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WT/BFA/196  
 
15 July 2021  
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Committee on Budget, Finance and Administration    
 
 
REPORT OF THE MEETING HELD ON 22 JUNE AND 1 JULY  2021 
The Committee on Budget, Finance and Administration (CBFA) met on 22 June and 1 July 2021. Her 
Excellency Ambassador Bettina Waldmann  (German  Ambassador  to the WTO ), welcomed Members 
to the meeting s.  
1  ADOPTION OF THE AGENDA  
 
1.1.  The Chair noted that the agenda for the meeting with the reference WTO/AIR/BFA/4 5, together 
with the annotated agenda with the reference JOB/BFA/5 3, and related documents were sent out on 
11 June 2021.  
1.2.  The agenda, as set out in document WTO/AIR/BFA/ 45, was adopted . 
2  WELCOME THE DIRECTOR -GENERAL  AND THE DEPUTY DIRECTOR -GENERAL TO THE 
MEETING  
 
2.1.  The Chair welcomed the Director -General (DG) to the meeting and expressed appreciation for 
her presence at the meeting to  present the budget proposal for the upcoming biennium . She added 
that th e Secretariat would  also provide an update on the external review of the organization.   
2.2.  The Chair then extended a warm welcome to Deputy Director -General (DDG)  Ellard , adding 
that she had briefly met with the DDG the previous day to touch on  several issues. The Chair said 
the Committee had been looking forward to the DDG's  arrival and the cha nce to work with her.  
2.3.  DDG Ellard t hanked the Chair  for her welcome and greeted the DG and all participants at the 
meeting. She said that she had been busily preparing and digging into the issues ahead of this first 
CBFA meeting, for her. She added that she is looking fo rward to meeting delegates and engaging 
with them. She said she realize s how important the budget is  and added that, i n her prior 
professional life, working for the US Congress, one of her responsibilities was oversight over USTR's 
budget.  She concluded by saying that she know s how the budget has a tremendous impact on the 
ability of an organization to carry out its mission.  
2.4.  Turning back to the DG, the Chair said that when they had last met the DG had outlined several 
of her ideas. She sai d the DG had indicated that she would propose to maintain the same cap in the 
2022-2023 budget proposal as has been applied over the past 11 years. She added that the DG had 
also said that, should the external review of the organization yield recommendatio ns that require 
additional funding to deliver reform and better serve the WTO Members, she would bring this to the 
attention of delegations at the mid -term review  of the biennial budget . 
3  WTO 2022 -2023 BUDGET PROPOSAL – WT/BFA/W/556  AND UPDATE ON THE 
STRUCT URAL REVIEW  
 
3.1.  The DG said she was glad to be at the Committee meeting , particularly with DDG Ellard.  
3.2.  She thanked the Committee for the work it has  been doing on the budget and the Chair for her 
dedication . The DG then thank ed the Director of the Administra tion and General Services and the 
team for having prepared  the budget document.  
3.3.  In introducing the budget proposal, the DG said, in  light of  the pandemic and the impact it has 
had on Members' economies and public finances, the budget proposal for  the biennium 2022 -2023 WT/BFA/196  
 
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  is being left at zero nominal growth. She mention ed that this budget has been held at the same 
nominal level since 2011 and so  in real terms it means a contraction.  
3.4.  She highlighted that t he reduction in the WTO's real resources has coincided with a time of 
rapid changes in the global economy, and in the way goods and services are produced and 
consumed. New challenges have emerged , above all problems of the global commons like the 
pandemic, climate change, technology change  and other issues . Adding that t hese changes have 
important implications on the multilateral trading system, the WTO and the way the WTO Secretariat 
works.  
3.5.  On the structural review, the DG said, s ince taking office, she has  consistently stressed the 
importance of assessing whether the Secretariat is still fit for purpose. She said she  sees some 
structural and procedural gaps looking hence her decision to have a t hird party have a look at the 
organization and recommend to the direction in which to move in order to serve Members better 
and to be fit for purpose for the new changes in the global economy.  
3.6.  The DG said a competitive procurement process was put in place led by the Director of  the 
Administration and General Services Division, culminat ing in McKinsey & Company  being chosen as 
the entity to lead the review. She noted that, as she mentioned in the previous Committee meeting, 
the entity will  look into the Secr etariat's purpose and strategy, structure, capacity, culture, 
capabilities, processes and  technology .  
3.7.  The DG said this  is the first time that an external consulting firm was solicited to conduct an 
independent diagnostic review of this scope since the organization was founded. She stated that she 
had been informed that, in 2005 , a Consultant looked into the issue of short -term positions and their 
potential continuous need, culminating in the Frankl Report , which is quite different from the scope 
of the work that is currently being undertak en.  
3.8.  She said various managers in the organization  had told her  that various Division s had had 
some internal change processes but this is the first time an overall look at the Organization is being 
conducted.  
3.9.  The DG mentioned Secretariat -driven initiatives such as Secretariat Version 3. 0, from 
circa 2003, and the Strategic Review which com menced in 2013 . The most recent exercise hav ing 
led to a review of several internal policies including ones on internal mobility, performance 
management and recognition programmes , reiterating that  these exercises have been much more 
limited in scope.  
3.10.   The DG added that, d epending on the result of the structural review, the Secretariat may 
need to be restructure d or investments made in order to better serve Members and serve the 
multilateral trading system. Staff development initiatives may be extended, depending on what is 
recommended, courses in organizational values and leadership and other such changes as may be 
needed to bring the Organization up to a higher standard . She said she is bringing this to alert 
Members that , depending on the outcome , which is not being prejudge d, the Secretariat may need 
to come to the CBFA  at the mid -term review to seek additional resource s. 
3.11.   Before ceding the floor to the Chief of Budget a nd the Director of the Administration and 
General Services Division to present  the key aspects of the budget proposal, the DG briefly update d 
the Committee on the progress of the structural review , saying the consultancy had started a week 
on Monday  and that an all staff townhall meeting had taken  place on Friday to inform staff memb ers 
of the methodology to be followed and to hear their thoughts. A survey has been distributed to staff 
as part of the process and focus groups will also be a format for consultation. At some stage the 
team also wants to reach out to Members to gather the ir views on how they think they can be better 
served.  She said i t is still very early in the process and that the Secretariat would give a further 
update as the process moves along.  
3.12.    Two Officials of the Secretariat outlined the major items of the Budget P roposals for 2022 
and 2023 and the funding of the budget by contributions and miscellaneous income  as well as the 
re-allocations within the biennium budget among Parts A , B and C of the budget.   WT/BFA/196  
 
