RESTRICTEDWORLD TRADE
ORGANIZATIONWT/BFA/W/92
20 March 2003
(03-1644)
Committee on Budget, Finance and Administration
POSSIBLE BIENNIAL BUDGETING IN THE WTO
1. At it’s meeting on 7 February 2003, the Committee on Budget, Finance and Administration
examined a preliminary discussion paper on Biennial Budgeting and its possible application in theWTO.
Background
2. In the course of meetings of the Committee in recent years, and in particular in the autumn
of 2002, an interest in this question was made know n by Members.  It was felt that the introduction
of biennial budgeting in the WTO would allow a better planning and strategic thinking for theOrganization, and would provide both Members and the Secretariat with greater predictability with
regard to the financial requirements of the WTO.
3. In that light, the following recommendation was communicated to the General Council:
“The Committee also recommends that the General Council take note of the Committee’s intention
to study, on the basis of a paper from the Secretariat, the feasibility of a move to a biennialbudgeting and to make recommendation in that respect to the General Council in the first quarter of
2003.” (WT/BFA/62, paragraph 10)
4. In the examination of the first discussion paper (CRP(03)02) on 7 February 2003, some
Members expressed the view that the current annual budgeting process might be better suited to the
needs of the organization.
Application
5. An estimated biennial budget proposal would be submitted to the Committee on Budget,
Finance and Administration for discussion in the autumn preceding the first year of the biennium.
The first year estimates would be based on the approved budget of the current year plus variations
foreseen (inflation, statutory increases/decreases, increased activities, etc.).  The second year
estimates would be presented by budget-line on the basis of the first year estimates plus inflation as
well as (i) staffing and (ii) foreseeable statutory and other increases/decreases.
6. The requirements of the Appellate Body Operating Fund (replenishment) would be
presented at the same time of the regular budget estimates for the 1st and 2nd year.1
7. The recommendation on the estimated biennial budget would be submitted to the General
Council for approval as soon as possible, but in any event by December.
                                                     
1 It is strongly recommended that the replenishment of the Appellate Body Operating Fund be
integrated into the regular budget in order to avoid situations (as currently exist) whereby the balance in the fund
will be insufficient to finance the activities until the end of the year.WT/BFA/W/92
Page 2
Performance Report and Revision
8. In the first year of the biennium, the Co mmittee on Budget, Finance and Administration
would examine a Performance Report prepared by the Secretariat covering the first seven months of
the year.  On the basis of actual and expected rates of expenditure and miscellaneous income, as
well as inflation rates and other elements which could not be anticipated when the biennial budgetwas approved, the Committee would examine the need to recommend adjustment to the second year
of the biennial budget, either up-ward or down-ward, and communicate such an eventual
recommendation to the General Council.
9. The possibility for the Director-General to make proposals for a supplementary budget (as
currently provided for in the WTO Financial Regulations 8 and 9) would be retained in case of
necessity.
Contributions Assessed on Members
10. For the first year of the biennium, Members would be assessed contributions on the basis of
the total approved appropriations (less estimated miscellaneous income) for that first year of the
biennium.
11. For the second year of the biennium, Members would be assessed contributions based on the
total approved appropriations (either as adjusted up-ward or down-ward) for that second year. In thiscontext, Members may wish to consider the possibility of maintaining the original percentage share
of participation for the entire period of the biennium, which would have the advantage of greater
predictability, or to approve a new percentage share for the second year of the biennium.  This
approach would have the advantage of reflecting up-dated trade shares and could also incorporate
more quickly new WTO Members into the scale of contributions, if accession had taken placesubsequent to the approval of the first scale of contributions.
Auditing and Reporting of a Biennial Budgeting Cycle
12. The final accounts for the biennium would be audited in the year immediately following the
biennium.
13. The Director-General’s Budgetary and Financia l Report and Report of the External Auditor
Thereon, and the Divisional Reporting on Objectives and Expenditures would be submitted to the
Committee on Budget, Finance and Administration subsequent to the completion of the audit.
Implications of Changing to a Biennial Budgeting Process
14. Aside from the points regarding better planning, strategic thinking and predictability, a
biennial budgeting process could in principle be seen as a more efficient use of time resources for
both Members and the Secretariat.  Rather than examining one complete annual budget proposal
each year, only revisions, should they prove necessary (see paragraph 7 above), would have to beexamined for the second year of the biennium, thereby presumably being a more efficient process in
terms of use of available time.
15. A biennial approach would also reduce the number of financial and budgetary reports which
the Committee would have to examine; such reports would cover the entire two year period rather
than each year.WT/BFA/W/92
Page 3
16. Such an approach could also facilitate an in-depth assessment on the programmatic aspects
of the WTO, including the attainment of objectives from the previous budgetary period, during the
first year of the biennium, when no full budget ary proposal would be made for consideration.
17. Similarly, the external auditors could concentrate on value-for-money and management
audits in the course of the second year of the biennium, when final accounts will not need to becertified.
Timing of the beginning of a biennial budget
18. The starting of a biennial budgeting cycle may be best in the year following a Ministerial
Conference.  In this respect, consideration shoul d perhaps to be given to following the biennial
budget cycle of the United Nations (e,g. 2004-2005), in view of the implications for the ITC, which
is obliged to follow the UN biennium.  .
Extra-Budgetary Funds
19. Given the procedures specific to extra-budgetary funds, and in particular to the Technical
Assistance Plan, the planning and reporting could perhaps remain, at least initially, on an annual
basis.  The General Council decided in 2001 that the Planning of Technical Assistance should move
from a 3-year cycle to a yearly cycle.  Any decision in this domain would, therefore, also have to
take into account the rationale which prevailed in relation to that decision of the General Council.
Financial Rules and Regulations
20. The WTO Financial Regulations (document WT/L/156), Chapters II and III, “Preparation of
the Budget Estimates” and the “Adoption of the B udget”, clauses 5-11, provided that “the financial
period of the WTO shall be one calendar year.  Any change in the budgeting cycle would ultimately
necessitate a revision of the Financial Rules and Regulations, and perhaps the procedures for theestablishment of the scale of contributions (see paragraph 10 above).
In addition, consideration should be given to the level of the Working Capital Fund, which,
at its current level, would likely be inadequate  to cover needs for a budget covering a two-year
period.
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