  
  
 WORLD TRADE  
ORGANIZATION  RESTRICTED 
WT/BFA/72 
11 May 2004 
 (04-2062) 
Committee on Budget, Finance and Administration  
   
REPORT OF THE MEETING HELD ON 1 APRIL 2004 
  
1. The WTO Committee on Budget, Finance and Ad ministration met on 1 April 2004 under the 
successive chairmanship of Mr. Joshua C.K. La w from Hong Kong, China, and Ambassador Henrik 
Rée Iversen from Denmark.  The terms of referenc e and composition of the Committee are set out in 
document WT/L/44/Rev.1.  The agenda contai ned in document WTO/AIR/2277 was adopted with 
one additional point regarding the convening a Comm ittee’s meeting on logistic matters and security 
questions. 
I. ADMINISTRATIVE UP-DATES AND PROGRESS REPORTS AS AT 
29 FEBRUARY 2004 
A. 
CASH SITUATION AND STATEMENT OF OUTSTANDING CONTRIBUTIONS  
B. INSTALMENT PAYMENTS FOR COUNTRIES IN ARREARS (CONTRIBUTIONS FROM 1987  AND 
EARLIER YEARS ) 
C. CONTRIBUTIONS OF OBSERVER COUNTRIES TOWA RDS THE COST OF SERVICES PROVIDED BY 
THE SECRETARIAT  
D. HUMAN RESOURCES  
E. EXTRA -BUDGETARY CONTRIBUTIONS : 
- TECHNICAL ASSISTANCE ACTIVITIY IN 2004 
- DOHA DEVELOPMENT AGENDA GLOBAL TRUST FUND  
2. A member of the Secretariat presented the cash situation, the statements of outstanding 
contributions as at 29 February 2004, the progress reports of payment by instalments for countries in 
arrears (arrears from 1987 and earlier years), and th e contributions of Observer countries towards the 
cost of services provided by the Secretariat.  As at 29 February 2004, the total contributions received 
from Members amounted to CHF 76,371,632 wh ile those from the Observers amounted to 
CHF 166,794.  The Capital Working Fund stood at  CHF 9,013,253 as at 29 February 2004.  Since 
29 February 2004, the following Members had made  payments:  (i) Austria, (ii) Cyprus, 
(iii) Denmark, (iv) Guatemala, (v) Kenya, (vi) Latvia, (vii) Lithuania, (viii) Mexico, (ix) the 
Netherlands, and (x) Tunisia.  In addition, th e following Observer had also made payments: (i) 
Belarus, (ii) Cambodia, (iii) the Holy See, (iv)  Tajikistan, (v) Uzbekistan, and (vi) Viet Nam. 
3. The Secretariat also presented a progress report on human resources, document CRP(04)04.  
He reported on the application of a salary adjustment  differentiated by grade on 1 January 2004.  With 
regard to the WTO Pension Plan, the Manage ment Board had appointed Watson Wyatt as its 
investment analyst/consultant and had begun its review  of the investment strategy of the Plan.  The WT/BFA/72 
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Management Board was also reviewing the transfer  agreement with the United Nations Joint Staff 
Pension Fund and continued its wo rk on the development of similar agreements with the IMF and 
World Bank.  In addition, the first full applica tion of the performance award system had taken place 
on 1 January 2004, on the basis of the performance evaluation reports for 2003.  An amount of CHF 261,000 had been available for non-pensiona ble bonuses and had been distributed among the 
139 staff whose service had been judged to have significantly exceeded performance requirements in 
2003. 
4. In reply to a question, the Secretariat reporte d that the bonuses varied according to the number 
of staff rewarded in the Division.  As it was the fi rst year that the performance award system had been 
applied, it would require a fine-tuning of the syst em.  In addition, management training would be 
continued in this respect. 
5. Members requested that the Secretariat inform  them once the Director-General had decided 
on the allocation of the two new posts approved for 2004.  With regard to the procedure of salary 
adjustment, one Member considered  that the salary adjustment should be explained to Members well 
in advance of the decision in order to provide them with the opportunity to monitor it and express 
their views.  According to the report on WTO salary methodology, document WT/BFA/64, it was 
stated that the Committee might revi ew the need for any minor techni cal adjustment.  The Member in 
question believed that the issue of adjustment was not only an internal management matter in the 
Secretariat, but also a matter for the Members, be cause such measures might cause a structural change 
in the budget in the future.  Bearing in mind that it was the first implementation of the salary methodology, the Committee should also monitor th e allocation of the salary scale especially when 
the WTO Secretariat was expanding its res ponsibility with increased budget and staff. 
