
deduction of their assessment as Observer which shall also be calculated on a pro rata basis for that
year.  New Members shall also be required to prov ide their proportion of the total advances to the
Working Capital Fund; this advance shall be carried to the credit of the relevant Member.  Payments
made by a Member shall be credited first to the Wo rking Capital Fund and then to the contributions due.
Regulation 16
Any payment in respect of contributions made by a Member which has not paid in full its
contribution for previous calendar years shall, unle ss the General Council decides otherwise, be credited
against the earliest date of such arrears.
Regulation 17
A Provision for contributions in arrears shall be  maintained.  It shall be funded through the
Surplus Account.
(b) Other income
Regulation 18
1. Except in so far as the General Council may d ecide otherwise, all income other than (a)
contributions payable by Members, (b) interest ea rned by investing contributions received by the
Secretariat and not required immediately, (c) income  derived from investments of the Working Capital
Fund, (d) direct refunds of prior year's expenditure received during the current financial period,  and (e)
assessments of Observers,  shall be classed as miscellaneous income.
2. For each full payment of an annual contribution between 1988 and 1994, any Member with pre-
1988 arrears and assessed at the minimum cont ribution in 1988 may cancel an equal number of
assessments for 1987 and earlier years upon pa yment of the 1989 minimum contribution of
Sw F 19,137.  The difference between an outstandi ng contribution for pre-1988 and the amount of
Sw F 19,137 shall be funded by miscellaneous income.
(c) Voluntary contributions, gifts or donations
Regulation 19
1.  Voluntary contributions, gift s or donations may be accepted by the Director-General provided
that the purposes for which the contributions are made are consistent with the policies, aims and
activities of the WTO, and provided that the accep tance of such contributions which directly or
indirectly involve additional financial liability fo r the WTO shall require the consent of the Committee
on Budget, Finance and Administration.
2. Moneys accepted for purposes specified by the donor shall be treated as trust funds or special
accounts.
3. Moneys accepted in respect of which no purpose is specified shall be treated as miscellaneous
income and reported as "gifts" in the accounts of the financial period.WT/BFA/W/103
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4. Money received by a staff Member as honoria in his/her official capacity shall be remitted to the
Organization and be credited to  the WTO Staff Assistance Fund.
5. Unless otherwise provided, such voluntar y contributions, gifts or donations shall be
administered in accordance with the present Financial Regulations.
CHAPTER V.   USE OF THE FUNDS
Regulation 20
The adoption of a budget by the General Council shall constitute an authorization to the
Director-General to incur obligations and make pa yments for the purposes for which the appropriations
were voted and up to the amounts so voted.
Regulation 21
Appropriations shall be available for obligation dur ing the financial period to which they relate.
Regulation 22
Appropriations shall remain available for twelve  months following the end of the financial
period to which they relate to the extent that they  are required to discharge obligations in respect of
goods supplied and services rendered in the financial period and to liquidate any other outstanding legalobligation of the financial period.  The balance of the appropriations shall be surrendered by transfer to
the Surplus Account.
Regulation 23
At the end of the twelve-month period provided  in Regulation 22 above, the then remaining
balance of any appropriations retained shall be tr ansferred to miscellaneous income. Any unliquidated
obligations of the financial period in question shall,  at that time, be cancelled or, where the obligation
remains a valid charge, transferred as an obligation against current appropriations.
Regulation 24
At the end of the financial period the Director-General shall report on the transfers of credits
between sections of the expenditure budget to the Ge neral Council for approval.  For items so identified
by the Committee on Budget, Finan ce and Administration at the time of budget finalization, transfer
shall not be permitted.
Regulation 25
The Director-General may enter into commitment s for future financial periods, provided that
such commitments:
(a) are for activities which have been approved by the General Council and are expected to
continue beyond the end of the current financial period; or
(b) are authorized by specific decisions of the General Council.WT/BFA/W/103
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CHAPTER VI.    THE SURPLUS ACCOUNT
Regulation 26
1. Budgetary surpluses shall be transferred to  the Surplus Account pending decision by the
General Council on their use.
2. Increases and decreases of the provision for cont ributions in arrears shall be effected by means
of the Surplus Account.