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  3.13.   Notably, the travel budget for Technical Assistance was reduc ed by CHF 300,000 in 2022 and 
2023, respectively, thus returning the total budget amount to what it had been in 2020. Temporary 
assistance was increased by CHF 300,000 in 2023.  
3.14.   For 2022, relative to 2021, CHF 200,000 was reallocated from general services to capital 
expenditure and CHF 300,000 from travel and hospitality to financial expenditure.  
3.15.   Several Members thanked the DG for her presence at the meeting and warmly welcomed the 
new DDG.  
3.16.   Several Members highlighted the importance of technical assistance to its beneficiaries and 
the importance of its continuous funding as well as in -presence training activities.  
3.17.   Some  Member s appreciated the efforts the Secretariat had made to remain on  a zero nominal 
growth budget for more than 11 years. Some Me mbers also stated that if the WTO intended to move 
away from zero nominal growth, a careful justification would be needed.  
3.18.   A number of Members asked to be included in the consultations by the external consultants 
tasked with the Structural Review and also  asked for more details on the Delivery Unit.  
3.19.   A Member indicated that the current budget of the WTO was merely resource based and that 
it should move to being objective s based. He further highlighted that , in order to make that move, 
a strategic plan was needed.  
3.20.   Some Members highlighted the importance of output reporting in order to get a clear picture 
of where the resources were going.  
3.21.   A Member expressed concern about the reduction of the budget allocation for panellists and 
the increase of the allocation for negative interest.  The Members also expressed concern on some 
long-standing issues such as the over -expenditure on short -term staff, the costs incurred by the 
WTO on reimbursing staff members  chargeable to US income taxes and the procedural issues on 
consulting services. She hoped that those issues could be well addressed through the external review 
initiated by the D irector -General  or by the Secretariat in the future.  
3.22.   A Member recalled that his delegation had asked for a voluntary short -term cut for the 2021 
budget, in solidarity with Members , due to the pandemic and that he wished to re -iterate this request 
for the budget of 2022. He added that it was time for austerity and stressed the need spending 
taxpayers' money  well. 
3.23.   In response, t he DG said her former business had been to cut budgets and if the WTO asked 
for more that would be very well considered. She added that the structural review could not be 
prejudged, and that Member s would be asked only if additional resources were needed.  
3.24.   She also mentioned the savings realized through the measures to reduce the inverted pyramid 
and that these savings had now come to their limit. She further recalled that the structure , of the 
organisation which  had evolved over the last 25 years , had to be adapted to new developments such 
as the digital development and climate change.  
3.25.   The DG explained that t he Delivery Unit  is working on deliverables for MC12 and was only 
staffed with internal resources , seconde d for this purpose , as well as having  several focal points in 
various divisions.  
3.26.   She said that  the budget by outputs would be looked at after the review and that a strategy 
would be needed.  
3.27.   An Official of the Secretariat explained that the panellist s' budget for the biennium had been 
reduced and that,  if further resources would be needed during the year, funds would be re -allocated. 
She also explained that negative interest was in place in Switzerland since 2015 and was projected 
to continue  for the next three years, at the least. She said it is increasingly difficult to negotiate 
thresholds of zero interest with the banks. She also highlighted that investments in Swiss Francs 
that could potentially generat e positive interest were very risky.  WT/BFA/196  
 
