RESTRICTED  
  
WT/BFA/189  
 
22 October  2020 
(20-7317) Page: 1/5 
Committee on Budget, Finance and Administration    
 
 
REPORT OF THE MEETING HELD ON 5 OCTOB ER 2020 
The Committee on Budget, Finance and Administration (CBFA) met on 5 Octob er. His Excellency 
Ambassador Manuel Teehankee  (Permanent Representative of Philippines  to the WTO ), welcomed 
Members .  
 
DDG Brauner informed the Committee that Interprefy has been installed in two additional meetings 
rooms, noting that a glitch had been discovered in Room W prior to the start of the CBFA meeting, 
thus occasioning the meeting being moved to Room S 1.  
 
DDG Brauner requested delegates to reduce the heat in their cars several minutes before  reaching 
the WTO premises as body temperatures had been showing high readings, often as a result of the 
heat emitted in the cars.  
 
The Chairman stated that the Co mmittee had commenced discuss ing the 2021 budget proposal 
during its meeting on 17 September. He said that the present Committee meeting was aimed at  
enabling a full an d ample discuss ion of  specific questions on the 2021 budget  proposal follow up  
questions to the document bearing the reference  WT/BFA/INF/12.  
 
The Chairman added that he would update the Committee on consultations that he had had with 
some Members in the preceding week relating to the potential for strategic plan ning and 
Financial  Regulation 10. He clarified that he would provide the updates in informal mode,  after 
discussion of the 2021 budget.  
 
1   WTO  2021 BUDGET PROPOSAL  – WT/BFA/W/ 523 
1.1.  The Chairman cited specific questions relating to the 2021 budget that he had  noted in the 
previous Committee meeting. These being request s for a more d etailed accounting of the Programme 
Support Fund ; and a better explanation regarding  regular budget staff time and resources being  
used to manage extra -budgetary funds, whereas only 10% of the 13% programme support cost  is 
transferred  to the regular budget.  
1.2.  In addition, there was also a request , as a supplement  to the 2021 budget proposal, for a 
detailed budget allocation breakdown  per Division so that Members can see the exact distribution of 
resources across the organization. The Chairman said that the Secretariat would distribute this soon.   
1.3.  The Chairman stated that he intends to consult with the ITC in advance of the next Committee 
meeting regarding questions pertaining to the contribution of the WTO to the ITC's budget.  
1.4.  Having opened the floor to any preliminary questions and comments, and there having been 
none, the Chairman  read out proposed revisions to paragraphs 3.4, 3.9, 3.45 and3.47. 
1.5.  A Member asked what order was being followed  for the meeting , to which the Chairman 
responded that he  was receiving refinements.   
1.6.  A Member  suggested that the amendments be projected  on the screen . Other Member s made 
similar requests, adding t hat they would need the written text so that they can accordingly confer 
with their capitals.  
1.7.  The response to the request was that a non-paper of the proposed amendments would be 
distributed to Members after the meeting . WT/BFA/18 9 
 
