RESTRICTED  
  
WT/BFA/188  
 
7 October 2020  
(20-6867) Page: 1/14 
Committee on Budget, Finance and Administration    
 
 
REPORT OF THE MEETING HELD ON 17 SEPTEMBER  2020 
 
The Committee on Budget, Finance and Administration (CBFA) met on 17 September. His Excellency 
Ambassador Manuel Teehankee  (Permanent Representative of Philippines  to the WTO ), welcomed 
Members . 
 
In view of the number of agenda items, the Chairman requested Members to make every effort to 
not take the floor  for too long during their interventions.  
 
DDG Brauner  explained that the air condition ing in the room had just been restart ed. He further 
informed the Members that the main cafeteria had resumed operations and invited them to use its 
services.  
 
The Chairman presented t he agenda , with the reference WTO/AIR/BFA/3 9 and cited the annotated 
agenda, bearing reference, JOB/BFA /45.  
 
The following item was proposed for "Other Business": A brief statement on the Interprefy Platform.  
 
A Member repeated a request made in earlier meetings that a full day be dedicated to CBFA 
meetings . He said that given the volume and importance of the subjects to be discussed, a 
methodical manner  is recommended so that the Secretariat can respond to ques tions. Several 
Members supported this suggestion.  
 
The Chairman noted the comments.  
 
The agenda, with the item under "Other Business" was adopted .  
 
1   WORLD TRADE ORGANIZATION 2019 FINANCIAL PERFORMANCE REPORT  – 
WT/BFA/W/ 527 
1.1.  The Chairman introduced the to pic by stating that Agenda items A and B are interrelated. He 
then welcomed the External Auditors, Mr. Michael Beyme and Mr. Bernard Holstein, to the meeting. 
The Chairman said that the Secretariat would first introduce the WTO 2019 Financial Performance 
Report followed immediately by a statement by the External Auditors pertaining to the External 
Auditors ' Report.   
1.2.  In presenting the budget part of the 2019 Financial Performance Report, an Official of the 
Secretariat noted that 99% of the income of the WTO was constituted of Member  contributions and 
1% from miscellaneous income. At the end of 2019, miscellaneous incom e received surpassed the 
projected amount by CHF 3.6 million mainly due to the release of the accumulated balance of  
CHF 3.3 million from the Appellate Body Operating Fund and the release of provision s approximating 
CHF 0.3 million .  
1.3.  The receipts under "Other" mainly comprise of  reimbursements from the loss of earnings 
insurance for staff on long -term sick leave and the contribution to the administrative costs of the 
WTO, from the EIF.  
1.4.  The Official of the Secretariat further stated that the overall expendi ture rate for 201 9 was 
99.1% of the budget. The budgetary savings were mainly from staffing resources, with a 
compensatory effect between underspend on staff expenditure and overspend on temporary WT/BFA/188  
 