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  3.28.   Responding to a question on the selection process for virtual meeting tools, an Official  of the 
Secretariat explained that there was currently very little competition on the market for platforms 
that offer both interpretation functionalities and high cybe r security features. She added that, given 
the importance of the Public Forum and the Ministerial Conference, the selection process had been 
moved to early 2022  and that the current platforms would be in use until then . 
3.29.   With respect to the question regardi ng a budget cut, an Official of the Secretariat  suggested 
that the surplus of 2020 could possibly  be used to reduce Member contributions for 2022 , as foreseen 
by financial regulation 23 , but that this needed to be analysed within the Secretariat .  
3.30.   A Member  asked if the Appellate Body starts operating again and its activity is not blocked 
anymore in 2022 or in 2023 , where will the funding for it come from. In response, an Official of the 
Secretariat said there is recognition that there may be a possibility o f some appeals process and 
that, were Members to decide to establish one, resources could be reallocated from other areas, 
including along the panellists' budget line, to finance such arbitral processes.  
3.31.   The Chair thank ed Members for their very active part icipation in the discussions in the first 
reading of the budget and for their substantive comments and deliberations on this topic. She added 
that i t was only the first reading today, a start to go into more detailed discussions. She suggest ed 
that the Com mittee  return to more detailed discussions at the C ommittee's meeting on 12 July.  
4  ITC 2022 -2023 BUDGET PROPOSAL – JOB/BFA/52  
4.1.  The ITC Executive Director t hanked the Chair  for having invited  them to the Committee meeting 
and said she was pleased to be back with the CBFA today . She express ed her appreciat ion for  the 
positive comments that Members had made, during the Committee meeting In May,  about the 
mandate, work and results of ITC , as well as  the contribution that ITC make s to the mandate of the 
WTO and to enhancing transparency . She said she  looks forward to further cooperation and the  
synergies between the WTO and ITC . 
4.2.  The Executive Director said Members may  recall that ITC's regular budget is funded in equal 
parts by the WTO and the UN  and, therefore, it is approved by the WTO General Council and the UN 
General Assembly. Prior to their  approval, ITC's proposed programme of work, progress report and 
proposed budget are reviewed by  the CBFA, and, on the UN side, by the Commi ttee for Programme 
and Coordination  (CPC) , the Advisory Committee on Administrative and Budgetary Questions  
(ACABQ)  and the Fifth Committee . She added that, t his month, the ITC had  presented its 2022 
budget proposal to the ACABQ and the CPC for their revie w and that the ITC had  received positive 
feedback and questions . She said t he Fifth Committee will consider the proposed budget  in the Fall 
and the General Assembly is expected to endorse the 2022 budget before the year -end. Based on 
the administrative arr angements, ITC will be guided by the lower approved amount to honour the 
principle of equal share of the two parent organizations.  
4.3.  The Executive Director recall ed that the UN adopted an annual budget cycle, while the WTO 
budget is biennial. During the tran sition period and interim arrangement, the ITC 2022 -2023 budget 
proposal is put forward using twice the WTO contribution for 2022. The UN Secretariat 2023 budget 
level will be determined in the lat ter part of 2022. Therefore, the ITC budget proposal for 20 23 may 
be updated to reflect the UN approved budget level for 2023. Such adjustments, if any, will be 
presented to the WTO in 2022 during the mid -term review.   
4.4.  She presented the budget pro posal of the ITC for the biennium 2022 -2023, contained  in the 
document bearing the reference JOB/BFA/52 . The overall resource requirements amount to 
CHF 72,972,500 , excluding CHF 400,000 miscellaneous income, thus reflecting zero nominal growth 
compared to the 2020 -2021 b udget approved by the WTO . The net contribution of WTO is estimated 
at CHF 36,486,250 .  
4.5.  She pointed out that the ITC 2022 proposed budget in the UN fascicle format is higher than 
the amount in  JOB/BFA/52.  This variance arise s from inflation adjustment  by the UN and , as 
mentioned earlier, ITC is guided by the lower approved amount to honour the principle of equal 
share of the two parent organizations .  WT/BFA/196  
 