3. If at the end of a financial year  [period]  the Surplus Account shows a credit balance , the
Director-General shall make proposals to the Co mmittee on Budget, Finance and Administration with
regard to its use which may be:
(i) application as income against the budget for the second year following that in which the
surplus occurs, thereby reducing Member's contributions;
(ii) transfer to the Working Capital Fund; or
(iii) use for any other purpose decided upon by the General Council.
4. A  deficit in the Surplus Account at the end of a fina ncial period shall be covered, to the extent
possible, by transfer from the Working Capital Fund.  Any part of the deficit left uncovered after
transfer from the Working Capital F und shall be included as an appropriate credit in the budget for the
next earliest possible financial period.
CHAPTER VII.    THE WORKING CAPITAL FUND
Regulation 27
The Working Capital Fund shall be constituted by:(a) assessed advances made by Members.  Such sums shall be carried to the credit of the
Members which have paid them;
(b) any sums which the General Council may cause  to be paid into it from time to time.
Such sums shall be carried to the credit of the organization.
Regulation 28
Any government acceding to the WTO shall make  an advance to the Fund in accordance with
the scale of contributions applicable to the budget for the year of its accession.  The minimum advance
to the Working Capital Fund amounts to 0.5 per cent of the principal of the Fund for countries or
separate customs territories whose share of the total trade of Members is 0.5 per cent or less.
Regulation 29
The Director-General is authorized to  advance from the Working Capital Fund:
(a) such sums as may be necessary to fina nce budgetary appropriati ons pending receipt of
contributions;WT/BFA/W/103
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(b) in exceptional circumstances and subject to prior authorization of the General  Council,
such sums as may be necessary to fina nce commitments relating to extraordinary
expenditure.
Regulation 30
Sums advanced under Regulation 29(a) above shall be reimbursed to the Working Capital Fund
as soon as receipts from contributions are available for the purpose.  Sums advanced under
Regulation 29(b) shall be reimbursed to the Working Capital Fund by including an appropriate credit in
the budget for the next earliest possible financial period.
Regulation 31
The General Council may liberate all or part of the sums constituting the Working Capital Fund,
and the sums so liberated in so far as they  are derived from monies placed in the Fund under
Regulation 27(a) shall be returned in Swiss francs to  the Members which have contributed to the Fund in
proportion to their respective shares in the Fund.
Regulation 32
Subject to a decision of the General Council, count ries or separate customs territories which for
any reason cease to be Members of the WTO shall be entitled to the reimbursement of the total Swiss
franc amount of their shares in the Working Capital Fund under Regulation 27(a).
Regulation 33
Interest accrued on the Working Capital Fund sha ll be added to the Working Capital Fund and
carried to the credit of the Organization under Regulation 27(b) above.
CHAPTER VIII.    CUSTODY AND INVESTMENT OF FUNDS
Regulation 34
1. The Director-General shall designate the bank or banks in which the funds of the WTO shall be
kept.
2. The Director-General may make non-speculative short-term investments of monies not needed
for immediate requirements.  The investments of m onies standing to the credit of any trust funds,
reserve or special account shall be subject to any directives of the appropriate authority.
3. The Director-General shall include in the fina ncial statements submitted to the General Council
a statement of the investments currently held.
4. Income from investments shall be credited as pr ovided in the rules or agreement relating to each
fund or account.WT/BFA/W/103
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CHAPTER IX.   THE ACCOUNTS
Regulation 35
1. The Director-General shall maintain such ac counts as are necessary and shall prepare final
accounts for financial period on an accrual basis showing:
(a) the income and expenditure of all funds;(b) the status of all appropriations, including:
(i) the original budget appropriations;
(ii) any supplementary appropriations ;(iii) the appropriations as modified by any transfers;
(iv) credits, if any, other than the appropriations voted by the General Council;
(v) the amounts charged against the appropriations;  and
(vi) the amounts charged against any other credit.
(c) statements of assets and liabilities at the close of the financial period.
He shall also give such other information as may be  appropriate to indicate the current financial position
of the WTO.
Regulation 36
Appropriate separate accounts shall be maintained  in respect of all trust funds, reserves and
special accounts.
Regulation 37
The final accounts of the WTO shall be presented in Swiss francs.  The accounting records may,
however, be kept in such currency or currencies as the Director-General  may deem necessary.