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  1.8.  A Member stated that cost recovery  from trust funds is  inadequate  and stated that this ought 
to be addressed in the near future when trust funds are reviewed. Referring to Table 4 of the budget 
proposal, he said that only 1.3% of the overall amount earned through Programme Support Costs 
was transferred as revenue to miscellaneous income. This percentage being 10% of 13%. The 
Member said that the same questions are numbers 1, 2 and 3 in the document with the reference 
WT/BFA/INF/12.   
1.9.  Referring to Table s 88 and 90  in the document with the refe rence WT/BFA/W/527, the Member 
asked for clarification regarding the  amount  that was transferred to organizations that were 
implementing partners for several SDTF projects  in 2019.  
1.10.   An Official of the Secretariat explained the overhead charges in relation to extra -budgetary 
funds, stating that the mechanism was decided by the General Council and is included in 
Financial  Regulation 19 , which states that "…A standard overhead fee of up to 13% may be charged 
on direct expenditure incurred by trust fun ds to reflect supporting services provided by the 
Secretariat. The standard overhead rate can be reduced when implementing partners are being used 
and when defined in the agreement signed with the donor. The Programme Support Fund collects 
the overhead fee s from all trust funds and pays expenditure incurred to support the trust funds 
activities. The Programme Support Fund also releases a fee representing 10% of its expenditure to 
the WTO Secretariat that will record it as miscellaneous income."  
1.11.   The Official  of the Secretariat explained that there are two c ost recovery mechanisms . 
Specifically, d irect costs are incurred for , and can be traced in full to, an organization 's activities, 
projects and programmes in fulfilment of its mandate. Included in this categ ory are costs of project 
personnel, equipment, project premises, travel and any other inputs necessary to achieve the results 
and objectives set out in programmes and projects.  Fixed indirect costs are incurred by the 
organization regardless of the scope a nd level of its activities and cannot be readily traced to specific 
activities, projects or programmes. Fixed indirect  costs typically include the top management of an 
organization, its corporate costs and statutory bodies not related to service provision.  
1.12.   The Official of the Secretariat said the money collected via the overhead mechanism  is 
channelled into a Programme Support Fund where it is subsequently used to pay indirect cost s in 
areas that provide support for activities funded by trust funds.  
1.13.   The Mem ber that had posed the questions stated that he was, so far, satisfied with the 
responses given to his questions on the Programme Support Fund.  
1.14.   The Chairman asked that the text on the fourth row of Table 4 in document WT/BFA/W/523 
be corrected to replace t he wor d "form" with "from" . 
1.15.   A Member asked how comparator international organizations handle their P rogramme Support 
Funds. 
1.16.   A Member suggested  that an explanatory footnote could be added to Table  4 in 
WT/BFA/W/523 in order to describe the transfer of funds  from the Programme Support Fund . 
1.17.   A Member said his delegation appreciate s the dialogue on the Programme Support Fund. He 
emphasized that trust funds are important to the organization, are within the WTO and enhanc e 
support of the work of the organization. He noted that donors  motivate for these in line with their 
financial rules and guidance.  
1.18.   The Member said that the 13% overhead is reasona ble and in line with  common practice in 
other international organizations. He added that his delegation is open to discuss ing the exact 
distribution of resources, perhaps as part of an overall discussion on the management of trust funds.  
1.19.   A Member explaine d that his concern is the lack of  guidelines for managing the time staff 
members on regular budget posts spend working on trust fund matters. He said that though the 
current incidence rate may be low, there is a risk of this going out of proportion as with  the ITC.  
1.20.   The Member  said the proposed amendment to paragraph 3.47 address es the question that 
his delegation had raised to ensure that reallocation of funds to the Building Renovation Fund is WT/BFA/18 9 
 
