RESTRICTEDWORLD TRADE
ORGANIZATIONWT/BFA/W/41
11 May 2000
(00-1955)
Committee on Budget, Finance and Administration
NON-GOVERNMENTAL CONTRIBUTIONS TO THE WTO
1 The attached Director General’s draft proposal concerning the treatment of voluntary
contributions gifts or donations from the privat e sector embodies a number of adjustments based on
the comments made during the informal meeting of the Budget Committee held on 11 April 2000.
2 The following remarks may facilitate further discussions on the issue.
General
3 Many international organizations nowadays receive considerable funding from the private
sector.  A paper on the practice of other international organizations in respect of private funding will
give an indication in this respect.  Financial Regulation 19 in principle puts the WTO in the positionto accept voluntary contributions, gifts or donations also from the private sector.  Unlike other
international organizations, the WTO has not yet been approached by private donors.  If certain of our
activities could be co-financed by donors from the private sector, next to voluntary contributions from
the Members, the WTO would be better placed to respond.  It is in anticipation of such voluntary
contributions that the Secretariat proposes these draft rules on treatment of voluntary contributions,gifts and donations from the private sector.  Rules are always better made in tempore non suspecto ,
i.e. when potential donors have not yet been in a position to influence them.  Which is not to say that
they may not need to be adapted in the light of later experience with actual donors.
Point 1
4 Regulation 19 of the Financial Regulations states that "voluntary contributions, gifts or
donations may be accepted by the Director-General" on two conditions.  One of these is that thepurposes for which the contributions are made are consistent with the policies, aims and activities of
the WTO.  The WTO is in a somewhat special position compared to other international organisations
which may accept voluntary contributions on more or less the same conditions, due to its dispute
settlement activity.  Any company or for-profit organization which is capable of donating substantial
sums of money to the WTO over the long haul is likely, sooner or later, directly or indirectly, to beimplicated in, or to develop an interest in, a di spute settlement procedure between the Members.  This
will inevitably create the impression of impropriety or conflict of interest.  For that reason it has been
considered best to exclude the acceptance of donations from companies and for-profit organizations
completely.
5 The distinction between companies and for-profit organizations on the one hand and non-
profit organizations and foundations on the other should be based on this distinction, as it exists in the
national legal systems of the Members.  Virtually all national legal systems have this distinction and
usually the statutes of the organization in question make it clear what the aims of the organization or
company are, including whether a profit should be made and what, if any, the destination of such
profit should be.WT/BFA/W/41
Page 2
Point 2
6 Obviously even non-profit organizations may have very strong ideologically or politically
oriented objectives.  Hence the objectives of these donor organizations  should be broadly compatible
with those of the WTO.  Point 2(b) thus slightly elaborates on Financial Regulation 19.1 which
restricts itself to stating that the purposes for which the contributions are made  should be consistent
with the policies, aims and activities of the WTO.  It is felt, however, that that is not enough, if the
aims of the foundation concerned are unsavoury, such as – to take an extreme example – the
stimulation of discrimination.  In such a situation the purpose for which the contribution is made can
be entirely above board, but the WTO would still be compromised by accepting a gift from such a
donor even for a proper purpose.
7 It is for this reason that point 2(b) lays down strict conditions of compatibility between the
activities, aims and motivations of the potential donors and those of the WTO.  In addition thatprovision also refers to a possible conflict of in terest on the part of the donor or the WTO.  This
situation might arise if the private individual, non- profit organization or foundation has strong links
with a company, as is not infrequent nowadays.  Th us a benevolent individual who is the director of a
company from which the WTO regularly procures may still have a conflict of interest, even if his
objectives in donating monies to the WTO are completely compatible with those of the organization.
Regulation 19.1 retains its full validity next to the elaboration provided for in point 2.
Point 3
8 The second condition  on which voluntary contributions, gifts and donations may be accepted
under Financial Regulation 19.1 is that, in case such contributions involve additional financialliabilities for the WTO, the consent of the Committee on Budget, Finance and Administration is
required.  The rationale behind this condition is that such additional liability implies that other
Members will suffer budgetary consequences in the form of a higher assessment of contribution as a
consequence of the voluntary contribution from the private sector.  To give an example, if a wealthy
private foundation were to support a major WTO training programme in the Least DevelopedCountries, this could entail the recruitment of extra personnel in the personnel division of the WTO in
order to carry out the recruitment of temporary training personnel and even the renting of additional
office space for such personnel.  These sums would then appear on the normal budget of the WTO
and lead to higher budget assessments for the Members.