6. Another member of the Secretariat presented  documents WT/BFA/SPEC /109 and CRP(04)05.  
He drew the attention of the Members to the s ituation of the balances of the trust funds as of 
1 January 2004, (document WT/BFA /SPEC/109) which could still be subject to minor changes as the 
accounts had not yet been technically closed.  The number of trust funds in 2004 had been reduced 
quite significantly compared to 2003.  This was due  to the fact that, when closing the 2003 accounts, 
the Secretariat tried to maximise the use of earm arked trust funds through the identification in the 
technical assistance activities completed in 2003 of  all those which responded to the particular 
conditions imposed by donors in their national trust funds.  This led to the exhaustion of a certain 
number of earmarked funds and therefore, to an in creased concentration of the resources in the Doha 
Development Agenda Global Trust fund (DDAGTF). 
7. He further highlighted the deficit of the Programme Support Fund at the beginning of 2004 
which was due to the fact that all L-posts were fina nced out of that fund in 2003.  This structural 
problem was addressed when considering the Techni cal Assistance and Training Plan for 2004.  It 
was decided at the end of 2003 to revert to the original practice of financing out of the DDAGTF all 
those L-posts directly involved in the delivery of technical assistance or training to beneficiary 
countries.  This decision removed 13 L-posts from the PSF and should be sufficient to progressively 
bring the PSF back to balance in the course of the year. 
8. With regard to the DDAGTF, a total of CHF 20. 6 million had been pledged thus far for 2004, 
taking into account the pledges initially made for 2002 that would be cashed in 2004 as well as the pledges for 2004.  With regard to cash flows,  the DDAGTF showed an uncommitted balance of 
CHF5.5 million as at 22 March 2004. 
9. A member of the Secretariat briefed the Committee on the Human Resources Management 
Committee, initiated by the Director-General, which was composed of the four Deputy Directors-General and the Office of the Director-General, with the Director of the Administration and General Services Division and the Chief of the Human Resources Section acting as Secretaries to the Committee.  A questionnaire was sent to all Directors requesting the la tter to review where savings in  WT/BFA/72 
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staff and running costs could be made.  The deadline fo r reply was set at end April.  It was expected 
that by June the ideas and comments received fro m the Directors would have been compiled and 
studied. 
10. The Committee took note of the various progress reports and the comments from the 
Members. 
II. INACTIVE MEMBERS 
11. Following the recommendation of the Prep aratory Committee of the World Trade 
Organization on the issue of Members in Category IV  of the administrative measures, the Secretariat 
prepared a list of Members which have accumulated, as at 29 February 2004, three or more years of arrears up to and including the financia l year of 2004 (document WT/BFA/W/108). 
12. Consequently, in accordance with paragr aph 7(b) of document PC/7, L/7578, the Committee 
recommends to the General Council that the foll owing Members be urged to liquidate their 
arrears:  
  
Antigua and Barbuda 
Burundi 
Central African Republic Chad Congo Democratic Republic of the Congo Djibouti 
Dominica 
Dominican Republic Gambia Ghana  Guinea 
Guinea-Bissau 
Malawi Mauritania Niger Rwanda Sierra Leone 
Solomon Islands 
Suriname Togo Zambia  
 
III. REVIEW OF GUIDELINES ON VOLUNTARY CONTRIBUTIONS FROM NON-
GOVERNMENTAL DONORS 
13. A member of the Secretariat presented the document WT/BFA/W/111 and recalled that the 
original Guidelines on the Voluntary Contributions, Gifts or Donations from Non-Governmental Donors was approved by the General Council on 15 December 2000 upon the recommendation from 
the Committee.  Since the year 2000, only two voluntary contributions in-kind from a non-
governmental donor had been received.  As calle d for in paragraph 9 of the Guidelines, the 
Committee started the review of the guidelines in Se ptember 2003.  Some Members requested that the 
Secretariat proposed ideas on streamlining the pro cess for acceptance of voluntary contributions from 
non-governmental donors. 
