RESTRICTED  
  
WT/BFA/W/507/Rev.2  
 
24 February  2021 
(21-1529) Page: 1/2 
Committee on Budget, Finance and Administration    
 
 
PROPOSED FINANCIAL REGULATION FOR CONTINUATION OF OPERATIONS  
PENDING THE APPROVAL OF THE BUDGET  
Revision  
1  PROPOSED FINANCIAL REGULATION  
1.1.  The overall authorization for the WTO Secretariat to incur expenditure is granted through 
Financial Regulation 20, which reads as follows:  
"The adoption of a budget by the General Council shall constitute an authorization to 
the Director General to incur expenditure for the purposes for which the appropriations 
were adopted and up to the amount s so adopted."  
1.2.  Financial Regulation 20 presupposes that, at any time, the WTO will be operating with an 
approved budget. Unlike some other international organizations, the  WTO does not have a Financial 
Regulation that would foresee or address a situation w hereby the CBFA is unable to endorse the 
budget recommendation, or the General Council is not in the position to formally adopt a budget 
before the commencement of the relevant financial period.  
1.3.  Financial Regulation 10 currently in force reads as follows:  
"The Committee shall examine the budget proposal and seek further explanations and 
amendments as it deems necessary. Once the Committee has completed its 
examination, it shall prepare a report and a recommendation which shall be submitted 
to the General Co uncil for adoption. " 
The proposal is that this current text be changed from Financial Regulation 10 to 
Financial  Regulation  10(a).  
 
1.4.  An extension to the current Financial Regulation 10 is proposed to put in place a regulation 
that would enable the continuan ce of operations and authorization of the Director -General to incur 
expenditure, pending the approval of the budget, if such approval does not take place before the 
beginning of a new financial period. The proposed text does not in any way relieve Members of their 
commitment and obligation to act promptly on regular budget matters.  
1.5.  The additional new text proposed for Financial Regulation 10 would become 10(b) and reads 
as follows:  
"If, on the first day of a financial period, the budget has not been adopted  pursuant to 
Regulation 10(a), the Director -General shall have interim authority to approve 
expenditures in order to ensure the continued operation of the WTO in the interval 
between the end of the previous financial year and the adoption of the budget for  the 
new financial period.  
More particularly:  
(i) the Director -General shall have interim authority to make commitments 
necessary for the preservation of the assets of the Organization and to make payments 
in discharge of existing legal and contractual obligations. Such payments may relate to WT/BFA/W/507/Rev.2  
 
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  staff expend iture (such as staff remuneration, staff pension and post -employment 
benefits, and staff health and invalidity insurance); expenditure for general services 
(including with respect to outsourced service contracts relating to buildings and 
equipment, cleanin g, security, and IT services, and expenditure relating to water and 
electricity); and necessary financial expenditure  (such as bank fees and reimbursement 
of the building loan).  
(ii) however, the Director -General shall not have the interim authority to enter into 
new commitments for capital expenditure and may not  enter into new cont racts with or  
renew or extend the contracts of temporary short -term staff or outside consultants, 
except where the General Council decides that such expenditure is necessary .  
(iii) the Director -General shall, in exercising this interim authority, provide 
expenditure reports to the General Council at each of its meetings during the interim 
period or in writing, on a quarterly basis, if there is no meeting of the G eneral Council 
during the relevant period . 
(iv) the Director -General's authority under this provision shall not extend beyond the 
end of the second quarter of the financial year for which the budget is pending, unless 
the General Council decides otherwise.  
(v)  the Director -General shall request Members to pay contributions in accordance 
with the last assessed contributions until the budget for the new period is adopted . 
Subsequent to the adoption of the budget by the General Council, adjustments to the 
assessed contributions due from each Member will be notified by the Secretariat through 
revised statements of account  and effected through the adjustment of contributions for 
the next budget year ." 
 
 
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