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  assistance. Budgetary savings were also realized from gener al services, travel & hospitality and 
capital expenditure. The budget for financial expenditure was exceeded due to the extent of negative 
interest charged by banks, whereas the overspend of the implementing partners was due to more 
than estimated sessions  at the ILO Administrative Tribunal.  
1.5.  Another Official of the Secretariat took the floor to comment on the trust funds situation. With 
regards to the Global Trust Fund, he stated that contributions have been generally declining whilst 
expenditure remained stable and welcomed Member s' input and contributions to ensure the flagship 
fund continues to provide technical assistance. He added that the financial situation for the other 
trust funds is relatively stable. The Official of the Secretariat acknowledged Member s' interest in 
trust funds coherence and noted that the Secretariat is looking forward to continuing the discussions 
with the Member s on the topic.  
1.6.  The Official of the Secretariat further stated that two of the trust funds  were closed as of  the 
end of 2019: Data Set on Trade in Services by Sector ; and Mode of Supply .  
1.7.  Another Official of the Secretariat acknowledged the external auditors' presence, thanked them 
for their cooperation and insightful recommendations and noted that 2019 was the last year of their 
audit mandate.  
1.8.  The Official of the Secretariat  presented the financial statements for 2019, focu sing on the 
Statement of Financial Position, the Statement of Financial Performance and the Statement of 
Changes in Equity . Noting that the overall budgetary savings for 2019 were CHF  5 million, she 
emphasized that this is only a budgetary result and that,  after taking elements mandated by IPSAS 
such as depreciation, actuarial costs of After Service Health Insurance and pension into account, the 
financial result for 2019 was a deficit of CHF 31.2 million. The official of the Secretariat further 
explained th e growth of assets as mainly being driven by the growth in the pension assets as a result 
of positive market returns and change in discount rate from 2% to 1.8%. She added th at the  
significant growth  in liabilities is mainly driven by the benefits projecte d for the long-term in 
compliance with  IPSAS accounting treatment.  
2  REPORT OF THE INDEPENDENT EXTERNAL AUDITOR ON THE AUDIT OF THE FINANCIAL 
STATEMENTS OF THE WORLD TRADE ORGANIZATION FOR 2019  – WT/BFA/W/531  
2.1.  The Chairman invited the External Auditors to tak e the floor to present their report.  
2.2.  Mr Bernard Holstein, a representative of the External Auditors,  presented the essence of the 
External Auditors' Report on the 2019 Financial Statements of  the WTO. He started by explaining 
the exceptional circumstances surrounding the audit , during the course of 2020,  which resulted in a 
fully remote audit being performed.  
2.3.  Mr, Holstein noted that t he audit was carried out in accordance with the Financial Regulations  
of the WTO and in conformity with International Standards on Auditing (ISAs) as adopted and 
amended by the International Organization of Supreme Audit Institutions (INTOSAI) and issued as 
International Standards for Supreme Audit Institutions (ISSAIs) . 
2.4.  Mr. Holstein's co mments covered the financial audit in general, the audit scope and the audit 
approach  and informed the Committee that, from the External Auditors' assessment, the  financial 
statements of the WTO and those of the WTO  Pension Plan fairly presented  the financ ial position as 
at the end of 2019 and complied with IPSAS .  
2.5.  Mr. Beyme , the Audit Manager,  said the financial statements of the WTO reflect accruals and 
provisions as at 31  December 2019. He said that the External Auditor s recommend that the WTO 
regularly revise its potential risks related to disability cases in order to implement effective mitigation 
measures. Further, Mr Beyme recommended that WTO optimize the presentation of the provisions 
by a separate note to explain the main risks in a g rouped manner and to state applicable details 
clearly and transparently.  
2.6.  With regards to reserves, he stated the D oha Development Agenda Global Trust Fund reserves 
of CHF 1 million ha ve never been used in 18 years and recommended that the WTO suggest to the 
CBFA the drawdown of this reserve and reallocation of funds internally.  WT/BFA/188  
 