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  specific. He said that the information that this is e xpressly state d in the guidelines of the Building 
Renovation Fund  is useful.  
1.21.   A Member expressed appreciation for the proposed extension of paragraph 3.4 . 
1.22.   Another Member suggested that paragraph 3.4 could also include an elaboration on why a 
reallocation o f the budget to short -term posts is not advisable at this stage. An alternative suggestion 
was the addition of a footnote to paragraph 3.4 .  
1.23.   The Chairman  said that the elaboration of paragraphs 3.4 and 3.47 would foreshadow possible 
reallocation of funds d uring the course of implementing the budget.  
1.24.   A Member said that clear guidelines for the recruitment of short -term staff would be good.  
1.25.   A Member asked for clarification of  the costs of Interprefy  and whether it was  envisage d that 
this system would be in p lace for the longer term  and if WTO Interpreters were covering meetings 
on Interprefy.  
1.26.   DDG Brauner said Interprefy has a cost structure which has a basic fee, plus variable  fees per 
user, per minute as well as charges based on the language used. He said that the in -house 
Interpreters were using the system, at times supplemented by freelancer s as before , and thus there 
was no additional charge for interpretation services. DDG Brauner added that the Secretariat is 
observing the market since companies a re in the process of enhancing their offerings to include  
interpretation . He informed the Committee that the Secretariat is doing market research and  will 
undertake  a complete procurement process . He said that the virtual platform currently in place is 
costly for  running meetings and that it was put in place as it was immediately  available when the 
need to provide virtual meetings came to the fore due to the pandemic.  
1.27.   An Official of the Secretariat said that the key elements that are important for virtual p latforms 
that can be used by the WTO are  security of information  and the ability for interpretation to be 
conducted. She said that cu rrently the re are limited service provider s on the market that offer these 
two aspects , one being  Interprefy . She added tha t patience is necessary as the market offerings are 
evolving and that the market may be ready with other comparable products within six month s. She 
gave examples of prospective virtual platforms as being  Webex, Zoom, Interactio and Kudo s. The 
Official of t he Secretariat highlight ed that some organizations  use Interprefy as a package that 
comprises of  the technology plus Interpreters  from the company that provides the technology . She 
said that the WTO is  only sourcing the technology and is using in -house Int erpreters and freelance rs. 
1.28.   A Member asked whether the CHF 600,000 that was reallocated to travel for technical 
assistance activities is realistic, considering the unknown period for the end of the pandemic.  
1.29.   A Member asked why there was an increase in the amount of a ir and rail travel yet there was 
no corresponding change in the budget amounts for per diem and  accommodation.  
1.30.   Clarifying his delegation's comments regarding paragraph  3.45, a Member said that their 
request consists of simply keeping the bu dget line for the Appellate Body Operating Fund as it is. He 
added that his delegation fully take s note that the amount allocated to the Appellate Body  Operating 
Fund budget line in 2021 is zero . He said their delegation does not want  this budget line abolished.  
1.31.   The Member added that their delegation would work very hard to try to resume the 
Appellate  Body activities and if, that ever happens, there  must be an appropriate budget line and 
funds allocated to it.  
1.32.   A Member asked for clarification of the reque st regarding the Appellate Body Operating Fund 
saying that a distinct budget line for this is already included in Table 3 . The Member said that his 
delegation cannot endorse the call that the A ppellate Body Operating Fund live on . The Member said 
his deleg ation had questions about why this fund existed as a separate fund absent oversight. He 
said they had also raised questions relating to  the administration of th e fund. He said t his is a 
separate issue from whether or not there are actually resources availa ble to conduct activities.  WT/BFA/18 9 
 
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  1.33.   The Member said the Appellate Body Operating Fund is an open question  and that discussions 
are needed as to whether the organization would ever return to this operating fund approach . He 
added that his delegation found the operating fund approach to lack transparency  and oversight, 
particularly with respect to compensation practices. The Member said that he was not suggesting 
that there are no resources elsewhere to conduct the activities that would be a ssociated with an 
appellate hearing. The Member asked if the delegation  that had expressed the request on the 
Appellate Body Operating Fund could state  clarify its request more and if they find Table 3 to be 
deficient in some way.  
1.34.   The Chairman said that h e would conduct consultations on the Appellate Body Operating Fund  
budget  line. 
1.35.   A Member said that from his context, discussion of O utput Reporting and Strategic Planning 
could be deferred to the next year  as these ha ve no bearing on the 2021 budget.  
1.36.   An Of ficial of the Secretariat said that supplementary information, showing a divisional 
breakdown of the budget, would be circulated. She added that this would contain a table showing 
the detailed allocation of the travel budget as some Divisions ' travel inclu de other parties besides 
staff members of the said Divisions e.g. the ITTC travel  budget includes travel of participants in 
Advanced Trade Policy Courses and Regional Trade Policy Courses.  
1.37.   A Member said that his delegation is still keeping an eye on the bu dget allocation to ITC  as it 
represents 10% of Member s' assessed contributions . 
1.38.   The Chairman called out the paragraphs for which changes were proposed. These are: 
paragraphs 2.1, 3.4, 3.9, 3.44 and 3.45. He reiterated the request for  information regarding budget 
allocation  by Division . 
1.39.   A Member asked what the next steps on the budget would be? Whether a revised version of 
the budget proposal would be circulated ? and the format of the suggested  meeting on output 
reporting and strategic planning.  
1.40.   A Member recalled that on 17 September one quarterly report had not been discussed and 
said that the report of the meeting indicated that this would be superseded by the report of the third 
quarter. He asked if there were any  comments on the second quarter reports for the regular budget 
and for trust funds.  
1.41.   An Official of the Secretariat thanked the Member  for recalling that the second quarter reports 
had not been  fully discussed . She said that, considering that the third quarter reports would be on 
the agenda of the next Committee meeting, the Secretariat respectfully request s Members that 
questions relate d to the second quarter reports be raised when the third quarter reports are 
presented . She asked if Members wished to make  comments on the second  quarter reports that 
could help the Secretariat to  enhance the  reports for the  third quarter . 
1.42.   A Member welcom ed the narrative on COVID -19 incorporated in to the second quarter reports 
and requested that updates on how COVID is affecting Members' and the Secretariat's work  be 
included  in future quarterly reports.  
1.43.   A Member said that whilst taking the point that the third quarter reports would be tabled 
shortly , he had some questions that may or may not be directly related to the Administration and 
General Services Division  but are worth putting on record.  In this regard, the Member said i t would 
be good to get an  update  on the Natural Disasters  and Trade Trust Fund. He said that the 2019 
Financial Performance Report states that this trust fund  had been closed yet it was still showing up 
in the reports.  
1.44.   The Member said the EIF was specifically  created to address L DC issues but now extra LDC 
trust funds were being created. He said that his delegation takes the point that EIF operates on a 
full cost recovery mode but now EIF is creating trust funds that are manage d by the Secretariat, 
thus shifting some cost to the regular budget. He said that it was not clear why the WTO is managing 
trust funds pertaining to the EIF. The Member said he still ha s questions about why the WTO is  
implementing UN -funded  trust funds. He added that  there do not seem to be any activities , or WT/BFA/18 9 
 