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  4.6.  ITC's regular budget resources cover ITC running costs and programme of work  including core 
expertise and d evelopment,  maintenance and expansion of ITC 's intangible assets and global 
offering, programme development, including monitoring and evaluation, and core management and 
country coordination. Detail s of the budget by expenditure class are provided in the S upplementary 
Information.  
4.7.  She added that, w ith the proposed resources , ITC will be able to fully and effectively implement 
its mandate. Its delivery is aligned to 11 sustainable development goals, thus providing a tool to 
measure results and impact.   
4.8.  She stated that ITC fundraises for complementary resources to ITC's regular budget in order 
to increase the envelope available for fulfilling ITC's mandate and responding to demand from ITC's 
developing country Member States. In 2022 ITC will be leveraging its regular budget -base by 
implementing USD $100 million worth of support funded by extra -budgetary contributions. She 
thank ed UN Member states that have supported the ITC  in this regard.  
4.9.  The Executive Director said that the documents submitted to Members  demonstrate how ITC 
performed against the 2020 regular budget  and what it project s its performance will be in 2021 . 
Total 2020 expenditure amounted to 97% of the approved regular budget  and for 2021, 99% budget 
implementation  is expected .  
4.10.   The ITC proposed programme plan for 2022 integrates the lessons learned in 2020 and 
maintains the intervention logic of the previous programme frameworks. It builds on the results and 
impacts that have been achieved and is continuously upgraded to cater to market needs.  ITC 
organized its interventions around three key areas . Firstly, to increase transparency in trade and 
help beneficiaries make informed policy, strategy and business decisions, ITC offers Global Public 
Goods in the form of trade and market intellige nce. The ITC reached 380 ,000 repeat clients , in this 
regard.  Secondly, to enable a more conducive business environment for MSMEs, ITC supported 
Member States ' strategies, regulatory and policy changes in over 120 cases in 2020 and improved 
the effectivenes s and services of business support organizations in over 330 cases.  Thirdly, t o 
increase the value of inclusive and sustainable trade and investment, ITC provided direct technical 
assistance to over 21,000 MSMEs wh ich improved their business operations and  over 18,000 wh ich 
transacted international business in 2020. Many of these MSMEs are women or youth operated and 
have adopted environmentally sustainable practices.   
4.11.   Over 80% of ITC's interventions are targeted to LDCs, land -locked developing countries, 
small-island developing states, small vulnerable economies, conflict -affected countries, and Sub -
Saharan Africa, with over 55% of the country -specific technical assistance targeted to LDCs.  
4.12.   The ITC pays specific attention to women 's economic empowerment, g reen growth, youth and 
trade and to working with Africa to operationalize the African Continental Free Trade Area ( AfCFTA ). 
This is in addition to its value chain work, trade policy and trade facilitation, and its global public 
goods such as the Global Trade Help Desk - a one stop shop for MSMEs to access trade and market 
intelligence.  
4.13.   In 2022  ITC will have achieved several transformative outcome targets by continuing to focus 
on scalability of results, involving thousands of beneficiary MSMEs in priority countries, and 
extending support to policymakers and Trade and Investment Support Institutions from over 
120 Member States. The example in the fascicle shows how ITC will leverage South -South trade and 
investment by catalysing over $200 million of trade and investment in agricultural, light 
manufacturing and services sectors in East Africa by the end of 2022.  ITC will seek to leverage 
partnerships, innovate, and incorporate lessons from evaluations and au dits, to achieve intended 
outcomes effectively and efficiently.  
4.14.   In closing, the Executive Director of ITC emphasize d ITC's commitment to ensuring that trade 
acts as an engine for inclusive growth and sustainable development  and said they will manage the 
resources entrusted to ITC with efficiency and effectiveness to deliver impact and contribute to 
Agenda 2030. She thank ed Members for their  continued support and guidance to ITC and look ed 
forward to positive consideration of the budget.  WT/BFA/196  
 
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  4.15.   Several Members tha nked the ITC Executive Director  for her presentation and said ITC has 
been and remains a privileged and reliable  partner providing extensive capacity building to 
developing countries for the promotion and harnessing of their trade potential.   
4.16.   Many Members cited specific ITC -funded projects in their respective countries and how these 
signif y collaborative  assistance being provided to developing  and least developed countries as well 
as SVEs and SIDS.  They further lauded the benefit of technical assistance act ivities provided by ITC 
with regard to trade investment promotion agency, training of officials in trade and services and in 
trade negotiations.  
4.17.    Members encouraged the WTO to continue supporting the ITC as it embark s on the road of 
recovery from the COVID -19 pandemic. This will enable, in particular, African countries to rebuild  
their production capacities  and their export competitiveness  as well as help  address the p articipation 
of MSMEs in global trade  and make the most of regional markets and value chai ns in li ght of the 
coming into force of the AfCFTA.  
4.18.   A Member said a lot of beneficiaries had expressed their appreciation of ITC's activities and 
added that her delegation sees the compl ementary work by the ITC with the WTO , especially with 
regard to those which help Members to participate in the negotiations and help them to implement 
WTO agreements .  
4.19.   A Member said his delegation appreciates the long -standing cooperation between the WTO 
and the UN for the ITC  on financing , and more important ly bringing it into effect  to support 
entrepreneurs, most of all in developing countries, to benefit from opportunities, embedded in trade 
rules and sometimes , perhaps , hidden in trade rules.  The Member said s uch cooperation is in 
particula r critical between international organizations for major challenges , to control COVID -19 and 
to achieve socioeconomic and green recovery.  
4.20.   The Member requested that the new ITC strategic plan for 2020 -2025 be assessed to see how  
it interf aces, with the budg et proposal and future budget proposals.  
4.21.   A Member thanked donors for provid ing the relevant resources to ITC, thus enabling activities.  
He added that ITC has tangible outcomes in its work in many  countries and  that, in the context of 
the post COVID recove ry, this will be even more important because of the integration of markets in 
Africa.  
4.22.   A Member commend ed ITC for its focus on women empowerment and its contribution to the 
tools and resources that are needed for integrating gender into trade policies at g lobal, regional and 
intermediate levels.  
4.23.   Many Members expressed their support for the  2022-2023 ITC budget proposal as contained 
in the document bearing the reference JOB/BFA/52.  
4.24.   The Chair thanked Members for their comments regarding the ITC budget proposal and  
requested the Executive Director of ITC to come to the next Committee  meeting  to continue with 
the agenda item .  
4.25.    In closing, the Chair thank ed the Interpreters for having stayed beyond the normal time and 
wished Members an  interesting General  Council in the afternoon . She added that a meeting room 
would be reserved for the whole day for the next Committee meeting . 
5  ORAL REPORT FROM THE CHAIR OF THE CBFA ON ONGOING WORK  
5.1.  The Chair said the Working Group on Trust Funds had met several times since the CBFA 
meeting o f 25 May. She said her expectation is that that the working group would  be able to report 
back with a more substantive update of where things stand and , hopefully , some recommendations 
in the meeting of 12 July. She said the Chair of the working group would  be providing further details 
regarding this issue under the next agenda item.  
5.2.  On the issue of the continuity of operations of the WTO , the Chair recall ed the proposal 
submitted by Mexico and the United States involving a revision to Fin ancial Regulation 6. This WT/BFA/196  
 