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  2.7.  He added  that the Secretariat had agreed to all the recommendations relating to the financial 
audit.  
2.8.  Mr. Beyme then highlighted the key points from the performance  audits of human resources, 
trust fund activities and expenditures relating to the Appellate Body.   
2.9.  Mr Beyme clarified that the human resources performance audit  focused on separatio ns, 
including early retirement , and the recruitment of individual consult ants. With regards to the 
separation s' process, he recommended that the WTO enter into a separate arrangement with WTOPP 
regarding compensation payments for early retirement  to determine an a ppropriate  and clear 
calculation as well as an applicable procedure including timelines and documentation.  
2.10.   With regards to the recruitment of individual consultants, Mr Beyme recommended that the 
WTO finish the implement ation of  new guidelines for the recruitment of in dividual consultants as 
soon as possible to ensure similar regulations and compliance for all services provided from 
consultants as well as to determine an appropriate segregation of duties and delegated authorities 
in the process.  Mr Beyme acknowledged th at a current draft of the new guidelines has been recently 
prepared and is under review by the various divisions.  He reiterated that the WTO should ensure a 
competitive and transparent process , particularly where consultants are close relatives of WTO staf f 
member s and that in such cases, final decisions should be taken by the Director -General or the 
Deputy Director -General responsible for human resources . 
2.11.   For the trust funds ' performance audit, Mr Beyme recommended that the WTO critically review 
its trust fund landscape  and develop a strategy to close trust funds which had no  activity in 2019 as 
well as merge those  with similar purposes and donor structure. Further more, Mr Beyme  
recommend ed that the WTO implement an effective monitoring of all multiyear vol untary 
contributions to ensure a correct recording in line with  IPSAS 23, starting in 2020. Other 
recommendations on trust funds included the harmoniz ation and complian ce of the  procurement 
process es for higher amounts and the assessment and of all tempora ry contracts under the  L-posts 
category  in order to implement an  effective monitoring and sustainable strategy .  
2.12.   For the expenditures pertaining to  the Appellate Body, Mr Beyme noted , based on detailed 
settlements reviewed , that the WTO had correctly calculated and paid Appellate Body Members ' daily 
fees, travel costs and subsistence allowances. He added that a precise benchmarking  with other 
similar bodies  was not possible as  the remuneration package does not include any entitlement for 
pension or other allowances paid by comparable organizations.  Mr Beyme further noted that a  daily 
fee is more common for consultants and could  affect  the independence Appellate Body Member s. 
Mr Beyme's final remark on the Appellate Body was to note that  the WTO has taken steps to retain  
the knowledge of experienced staff member s which may enable a quick restart of t he body . 
2.13.   In summarizing, Mr. Beyme said that the WTO Secretariat would consider the 
recommendations and come up with appropriate proposals for imple mentation or responses.  
2.14.   Mr Beyme continued by saying that  the External Auditor s had also audited the 2019 Financial 
Statements of the WTO Pension Plan and had concluded that they fairly presented the financial 
position. In view of this, the Auditors gave the WTO Pension Plan financial statements an unqualified 
opinion.  
2.15.   Mr. Holstein  took the floor saying that the most important result for the Member s and for the 
Secretariat was that the audit  had not revealed any significant weaknesses or errors, which the  
External Auditor s considered as being material to the accuracy, completeness, and validity of the 
financial statements of the WTO. Therefore, the Auditors placed an unqualified audit opinion on the 
WTO's Financial Statements for 2019.   
2.16.   Mr. Holstein summar ized that over the 6 years of their mandate , from 2014 and 2019, 5 audit 
opinions were unqualified with only one opinion with reservation issued in 2014 for the non -
consolidation of the ITC. In total, there were 31 recommendations on the financial audit an d 
66 recommendation s relating to performance audit s. Mr. Holstein concluded  by express ing gratitude 
to the Director -General and all the staff of the WTO Secretariat and the Secretariat of the WTO 
Pension Plan for their cooperative and responsive attitude over their mandate of 6 years, their kind 
and expert assistance and for the facilities that had been made  available to the Auditors . WT/BFA/188  
 