Regulation 38
The final accounts shall be submitted to the external auditor as soon as practicable following the
end of the financial period to which they relate.
Regulation 39
The Director-General shall submit the final accounts and a financial report for each financial
period and the external auditor's report thereon to the General Council as soon as practicable following
the close of that period.
Regulation 40
The final audited accounts shall be submitted to the General Council for approval.WT/BFA/W/103
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CHAPTER X.    INTERNAL CONTROL
Regulation 41
The Director-General shall:
(a) establish detailed financial rules and proced ures in order to ensure effective financial
administration and the exercise of economy;
(b) cause all payments to be made on the basis of appropriate supporting documents and
other documents which ensure that the services or goods have been received and that
payments have not previously been made;
(c) designate the officers who may receive monies, incur obligations and make payments
on behalf of the WTO;
(d) maintain an internal financial control which shall provide for an effective current
examination and/or review of financia l transactions in order to ensure:
(i) the regularity of the receipt, custody  and disposal of all funds and other
financial resources of the WTO;
(ii) the conformity of obligations and expe nditures with the appropriations or other
financial provisions voted by the Gene ral Council, or with the purposes and
rules relating to trust funds and special accounts;
(iii) the economic use of the resources of the WTO.
Regulation 42
Commitments or obligations shall not be incurred and payments shall not be made unless an
appropriate authorization has been made unde r the authority of the Director-General.
Regulation 43
The Director-General may, on an exceptional basis, make such  ex gratia  payments as he deems
to be necessary in the interests of the WTO.  A st atement of such payments shall be submitted with the
final accounts.
Regulation 44
The Director-General may, after full investiga tion, authorize the writing-off of losses of cash,
supplies, equipment and other assets, other than arrear s of contributions.  A statement of all such losses
written off during the financial period shall be submitte d to the external auditor with the final accounts.
Regulation 45
The Director-General shall establish rules for th e procurement of equipment, supplies and other
requirements, including rules governing the invitation of tenders.
CHAPTER XI.    EXTERNAL AUDIT
Regulation 46WT/BFA/W/103
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1. The General Council shall appoint  an external auditor to perform the audit of the accounts of the
WTO.
2. The external auditor shall be the Auditor-General (or officer ho lding the equivalent title) of a
Member of the WTO or another person of high competence.
3. The external auditor shall not be removed during his tenure of office except by the General
Council.
Regulation 47
1. The audit shall be conducted in conformity with generally accepted common auditing standards
and, subject to any special directives of the Gene ral Council, in accordance with the additional terms of
reference set out in the Appendix to these Regulations.
2. The external auditor may make observations with  respect to the efficiency of the financial
procedures, the accounting system, the internal financia l controls and, in general, the administration and
management of the WTO.
3. The external auditor shall be completely inde pendent and solely responsible for the conduct of
the audit.
4. The General Council may request the external a uditor to perform certain specific examinations
and issue separate reports on the results.
Regulation 48
1. The Director-General shall provide the external auditor with the facilities he may require in the
performance of the audit.
2. For the purpose of making a local or special examination or of effecting economies of audit
cost, the external auditor may in consultation with the Director-General engage the services of any
national Auditor-General (or officer holding the e quivalent title) or commercial public auditors of
known repute or any other person or firm who, in th e opinion of the external auditor, is technically
qualified.
Regulation 49
1. The external auditor shall issue a report on the audit of the financial statements and relevant
schedules reflecting the position of the final accounts for the financial period which shall include suchinformation as he deems necessary in regard to ma tters referred to in Regulation 47, paragraph 2, and in
the additional terms of reference.
2. The external auditor's report shall be submitte d to the General Council, through the Committee
on Budget, Finance and Administration, together with  the audited financial statements. The Committee
on Budget, Finance and Administration shall examine the financial statements and the auditor's report
and shall forward them to the General Council with such comments as it deems appropriate.WT/BFA/W/103
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APPENDIX TO THE FINANCIAL REGULATIONS
Additional terms of reference governing external audit
1. The external auditor shall perfo rm such audit of the accounts of the WTO, including all trust
funds and special accounts, as he deems necessary in order to satisfy himself that:
(a) the financial statements are in acco rd with the books and records of the WTO;
(b) the financial transactions reflected in th e statements have been in accordance with the
rules and regulations, the budgetary provis ions and other applicable directives;
(c) the securities and moneys on deposit and on hand have been verified by certificate
received direct from the WTO's depositories or by actual count;
(d) the internal controls are adequate;(e) procedures satisfactory to the external audito r have been applied to the recording of all
assets, liabilities, surpluses and deficits.