9 Therefore point 3(a) states the principle that such additional financial liabilities should not
result from the private donation and thus implicitly that any additional overhead costs for the WTO
should be borne by the private donor as well.  (Traditionally the UN organizations, and the WTO as
well, apply a 13% criterion for such overhead costs, when accepting voluntary contributions from the
Members.) Even if such additional financial liability  will not result from the voluntary contributions,
the Committee on Budget, Finance and Administration needs to be informed of them.  This will give
the Committee the possibility to verify that the rules for the acceptance of such contributions are
being followed.
10 Point 3(b) merely restates the second condition of Financial Regulation 19.1, in case the
voluntary contribution from the private sector inadvertently were to lead to additional financial
liability for the organization.  In that case the explicit consent of the Committee on Budget, Finance
and Administration is necessary.
Point 4
11 According to Financial Regulation 12.1, normal expenses of the WTO shall be financed from
Member contributions and miscellaneous income.  Voluntary contributions in respect of which no
purpose is specified shall, according to Financial Regulation 19.3, be treated as miscellaneous income.WT/BFA/W/41
Page 3
hence such gifts with an unspecified purpose will be used in the normal budget.  This makes it
impossible to verify for which purpose they are going to be used and hence to be sure that the purpose
for which they are going to be used is consistent with the policies, aims and activities of the WTO
within the meaning of Regulation 19.1. The idea behind point 4 is, therefore, to limit gifts which can
be regarded as miscellaneous income and thus used to finance the normal budget to a level at which
an incompatibility of purposes is going to be so unimportant as to be de minimis .
12 The rest of the gifts would have to be in trust funds or special accounts and their use could
hence be controlled more easily, so as to render problems under Regulation 19.1 and point 2 unlikely.
This would also serve as a guarantee that voluntary contributions from the private sector are not goingto be used to finance core activities of the WTO, such as trade liberalization and dispute settlement.  It
is self-evident that such activities should not be made dependent on contributions the flow of which isby nature uncertain, but should continue to be financed from the assessed budget of the organization
which provides a constant and reliable source of income.
Point 5
13 There should be certain restrictions on donors with respect to the use of the name or the logo
of the organisation.  From a recent meeting of legal advisers of the UN system and affiliated
organizations it transpired that the use of the name or the logo by a donor should be allowed only if nocommercial purposes are served thereby and the interest of the organization is primary.  In the case of
the WTO, it is considered unacceptable that a donor should have the use of the name or the logo of the
Organization on a permanent basis simply because he or she is a donor.  In such a situation the
commercial or propagandistic interest of the donor would prevail.  This is  laid down in the first
sentence of point 5(a).  The second sentence leaves open the possibility for foundations to use thelogo of the WTO on an occasional basis, e. g. when organising a conference or symposium.
14 It would also seem inappropriate to give the donors, even if their purposes are consonant with
those of the WTO, an inside track on the hiring of WTO personnel.  Only if such personnel from a
donor has particular expertise that cannot be found elsewhere, secondment from the donor's
organization should be allowed.  Obviously personnel from donor organizations may follow thenormal track for recruitment of regular WTO personnel.  See point 5(b).WT/BFA/W/41
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Proposal by the Director-General
1 Voluntary contributions, gifts or donations from non-governmental donors which are for-
profit organizations or companies shall not be accepted
2 (a) Voluntary contributions, gifts or donations given or bequeathed by private individuals
and non-governmental, non-profit organizati ons or foundations may be accepted.
(b) The activities, aims and motivations of the individuals, non-profit organizations or
foundations mentioned under (a) above shall not be incompatible with the policies, aims and activities
of the WTO and shall not give rise to a conflict of interests on the part of the donor or the WTO.
3 (a) In case voluntary contributions, gifts or donations may be in conformity with point 2
above, they shall not directly or indirectly involve additional financial liability for the organisation.  In
such cases the Committee on Budget, Finance and Administration shall be informed of them.
(b) In case they involve such additional financia l liability, they shall require the consent
of the Committee on Budget, Finance and Administration in conformity with Financial Regulation
19.1
4 (a) Sums of over [CHF. 100.000,-] may only be accepted as voluntary contributions, gifts
or donations under point 2 above, provided that the donor specifies their purpose. In accordance with
Regulation 19.2 such monies shall be treated as trust funds or special accounts.  They shall not be
used to hire regular staff of the WTO.
(b) Sums for which no purpose is specified by the donor and accepted as miscellaneous
income and which consequently may be used to finance the expenses of the WTO pursuant to
Regulation 12.1, shall not exceed [CHF 100.000,-].
5 (a) Donors of voluntary contributions, gifts or donations shall be prohibited from using
the WTO name or logo in any way as a result or condition of the contribution, gift or donation. In
specific instances they may use the WTO name or logo after express written authorization by theDirector-General.
(b) Secondment of staff from donors of voluntary contributions, gifts, or donations to the
WTO is excluded, unless the WTO is unable to recruit persons with the required expertise for the
assignment concerned elsewhere.
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