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  2.17.   The Chairman invited Members to pose questions  and make comments. He requested 
Members to indicate, when interveni ng, whether their questions are directed to a particular topic or 
to the External Auditors or to the Secretariat.  
2.18.   A Member stated that he had intended to take the floor on a  procedural question. He said that 
he had  prepared for the meeting based on the ag enda and the annotated agenda, which separated 
Agenda Items A and B, as distinct agenda items. He said that it would be difficult for him to determine 
how to, on the fly , raise all the issues in one fell swoop with all of the people that  had presented on 
Agenda Items A and B.  He recommended that if, in  the future, items  are to be combined , the agenda 
should reflect that so that delegates can prepare as in the current circumstances he had not  prepare d 
to do a group discussion. He added that i t was hard enou gh to prepare intervention s for 83 pages 
but now the implication was that a total of 165 pages would have to be commented on  in one  go. 
He noted that there were only two hours left for the meeting and expressed concern that this time 
may be insufficient.   
2.19.   The Chairman stated that, for the purposes of convenience and for purposes of the External 
Auditor dialling in from  New York, comments could be divide d, with the comments relating to 
Agenda  Item B being taken first and addressed to the  External Auditor s.  
2.20.   The Chairman invited Members to take the floor regarding the External Auditors' Report.   
2.21.   A Member  thanked the External Auditor s for their report and noted the unqualified audit 
opinion placed by the External Auditor  on the WTO Financia l Statements for 2019. He suggested 
additional clarifications to be made around the recommendations on the high outstanding 
contributions, consultants, procurement, fraud occurrences and trust fund management.  
2.22.   Another Member  echoed the request of additiona l clarification on the trust funds landscape 
and the steps taken to address its coherence and effectiveness.  
2.23.   A Member  requested clarification on how the conflict of interest risk is mitigated in the 
recruitment of consultants. One other concern raised by the Member  was around the trust fund 
management, requesting the External Auditor s to comment on the consolidation of the trust funds. 
Particularly using the example of the Natural Disaster Trust Fund, which had a specific objective and  
was funded by one Member, the Member  inquired if its activities  could have been managed under  
an existing trust fund.   
2.24.   A Member  made observations and asked for clarifications on the following topics: the need 
for the examination and reform of trust  fund management , specifically the review of its landscape, 
the monitoring and adherence to procurement policies, the cross -divisional distribution of 
management and the over -reliance on short-term L positions; and the lack of a standard recruitment 
process for consultants . Additionally, the Member  expressed concerns over the Appellate Body 
performance audit explaining the expectation of a performance cost analysis which takes into 
consideration the Member s' inputs and assess es the appropriateness of the declared fees and 
expenses. The Member noted that the External Auditors relied on previous information from the 
Office of Internal Oversight  and he asked the Auditors to undertake their own review of the propriety 
of the fees and expenses claimed by AB members.  He underscor ed that his delegation sought an 
assessment of the appropriateness of the declared fees and expenses, not just a review of the WTO’s 
procedures for processing claims. The Member  also raised concerns around the overspending on 
Temporary Assistance and Short -term Staff as well as requesting an update on the case of fraud 
detected in 2017 including the measures implemented as a result.  
2.25.   A Member raised concerns around the proliferation of trust funds and agreed with the External 
Auditor 's recommendation s on th e topic .  
2.26.   Regarding the management of contribution in arrears, one Member  requested that the 
External Auditor s to provide further detail for the basis of the recommendation.  
2.27.   An Official of the Secretariat took the floor to provide an update on the 2017 cas e of suspected 
fraud. He explained that a first investigation had been  appealed , which warranted a second 
investigation being conducted . The second investigation concluded that no fraud had occurred. 
Before leaving, the Director General confirmed the sanct ion for misconduct to be implemented.  WT/BFA/188  
 