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  approach would limit the Committee's actions to a revision. The revision would grant permission to 
the DG to request an extension of an expenditure authority as part of the biannual budget process. 
The Chair further recall ed ideas that had been previously discussed in the context of a possible 
revision to Financial Regulation 10. She said these matters had been touched upon in the CBFA 
meeting o f 25 May. She added that she had  also held consultations with interested delegations on 
11 and 14 June  and that she is available to meet with Members to assist in finding a solution going 
forward. However, she propose d to do so only if there is sufficient interest amongst stakeholders in  
this regard  and said her  door remains open.  
5.3.  The Chair said  she had offered delegations the opportunity to meet with her regarding the 
possibility of locking in revisions to financial regulations agreed in 2019 and making a 
recommendation to the General Co uncil to approve them. She said agenda item I, the Secretariat's 
request for endorsement of the revision to Financial Regulations that were agreed in 2019  would , 
hopefully , be supported by the Committee  before the Summer break.  
5.4.  In concluding her update, t he Chair said she  will continue this practice at future meetings.  
6  ORAL REPORT FROM THE CHAIR OF THE WORKING GROUP ON COHERENCE IN THE 
ESTABLISHMENT AND MANAGEMENT OF WTO TRUST FUNDS  
6.1.  The Chair said that there had been three meetings since her last update to  the Committee.  
6.2.  At the meeting on 2 June, the ITTC presented their processes for managing the TA Plan , 
associated sources of funding, activities and monitoring and evaluation. In general, Members view 
this as a good process  and have trust in its integrity and how it works. Importantly , it includes 
consultations with Members, a written plan, oversight from WTO Committees, annual reporting and 
a formal monitoring and evaluation mechanism.  The Chair said the working group also decided to 
move to weekly meeting s in order to advance the work more quickly.  
6.3.  On 8 June the working group  discussed further suggestions for the matrix and continued 
discussions based on guiding questions.  The working g roup also exchanged views on the importance 
of a clear vision for new trust funds and what the appropriate scope of any new trust funds could 
be.  
6.4.  During the 23 June meeting, the working group  looked to pivoting towards finding a way to 
move forward.  While  there is not yet consensus on all points, it is fair to say the working group  
agree s about more than it disagree s. She said that, in advance of the meeting, she had distributed  
a high -level synthesis of what she understand s to be the issues and possible s olutions expressed by 
the working group  during a previous  meeting and that she had subsequently gathered more 
comments. She mentioned that t he working group gave her the  greenlight to begin consultations 
with the ITTC and other Officials  of the Secretariat  to discuss the operability of these ideas and to 
present a proposal based on them. She stated that she would soon  begin these consultations and 
will bring some ideas to the working group at its next meeting.  
6.5.  A Member thanked the Chair of the working group  for her hard work. He stated that the 
discussions in the working group have been really productive and are beginning to bring participants  
back to the kind of conversations that they used t o have before everyone retreated into the Zoom 
land of the pandemic. Noting that he may be putting DDG E llard on the spot , the Member said he 
hopes the management of the Secretariat  can cooperate with Members  and meet them in the middle 
in terms of discussing the changes that Members are exploring  with respect to the management of 
trust funds and the creation  of new ones .  
6.6.  The Member said his delegation is  a little concerned about repeating practices that it has  been 
very forceful about in this Committee . He said,  over many years , Members  have recei ved assurances 
that the said practices  would not happen again and yet they continue to happen . He said that he 
wants to continue to have value in the small group process but is a bit concerned that there would 
be no point without b uy-in from the management  of the Secretariat. He asked that the management 
of the Secretariat and the Committee work a bit more closely together to make sure that 
management assurance is gained to the effect that Members  are not working and that their views 
can be put through a pr ocess and understood and reflected upon before more decisions are taken.  WT/BFA/196  
 