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  extremely slow disbursements , against  the China Development Cooperation Research Initiative and 
the ASYCUDA database. He said the auditors had mention ed that some of these trust funds , that do 
not seem to disburse anything , appear to cost more to operate.  
1.45.   The Member said Table 17 in the 2019 Financial Performance Report (WT/BFA/W/527) shows  
another EIF trust fund, the cotton fund,  that is being  implement ed by the WTO that does not seem 
to have moved . He said, according to the documentation that Mem bers were given  upon acceptance 
of the trust fund resources, the cotton fund ought to  have moved out of phase one by the end of 
2019, yet it has  only spent half of its money. He expressed the view that the  premise is poor if the 
WTO cannot spend the money and that this suggests that  the concept was flawed . The Member said 
that, at some point , Members  need to rigorously examine trust funds , including the T rade Facilitation 
Agreement  Fund, that seem to have limitations for  disburs ement .  
1.46.   The Member said quart erly report s give Members  a chance to ask questions  but it does seem 
like a lot of trust funds are not performing the way that they were presented as going to perform , 
yet they stay on the books and they cost the WTO  money. The Member said that his delegat ion 
wants to flag these issues and that, at some point , Members ought to fo llow up and get some more 
details on why these trust funds cannot disburse funds and that if the activities that they proposed  
to finance  cannot actually be implemented then perhaps  another home could be found for these 
trust funds.  
1.47.   An Official of the Secretariat expressed appreciation for the Member's comments and clarified 
that the  National Disaster  and Trade Trust  Fund is in fact closed but would continue to be reflected 
in the quarterly reports, with a balance of zero going forward , until the 2020 financial statements  
are audited . 
1.48.   The Official of the Secretariat said though some trust funds have different rates of expenditure 
it ought to be remembered that the global pandem ic has impacted the ability to spend against these 
trust funds in the first half of the year. He added in relation to the auditor's comments that smaller 
funds have set up costs, but once they are set up the marginal costs are minimal.  
1.49.   In closing the disc ussions, the Chairman said that the time for issuing a revised budget 
document had not yet arrived.  
1.50.   Before adjourning the formal meeting, and going into informal mode, the Chairman said that 
the next formal meeting would be on 22 October  and that the agen da would include the topic of 
Strategic Planning.  
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