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  2.28.   Mr Beyme explained that the large number  of trust funds led to one of the performance audits 
being around the trust funds. In 2019, the focus was on the procurement, which is not harmonized, 
hence the recommendation. Additionally, Mr Beyme pointed out an inherent lack of segregation of 
duties when the selection and managing of a contract is done by one party. Mr Beyme concluded 
that the performance audits lead to recommendations for efficiency, which are not mandatory in 
nature and confirmed no fraud or misconduct was identified.  
2.29.   For the Appellate Body, Mr Beyme noted the performance audit  was added at the end of May 
and given the restrictions COVID  19, the audit was limited to expenditure. The audit did not result 
in instances of  non-compliance with the WTO's rules and regulations.  
2.30.   For the administrative measures concerns, Mr Beyme explained that the audit team check ed 
the measures taken for contribution s in arrears. He said the recommendation was included as 
payment plans agreed with Member s that have contribution in arrears take too long and there are 
instances where Member s are required to pay less towards their arrears per year than their annual 
contributions.  
2.31.   Answering to th e consultant recruitment policies, an Official of the Secretariat, explained that 
the Secretariat takes recommendations seriously and as a result, guidelines have been issued to 
address topics such as family relationships. He further added that similarly t o other international 
organizations, the hiring of a spouse of a staff member is  allowed under certain conditions , such as 
having a rigorous selection process in place  and no supervisory relationship between husband and 
wife.  The Official of the Secretari at also clarified that in the case identified by the External Auditors, 
the consultant's husband was not a member of the WTO Secretariat but rather of the EIF, an entity 
which is housed in the WTO premises but which is not part of the Secretariat.   
2.32.   The Cha irman invited DDG Brauner to take the floor.  
2.33.   DDG Brauner expressed gratitude for the collaboration with the External Auditor s, a 
relationship that has developed over the 6 -year mandate to a partnership in a common goal for 
becoming more efficient and effective. He acknowledged that there are improvements to be made 
and reiterated the Secretariat's commitment to address the remaining recommendations.  
2.34.   A Member  requested a follow up clarification on the consulting guidelines as to how broadly 
were these d istributed and whether the trust funds would be included. Another Member  requested 
specific clarification whether the EIF would be included in the distribution list.  
2.35.   An Official of the Secretariat explained that anyone that has the authority to issue cons ultant 
contracts has received the guidelines , including the trust funds.  
2.36.   A Member  requested the Secretariat to assess  the independence of funds such as the EIF and 
STDF, given their physical presence in the building.  
2.37.   A Member thanked the Secretariat for p resenting the 2019 Financial Performance Report and 
raised the following points: suggested that the ITC contribution of approximately 9% of total the 
WTO budget should be shown on a separate line given its significance; requested clarification on 
whether t he non -paid bonuses have been released to miscellaneous income; requested breakdown 
of full travel expenditure for technical assistance and non -technical assistance purposes; requested 
further detail on the implementation partners' expenses and challenged the classification of 
outsourced IT project under this line as opposed to the IT budget; requested explanation on the 
increase of expenditure for the Building Renovation Fund; and requested further details on the 
overspend of short -term staff for the Appel late Body Secretariat.  He further added that the assessed 
contribution due from his country for 2019 has been fully paid.   
2.38.   With regards to staffing resources, the Member raised the question on the reason behind the 
overspend on Short -term and Other Staff expenditure and requested details on the number of interns 
employed by the Secretariat broken down by extra -budgetary and regular budget.  
2.39.   Responding to a Member's questions, an Official of the Secretariat commented that the non -
paid bonuses pertaining to 2 013 were released to miscellaneous income through the refund under 
prior year expenditure. With regards to the increased expenditure pertaining to implementing WT/BFA/188  
 