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  6.7.  DDG Ellard thanked the Member  for the comment. She also thanked the Chair of the working 
group for her very productive report as well , saying that it  creates a good space for discussion of all 
of the  issues  at hand . 
6.8.  DDG Ellard said, from the perspective of management , there is a tremendous amount of 
interest in taking the views of all parties into account . She said she understand s the comments made 
by each Member and that views expressed by every Member should be taken into account with 
respect to the creation of trust funds , how such trust funds are executed and what kind of oversight 
there is over trust funds.  She noted that, in internal meetings shortly before the Committee meeting , 
the topic of trust funds w as discussed and that such discussions will continue .  
7  REPORT FROM THE OFFI CE OF INTERNAL OVERSIGHT (OIO) – WT/BFA/W/557  
7.1.  The Head of the Office of Internal Oversight (OIO) presented a summary of the activities 
conducted by the OIO between July 2020 and May 2021 and highlighted the priorities for the coming 
year. 
7.2.  As required by th e Institute of Internal Auditors, he confirmed the organizational independence 
of the OIO and provided an update on the OIO's budget and resources.  
7.3.  The Head of the OIO recalled that his five -year contract ends in September 2021. He explained 
that the proc ess for recruiting the new Head was initiated in April and is ongoing. The new Head is 
expected to assume his or her functions in October 2021.  
7.4.  The Head of the OIO provided a detailed account of the activities conducted by the OIO since 
July 2020, which w ere grouped into four pillars: (1) Promote high standards of ethical behaviour; 
(2) Assess the quality of the Internal Oversight function; (3) Conduct administrative investigations; 
and (4) Conduct internal audits and provide support to stakeholders.  
7.5.  He then detailed the priorities of the OIO for 2021 -2022, which include: (1) Review the Internal 
Oversight Charter (to be submitted to the CBFA for approval); (2) Conduct an External Quality 
Assessment of the OIO's investigation and internal audit functions; ( 3) Continue organizing outreach 
activities to promote a culture of integrity and ethical behavio ur at the WTO; (4) Conduct 
administrative investigations; and (5) Complete the assignments included in the internal audit plan 
for 2021 -2022 and continue provid ing support to management and staff, as needed.  
7.6.  A Member thanked the Head of the OIO for the work done in the past years, the support 
provided to Members and the statistics on the trend in reports of misconduct (intakes). He expressed 
his support in engag ing an external third party to conduct a quality assessment of the OIO's work, 
indicating that it was a required and necessary tool for addressing any gaps. The Member also 
acknowledged the continued involvement of the OIO in promoting ethical conduct. The  Member 
further stated his delegation's support for the creation of a dedicated Ethics Officer  function . The 
Member requested that his complete statement be attached to this report.  
7.7.  A Member said his delegation appreciates the priority given by the Secret ariat to Ethics, and 
the OIO's involvement , not only in promoting curative measures but also in implementing preventive 
controls. While recognizing the need to continue ensuring the OIO's independence, the Member 
encouraged the OIO to continue working with  the Secretariat in preventing misconduct and 
promoting proper conduct. The Member asked to what extent the WTO was equipped to enforce and 
monitor compliance with the ethical standards of its external partners, in particular consultants and 
subcontractors . 
7.8.  The Head of the OIO thanked Members for their continued support. He indicated that the WTO 
is currently taking active steps to have a dedicated Ethics Officer, who would be responsible for 
promoting ethical standards, without jeopardizing the OIO's indep endence from management.  
7.9.  The Head of the OIO explained that one of the areas of partial compliance identified in the 
OIO's quality self -assessment was related to external parties. The OIO will work with the Office of 
the Legal Counsel to the Administratio n, and other relevant Divisions, to ensure that appropriate 
clauses concerning investigations, audits, and ethics are included in contracts and agreements with 
external parties.   WT/BFA/196  
 
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  7.10.   Addressing the Secretariat, a Member asked how it planned to address potenti al misconduct 
of subcontractors or other third parties. The Member clarified he had no indication that this was 
occurring at the WTO but pointed out that this was precisely why it should be addressed.  
7.11.   The DDG thanked the Member for his comment s and agreed with the need for accountability , 
not just within the Secretariat , but also with external partners. She highlighted the importance of 
having a system in place to address any issues before questions are raised.   
7.12.   The Committee took note of the report.  
8  REQUE ST FOR THE EN DORSEMENT OF THE FINANCIAL REGULATIONS WHOSE REVSION 
WAS AGREED IN 2019 – WT/BFA/W/559  
8.1.  The Chair introduced the agenda item by stating that the document that had been sent to 
Members contains a request by the Secretariat for the endorsement of  the revised text for  Financial 
Regulations 4, 17, 26, 27, 29, 37, 38 and 42 , which had been agreed in 2019. The document 
envisions that a complete set of the revised financial regulations would be submitted to the CBFA at 
its meeting on 12 July and subseq uently be tabled for approval by the General Council on 6 and 
7 October. Referring to paragraph 2.7  of the paper , the Chair said the Secretariat further proposes 
continuing discussion s on Financial Regulations 19 and 23. In addition, s he drew Members'  attention 
to an additional document that was circulated on 28 June , reflect ing the changes.  
8.2.  An Official of the Secretariat said revisions had first been proposed to the Committee in 
March  2019 and deliberations had paused  since November 2019 . She added that the eight financial 
regulations tabled for endorsement had been agreed upon by the Committee in April and June 2019.  
8.3.  The first revision  is a change  of the frequency of review of the fin ancial regulations from four 
years to five years , under Financial Regulation 4 .  
8.4.  The last sentence in  Financial Regulation 17  has been deleted because it is not always  the case  
that there would be a Surplus Account. In fact , the WTO currently has  a financi al deficit.  
8.5.  Financial Regulation 26  foresees recommendations be ing made to the General Council but 
missed the step of such recommendation s being assessed by the CBFA , which would in turn make a 
recommendation to the General Council.  
8.6.  Financial Regulation 27 (a) was edited for better reading and a new Financial Regulation 27 (b) 
was added to  foresee the process for proposing a replenishment of  the Working Capital Fund if 
resources therein contained had been  used for other extraordinary means determined by the General 
Council.  
8.7.  Changes to  Financial Regulation 29  were mostly editorial . More importantly, the  financial 
regulation in force foresee s a scenario whe re a Member might withdraw from the organization . 
However, a Member would  be entitled to draw -down whatever money is attributable to it from the 
Working Capital Fund. The revisions  recognize that there are liabilities that would also be attributable 
to the Member and that these should be offset against the  money in the Working Capital fund 
pertaining to the departing Member.  
8.8.  Financial Regulation 37 reduces the frequency of reporting according to Output Chapters from 
quarterly to at mid -year and as part of the annual financial performance report.  
8.9.  Financial Regulation 38 (e) extend s the scope of controls from just "financial controls"  to all 
forms of internal c ontrols  and Financial Regulation 38 (f) recognizes the existence of internal 
oversight  functions  in the organization encompassing examination, internal a udit and investigation.  
8.10.   Financial Regulation 42  ensures that any exercis ing of the departure from normal  procurement 
processes,  as foreseen by this financial regulation , be expressly included in a report  to Members .  
8.11.   A Member informed the Committee that hi s delegation will be proposing a n amend ed text for 
Financial Regulation 19 , at the CBFA meeting on 12 July.  He said the revised proposal  would present 
a compromise and does not significantly alter the way in which the trust fund approval process WT/BFA/196  
 