2. The external auditor shall be the sole judge as to acceptance in whole or in part of certifications
and representations by the Director-General and may proceed to such detailed examination and
verification as he chooses of all financial records,  including those relating to supplies and equipment.
3. The external auditor and his staff shall have free access at all convenient times to all books,
records and other documentation which are, in the opi nion of the external auditor, necessary for the
performance of the audit.  Information classified as confidential shall be made available on application.
The external auditor and his staff shall respect the confidential nature of any information so classified
which has been made available and shall not make use of it except in direct connection with the
performance of the audit.
4. The external auditor shall have no power to disa llow items in the accounts but shall draw to the
attention of the Director-General for appropriate act ion any transaction concerning which he entertains
doubts as to legality or propriety.  Audit objections, to these or any other transactions, arising during the
examination of the accounts shall be immediat ely communicated to th e Director-General.
5. The external auditor shall express and sign an opinion in the following terms:  "I have examined
the financial statements numbered ... to ... and releva nt schedules of the WTO for the financial period
ended 31 December ....  My examination included a general review of the accounting procedures and
such tests of the accounting records and other suppor ting evidence as I considered necessary in the
circumstances."  The external auditor's opi nion shall state, as appropriate, whether:
(a) the financial statements present fairly the financial position as at the end of the period
and the results of the operations for the period;
(b) the financial statements were prepar ed in accordance with the stated accounting
principles;
(c) the accounting principles were applied on a basis consistent with that of the preceding
financial period;
(d) transactions were in accordance with the Financial Regulations and legislative
authority.WT/BFA/W/103
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6. The report of the external auditor to the General Council on the financial operations of the
period should mention:
(a) the type and scope of his examination;
(b) matters affecting the completeness or accuracy of the accounts, including where
appropriate:(i) information necessary to the correct interpretation of the accounts;
(ii) any amounts which ought to have been received but which have not been
brought to account;
(iii) any amounts for which a legal or contingent obligation exists and which have
not been recorded or reflected in the financial statements;
(iv) expenditures not properly substantiated;
(v) whether proper books of accounts have been kept;(vi) any deviations of a material nature in the presentation of financial statements
from generally accepted accounting principles applied on a consistent basis;
(c) other matters should be brought to the notice of the General Council, such as:
(i) cases of fraud or presumptive fraud;(ii) wasteful or improper expenditure of the WTO's money or other assets
(notwithstanding the accounting for the transaction may be correct);
(iii) expenditure likely to commit the WTO to further outlay on a large scale;
(iv) any defect in the general system or detailed regulations governing the control
of receipts and disbursements or of supplies and equipment;
(v) expenditure not in accordance with the intention of the General Council after
making allowance for duly authoriz ed transfers within the budget;
(vi) expenditure in excess of appropriations as amended by duly authorized
transfers within the budget;
(vii) expenditure not in conformity with the authority which governs it;
(d) the accuracy or otherwise of the supplies and equipment records as determined by
stocktaking and examination of the records;
(e) where appropriate, transactions accounted fo r in a previous financial period concerning
which further information has been obtained or transactions in a later financial period
concerning which it seems desirable that  the General Council should have early
knowledge.
7. The external auditor may make such observations  with respect to his fi ndings resulting from the
audit and such comments on the Director-General's financial report as he deems appropriate to the
General Council and to the Director-General.
8. Whenever the external auditor's scope of audit is restricted, or he is unable to obtain sufficient
evidence, he shall refer to the matter in his opinion a nd report, making clear in his report the reasons for
his comments and the effect on the financial positi on and the financial transactions as recorded.
9. In no case shall the external auditor include cr iticism in his report without first affording the
Director-General an adequa te opportunity of explanation on the matter under observation.
10. The external auditor is not required to menti on any matter referred to in the foregoing which, in
his opinion, is not material.
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