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  partners, she noted that the increase relates to a provision for two ILO sessions and a provisio n for 
legal damages. Answering to the question regarding the Appellate Body Secretariat's overspend on 
short-term staff, she explained that the additional expenditure resulted from separation of some 
staff and the need to replace them.  
2.40.   DDG Brauner made two  additional remarks. Regarding the budget, DDG Brauner explained 
this must be honest and clear, reflecting the expected expenditure and acknowledged that there is 
room for improvement on some of the budget lines. Specifically, on the Building Renovation Fu nd 
expenditure increase, DDG Brauner explained that the fund was established in close collaboration 
with FIPOI and the estimated need over 10 years was CHF 25 million whereas the annual 
contributions through the budget were CHF 600,000.  He added that the g uidelines for the Building 
Renovation Fund allow for transfer of funds from other budget lines to the Building Renovation Fund.  
2.41.   A Member reiterated the concern of the short -term staff over -expenditure seen as a structural 
phenomenon and requested further explanations from the Secretariat. He further noted his 
appreciation for the recent human resources training, specifically the Respect & Harmony webcast, 
together with the continued work on gender equality.  
2.42.   DDG Brauner provided explanations on the overspe nd of short -term staff and the savings on 
regular staff. He explained the successional vacancy that WTO has in place with vacancies being first 
offered internally which results in a slow process and the need for hiring short -term staff.  
2.43.   Another Official of  the Secretariat confirmed the current hiring policy as explained by 
DDG Brauner results in a prolonged time with regular staff vacancies unfilled. He further noted that 
for short -term staff, there is a robust selection process in place with a panel compos ed of the 
4 DDGs, the Chief of Staff, the Director of Human Resources and the Director of the Administration 
and General Services Division scrutinizing each request for short -term staff made by Divisions.  
2.44.   A Member acknowledged and thanked the Secretariat for the additional clarifications on short -
term staff. He however suggested that the budget line could reflect the realistic expenditure.  
2.45.   The Chairman noted that one of the areas of budget review and strategic planning will focus 
on how past performance re sults in forward budget planning.  
2.46.   A Member reiterated her delegation's concern over the negative interest and required further 
explanations from the Secretariat on the plan to mitigate the risk.  
2.47.   Answering to the question surrounding the negative interest, an Official of the Secretariat 
responded that the negative interest amounted to CHF 542,000 in 2019 successfully reduced by a 
positive interest of CHF 295,000 resulting from investments in money market funds and 
USD holdings, which were made during the yea r. She concluded that the negative interest in 2019 
resulted in a net balance CHF 247,000 . 
2.48.   The Chairman read out the recommendation to be made to the General Council, which the 
Committee endorsed.  
2.49.   The Committee recommends that the General Council approve the transfers 
between budgetary sections as outlined in paragraph 2.34 of document WT/BFA/W/527. 
The Committee further recommends that the General Council approve the WTO Audited 
Financial Statements for the year ended 31 December 2019.  
3  REQUEST TO THE CBFA TO LIFT THE LIMITATION OF THE EXPENDITURE AGAINST 
APPELLATE BODY MEMBER FEES  – WT/BFA/W/52 9 
3.1.  The Chair man recalled that  the General Council had approved the 2020 Budget, totalling 
CHF 197.2 million, in December 2019, together with a limitation of e xpenditure against the budget 
allocated to Appellate Body Member Retainer Fees  and variable costs, respectively . He added that 
the division hearing the appeal in Australia – Tobacco Plain Packaging (Complaints by the Dominican 
Republic and Honduras) had co ntinued to work on the appeal in the first months of 2020, and the 
total retainer fees due to Members A, B and C for the three months up to 31 March 2020 reached 
CHF 84,735.  WT/BFA/188  
 
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  3.2.  The Chairman further noted that the contract for Member D ends on 30 November 202 0. The 
total retainer fee payable for this period is CHF 103,565. Given the temporary limitation of 
CHF 100,000, the Chairman observed that a lifting of the limitation is required for an additional 
CHF 88,300 so that the expenditure amount can be extended to CHF 188,300 in order to address all 
outstanding contractual obligations with respect to the Appellate Body at this time.  
3.3.  The Chairman proposed therefore that the Committee decide to lift the limitation against the 
budget line for Appellate Body Member f ees to extend the amount from CHF 100,000 to 
CHF 188,300.  
3.4.  A Member  said it had reviewed the proposal contained in WT/BFA/W/529 but disagreed with 
its premise. In this regard the Member  reiterated its view, as expressed at the D ispute Settlement 
Body, that  there is no current Appellate Body Member who would be owed retainer fees. The Member  
was therefore not in a position to support the proposal.  
3.5.  A Member  was grateful that work on the appellate report on the Australia – Tobacco Plain 
Packaging  had been completed before the Appellate Body ceased to be operational. However, the 
Member  noted that there did not appear to be consensus to lift the temporary limitation at this time. 
Without stating a specific view on the lifting of the limitation, t he Member  queried why the original 
expenditure limit, which was known to the Secretariat , was overspent  adding that there did not 
appear to be a clear rationale  for this in light of the known parameters of Australia - Tobacco Plain 
Packaging  dispute . 
3.6.  A Member  said it would not repeat it s position regarding the circumstances in which the 
limitation of expenditure on Appellate Body Member fees was set, but simply r egretted that  the 2020 
budget for the Appellate Body  was on the agenda  again.  The Member  reiterate d its earlier question 
regarding the origin of the limitation on Appellate Body Member expenditure, and whether the v alid 
contract s signed by the Secretariat had been taken into account at the time. The Member  further 
asked why  expenditure was not managed to ensure that existing obligation s be respected  as a first 
priority, given the decision to set a limitation against the budget allocated to Appellate Body Member 
fees. Making mention of the need to maintain  the credibility of the WTO and the C BFA's decision 
allowing the Committee to lift the limitation when it deems it appropriate, the Member  asked the 
Committee to consider the proposal and supported lifting the limitation as reflected in document 
WT/BFA/W/529.  
3.7.  A Member  considered this to be ye t another illustration of some of the problems that exist and 
asked the Secretariat what contract s Members A, B and C had been given , that they had ceased 
their positions, but yet the WTO continued to pay them. The Member  also noted that WTO Members 
had be en asked to indulge in a retainer for specific purposes and asked what logic there was now to 
call this compensation a retainer; and what were these individuals being retained  for from January 
through March 2020 . The Member  recalled that the original docum entation referred to the payment 
of a retainer fee to compensate Appellate Body Members for having to make themselves available 
on short notice to hear new appeals . However, the Member  did not see how that eventuality was 
real in 2020. Referring back to ea rlier comments, including in relation to the Report of the 
Independent External Auditor, the Member  noted that the current proposal to lift the limitation on 
Appellate Body Member expenditures could be questioned on many levels.  
3.8.  The Chairman concluded stat ing that the Committee took note of the proposal  and comments 
made.  
4  PROPOSED UTILIZATION OF THE 2019 BUDGETARY SURPLUS  – WT/BFA/W/5 26 
4.1.  An Official of the Secretariat introduced the topic by stating that similar proposals, to have the 
budgetary surplus transferred to the Working Capital Fund, had been made in the previous two 
years.  
4.2.  The Chair man stated that i t is clear t hat the item was of a routine  nature. He then read out the 
recommendation below, which was endorsed by the Committee.  WT/BFA/188  
 