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  currently takes place. He added that it is  aimed at improving transparency , which is  something that 
the CBFA has been focused on for the past couple of y ears. He said his delegation hopes that other 
delegations will see this point  of view  and remain constructive during the discussions on the proposed 
amend ments .  
8.12.   The Member asked the Chair what process she would like to follow to facilitat e discussions on 
the amend ed proposal and added that that clarity would  help his delegation take a decision on how 
to move forward on the Chair's propos al for the endorsement of the financial regulations at the next 
CBFA meeting.  
8.13.   The Chair t hanked the Member for his deleg ation's spirit of compromise.  
8.14.   A Member thanked the Secretariat for bringing this topic back again , adding that the revision 
of financial regulations  is regular work that the Committee should do once every four years  according 
to the existing regulations . She said that, for many years, the Committee ha d submitted revisions 
for approval by  the General Council and proposed changes that had not garnered full agreement by 
the Committee had remained unchanged . The Member added that, whilst recognizing that there 
could be different views on the regulations, a package approach would  not be helpful for such kind 
of exercise , as it is a regular practice. She further expressed concern that, for the  next revision , 
some Members could hesitate to agree on which regulation  should be chosen for revision because 
they would be  afraid that , if there is no consensus on one regulation, then nothing could be done on 
the complete text of the fina ncial regulations.   
8.15.   The Member said that in 2 019 there were two articles  that had not gotten consensus in th e 
Committee  – Financial Regulations  19 and 23. At the time, her delegation had some concerns on 
Financial Regulation  23 but then , after further assessment , had indicated in the last meeting of the 
Committee in 2019 that , as the Commit tee agreed to submit the revised and agreed regulations to 
the General Council, her delegation would be in the position to show flexibility on Financial 
Regulation  23. She added that her delegation 's position remains unchanged . 
8.16.   A Member said his delegation  appreciate s the request for  clarity on a pathway forward . He 
offered for his delegation to meet with the other delegation that had had a differ ing view on Financial 
Regulation 23 from that of his delegation. He said the two delegations' views on Financial  
Regulation  23 were not far apart and that the Committee had simply run  out of time in 2019. He 
offered that the two delegations  try and resolve this and added that his delegation would be 
interested in participating in the process pertaining to the suggested amendment of Financial 
Regulation 19.  
8.17.   A Member said her delegation fully support s the approval of the already agreed revised text 
of the eight financial regulations . She added that she underst ands the concerns  raised by the other 
delegations that had spoken before her and said Financial Regulations 19 and 23 will continue to be 
discussed.  
8.18.   A Member said that his delegation had not referred to any package or tying up of Financial 
Regulation 19 or any other pending financial regulations with those that  had been agreed. He clarified  
what his delegation is seeking is a clear path forward on discussions regarding Financial Regulation 
19 and , as ment ioned by another delegation,  Financial Regulation 23. He said his delegation further 
understands that a  few more financial regulations would be looked at this year , citing Financial 
Regulations  6 and 10. He asked how the Chair intend s to take this forward.   
8.19.   The Chair thanked the Member for the clarification.  She proposed that Members further 
discuss the proposal regarding Financial Regulation 19 and  Financial Regulation 23 very soon and , 
if necessary , also  after the Summer break. The Chair said her i ntentio n is to use the format of the 
CBFA, either in informal mode or formal mode. Expressing hope that this approach  would 
accommodate the wishes of delegations, the Chair said if any delegations wish to hold bilateral 
discussions, as had been suggested by a Member with regards to Financial Regulation 23 , her request 
would be for the concerned Members to give her a signal for when to f eed the outcome into the 
official process.  
8.20.   The Chair proposed that the C ommittee take note of the comments made and for the topic to 
be return ed to at the CBFA meeting on 12 July.  WT/BFA/196  
 