14. The Secretariat further highlighted the prop osed changes in the process of acceptance of 
voluntary contributions from non-governmental donors: (i) following an internal examination of the proposed donations, the Committee shall be notified of  the proposed contribution, (ii) the notification 
shall include full details regarding the activities,  aims and motivations of the non-governmental 
donors and the intended use(s) of the donation, ( iii) the Director-General  may accept the proposed 
donation if no objection is raised by Members 15 days after the date of the notification, or at the 
request of a Member, acceptance of the donation will be  deferred and placed on the agenda of the next 
meeting of the Committee, and (iv) full de tails relative to all accepted donations from non-WT/BFA/72 
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governmental donors and their uses shall be includ ed in the Director General’s Budgetary and 
Financial Report on extra-budgetary funds. 
15. The Secretariat further informed the Committee th at the original intention of keeping a public 
registry for all accepted donations from non-government al donors had not yet been implemented in 
view of the very limited response to date. 
16.  Most Members indicated that they could suppor t the proposed changes fro m the Secretariat.  
They also expressed support for putting relevant inform ation on the WTO internet web site in order to 
alert potential donors to the possibility of proposing su ch donations as well as to assure transparency 
with regard to donations accepted.  Some Member s suggested some textual changes in the proposed 
revised version while another questioned the a dvisability of adopting a revised procedure and 
wondered if there was any information that a pot ential donor had been deterred by the original 
procedure. 
17. The Committee took note of the various comments a nd requested that the Secretariat make the 
changes in the revised draft guidelines for discussion at the next meeting. 
IV. APPELLATE BODY OPERATING FUND 
18. A member of the Secretariat presented the document WT/BFA/W/110.  He recalled that 
document WT/BFA/W/106, which had been exam ined by the Committee in September 2003, 
indicated that there would be a deficit in the e xpenditure of the Appellate Body Operating Fund 
(ABOF).  The Secretariat presented two options for a ddressing the situation: (i) cover the deficit by an 
extra-ordinary expenditure under the 2003 regular budget should the budgetary situation so permit, 
and (ii) invoke WTO Financial Regulation 29(b), authorizing the Director-General to make an 
advance from the Working Capital Fund.  The deficit of the ABOF amounted to CHF 831,038 
(subject to audit).  It was estimated that there would be a budgetary surplus in 2003, which could cover the ABOF deficit.
1  He highlighted that it would be a one-time operation as an amount 
CHF 1,596,800 was budgeted each year for 2004 and 2005 as replenishments to the ABOF. 
19. In reply to query, the Secretariat indicated th at the savings from the WTO budget would come 
from the items of staff resources, communications , permanent equipment, expendable equipment, 
missions, Trade Policy Courses and the contribution to  the ITC.  One Member requested that, after 
audit, the Secretariat provide Members with a brief summary on such information. 
20. The Committee took note of the options presented in document WT/BFA/W/110 and agreed 
that the deficit of the ABOF at the end of 2003 be covered by an extra-ordinary expenditure under the 
2003 regular budget. 
V. LETTER FROM THE CHAIRMAN OF THE APPELLATE BODY 
21. A representative of the Secretariat presente d document WT/BFA/W/109, containing a letter 
from the former Chairman of the Appellate Body, which was self-explanatory.  He highlighted the 
reasons and concerns behind the request for an adju stment of compensation provided to the Appellate 
Body members.  The package of compensation was se t at the establishment of the Appellate Body in 
1995 and had not been adjusted for the last eight year s.  It had to be noted that, in addition to the 
compensation package, the Appellate Body members r eceived a per diem for the days of actual work.  
As it was important to ensure that high-calibre memb ers be available at all times, the Appellate Body 
members had to be on standby normally towards e nd March to end September, and the possibility of 
being available for other work was limited.  Further,  the Secretariat drew the attention of the Members 
                                                      
1 It is recalled that an overa ll surplus in the WTO accounts depends  on a number of elements, including 
the final budgetary situation as well as the level of receipt of contributions from WTO Members.  WT/BFA/72 
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to Annex 2 of the document, which provided inform ation on the remuneration of other international 
tribunals compared to that of the WTO. 
22. Some Members had doubts on whether the present compensation package, in addition to the 
per diem for days of actual work, would fall far behind the other organizations such as the 
International Court of Justice or the International Cr iminal Court.  Others felt that it was difficult to 
make comparisons as the mandates and conditions of such bodies were so vari ed and suggested that 
detailed comparative studies be avoided for this reason.  A number of Members indicated, without 
prejudice to the position which their capitals might take, that the possibility of adjusting for inflation might be taken into consideration. 
23. The Committee took note of the report and agreed  to revert to the question at the next 
meeting. 
VI. LONG-TERM TEMPORARY ASSISTANCE 
24. A member of the Secretariat introduced the document WT/BFA/W/113 a nd drew the attention 
of the Members to the fact that the vast majority of  short-term contracts were held by staff working in 
the support area in the Administration and Gene ral Services Division and Language Services and 
Documentation Division.  These contracts were mainly from grade 2 to 4. 
25. One Member recalled that, last year, at the time of the budget estimates, his Government had 
requested the Secretariat to provide some specif ic proposals and ideas on measures to control long-
term temporary assistance posts.  He would transmit th e information provided by the Secretariat to his 
capital and would revert to the question.  Another Member requested that the Secretariat provide a 
revised chart at its next meeting taking into acc ount of the 2004 approved consolidation of temporary 
posts. 
26. The Committee took note of the report and the comments from the Members. 
VII. ADJUSTMENT TO WTO DEPENDENCY ALLOWANCES 
27. A member of the Secretariat introduced doc ument WT/BFA/W/112, and recalled that the 
dependency allowances were based on the net salary at the mid-point of grade 9, which represented 
the average net salary level in the WTO.  The depe ndency allowances had therefore been recalculated, 
using the methodology set out in document WT/BFA/W/80, to reflect the new salary levels as of 1 January
 2004.  The Secretariat also proposed that, since the level of dependency allowances was a direct 
function of net salary, in the future, responsibility for th e setting of the level could be assigned to the Director-
General who would report changes to the Committee.  
28. In reply to query, the Secretariat confirmed that  there would be no financial implication as a 
result of the adjustment.  The Secretariat would check the date of approval of adjustment to 
dependency allowances as set out in document WT/BFA/W/80. 
29. One Member indicated that he would refer to his capital on the proposal of the Secretariat on 
delegation of authority to the Director-General fo r the determination of adjustments of dependency 
allowances in accordance to the methodology set out in WT/BFA/W/80. 
30. Taking into consideration the comments of the Members, the Committee recommends to 
the General Council to approve (a) the amendments  to Annex 2 of the WTO Staff Rules as set 
out in document WT/BFA/W/112.   The Committee will revert to part (b) of the draft 
recommendation at its next meeting.    WT/BFA/72 
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VIII.  OTHE BUSINESS 
31. Two Members requested that a meeting on logistics matters and security questions be 
organized in the near future. 
32. The Secretariat informed the Members that the newly appointed chief of security is studying 
ways and means to improve security in the WTO.  When cleared by the Senior Management, his 
recommendations will be put forward to the Co mmittee on Budget, Finance and Administration. 
IX. ELECTION OF CHAIRPERSON 
33. The Chairperson recalled that the Chairman of  the General Council had carried out informal 
consultations on the appointment of Chairpersons to the different WTO standing bodies in accordance 
with the established guidelines for such officers.  On the basis of the understanding reached, Mr. Law 
proposed that the Committee on Budget, Finance and Administration formally elect Ambassador 
Henrik Rée Iversen of Denmark as chairperson of  the Committee by acclamation.  The Committee so 
agreed. 
34. Before handing over his chairmanship, Mr. Law thanked all Members for their guidance and 
cooperation, and paid tribute to the Secretariat for its professional support.  He also recalled some of 
the positive results achieved by the Committee on B udget, Finance and Administration over the past 
12 months, including the WTO salary methodology, biennial budgeting, and the consolidation of 
longterm temporary assistance in the regular budget. 
35. The elected Chairman assumed the Chair and thanked the Committee for its confidence and 
looked forward to a fruitful year in 2004.  
 POINTS FOR DECISION:    Paragraphs 12 and 30  
__________  