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  9  REIMBURSEMENT OF US TAXES – REQUESTED BY CHINA  
9.1.  The Chair recall ed that there had been a brief exchange of this matter at the previous meeting 
of the Committee. She added that, at the time , China posed several questions and the Secretariat 
indicated that it would prepare a separate note to respond to these questions.   
9.2.  The Chair said the Secretariat had further noted that the External Auditor s had been requested 
to look into the matter. Initially , the Secretariat's expectation was that this work would have been 
completed by June.  
9.3.  The Chair said she would like to give the floor to an Official of the Secretariat  for a short 
statement to ensure transparency , followed by China . 
9.4.  An Official of the Secretariat said the External A uditors have finished the audit of the 2020 
financial statements and have made an observation regarding the topic. She said that, due to this 
audit having been conducted remotely, and the complications related to such an approach, it had 
not been possible for the External Auditors' to complete their report in time for the current 
Committee meeting.  
9.5.  The Official of the Secretariat said that as indicated in previous Committee meetings, the 
Secretariat ought not pre-empt the perspective of a third party. In this regard, she request ed that 
the Committee  wait for the meeting on 12 July  when the External Auditors would be presenting their 
report.  Regarding a document from the Secretariat , the Official said that considering the recent 
change of  leadership , it is appropriate that the new DDG be given time to consider this topic 
extensively .  
9.6.  The Official of the Secretariat said they had taken note of the comments from China in previous 
meetings and would respond to the delegation's request. She added that there is no intention to 
avoid th e question or create opacity but rather to wait until  the appropriate time  to submit a paper 
together with the External Auditor's recommendation on the same topic, ahead of the meeting of 
12 July. She concluded that  it is better to provide that clarity to Members in writing when such clarity 
has been reached .  
9.7.  The delegate from China t hanked the Secretariat for the update. She said that this issue has 
been there for  a very long time  and that,  for years, this issue had been raised by the External 
Auditor s. She said  her delegation  had also raised this issue alm ost every year  when the expenditure 
report and the budget were presented to the Committee .  
9.8.  She said, u nfortunately, there had not been any  feedback on this issue and this Committee 
had never had discussions on it. So that is why her delegation  requested t o have this item on the 
agenda in the last meeting and also raise d those specific questions for the Secretariat to consider. 
She said, as indicated in the last meeting, her delegation is just asking for a factual information 
paper to explaining why the sai d issue occurs. She said she does not think it is so difficult for the 
Secretariat to prepare such an information paper because it is just a factual one. She said, o f course, 
in the next step s after information was received on exactly what happened  and why it happened , 
there could be further discussion on whether this can be  address ed and how to address it. She said 
her delegation is  a little disappointed that it had  not heard anything from the Secretariat after the 
last meeting . She said it is for this reason that her delegation  propos ed to have this item on the 
agenda again as the Airgram for the Committee meeting  had not contained  the item . 
9.9.  In conclusion, the Member said her delegation's purpose for this is just to have an updat e on 
the work by the Sec retariat, since her delegation had  raised so many factual questions in the last 
meeting. She acknowledged what had been said by the Official of the Secretariat and said she  
appreciate s that the Secretariat has already started to the work on this and ha d requested the 
External Auditors to look at this issue. She expressed hope to have a look at the factual paper as 
early as possible.  
9.10.   The Chair said she had already  noted,  at the previous meeting of the CBFA, that this is a 
complex issue with legal implicatio ns. She said it will be helpful , therefore , to receive an impartial 
point of view from the External Auditor s by the Committee meeting of 12 July . In addition , the 
Secretariat will prepare a note for consideration by Members at the same meeting.  WT/BFA/196  
 
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  10  STATUS REP ORT ON THE LDCS TRUST FUND FOR PARTICIPANTS IN MINISTERIAL 
CONFERENCES – WT/BFA/W/558  
10.1.   An Official of the Secretariat updated the Committee on the status of the MC12 LDC trust 
fund. He indicated that , with further refined assumptions and additional pledges,  the situation has 
improved from a red light to a yellow light. That means that there is still an anticipated gap and 
additional contributions will be necessary to fund a physical meeting. However, that funding gap is 
more modest than initially reported.  
10.2.   Currently, he estimated that an additional CHF 100,000 could bridge the gap if all formal and 
informal pledges are honoured. He invited additional Members to make contributions to the fund 
before Autumn.  
10.3.   A Member asked what happens to unused contributions in the event of the Ministerial not 
being held as planned. The Official of the Secretariat indicated that such conditions were governed 
by the individual contribution agreements. As ministerial  conferences  are recurring events , many 
Members accept to roll over any remaining balance to the next one. Otherwise, it is a simple 
procedure to reimburse contributions and this is done periodically , as well , upon the request of 
specific Members .  
11  CONCLUDING REMARKS  
11.1.   The Chair thanked Members for their participation i n the meeting and said she had really 
enjoy ed seeing so many of her colleagues in person. She expressed the hope that the Committee 
can continue meeting in person.  
11.2.   Before closing the meeting, the Chair informed the Committee that t he next formal meeting 
of the CBFA is scheduled to take place on 12 July. She said she  hoped to see Members then, in good 
health.  
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