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  4.3.  The Commit tee on Budget, Finance and Administration recommends to the 
General  Council that the WTO budgetary surplus for the year ended 31 December 2019, 
amounting CHF 5,010,376 be transferred to the Working Capital Fund.  
5  SUSPENSION OF ADMINISTRATIVE MEASURES FOR NI GER – WT/BFA/W/528  
5.1.  An Official of the Secretariat informed the Committee  that after  a request and related 
discussions with the Secretariat, Niger ha d agreed to a suggested payment plan to address its 
arrears over the next seven years . The annual instalment  would be  CHF 49,238.00 plus the annual 
assessed contribution . The assessed contributions for 2020 are CHF 29,325. Therefore, Niger would 
be required to pay CHF 78,563 in 2020, if the payment plan is accepted.  
5.2.  The delegate from Niger stated that the current proposal for a new payment plan is yet another 
sign of his country 's authorities' attachment to the multilateral trade system based on rules. He cited 
the difficulties that had impeded the country from complying with its previous payment plan. He 
added that  despite the COVID -19 pandemic  Niger was  able to pay  CHF 250,559 in recent months,  
reduc ing its arrears by 40% , adding that t his leaves a bal ance of CHF 373,991. The delegate 
expressed hope that the proposal would  be welcomed by the Committee and a recommendation 
presented to the  next General Council meeting.  
5.3.  A Member expressed support for the recommendation, noting that it is consistent with 
recommendations by the External Auditors. He thanked Niger and the Secretariat for having worked 
out agreeable terms .  
5.4.  The Committee endorse d the following recommendation  to the General Council .  
5.5.  In accordance with the decision of the General Council of 15  November 2012, the 
Committee on Budget, Finance and Administration recommends that the General Council 
suspend the application of Administrative Measures for Niger with the proviso that Niger 
undertakes, in writing, to abide by the schedule of instalment payments for liquidating all 
arrears, over a period of seven years. The payments must be received no later than 
31 December of each year, starting in 2020, failing which the Administrative Measures 
will be reinstated.  
6  AMENDMENT TO STAFF RULE 103.1 – WT/BFA /W/524  
6.1.  An Official of the Secretariat said  the rule codifies the practice that had been in  place for many 
years in the Secretariat  regarding the appointment of staff in the immediate office of the Director -
General, and was being brought  to the attention of the Committee for information purposes.  
6.2.  He added that other organizations, for example the United Nations , have similar procedure s, 
which allow the Director -General to expeditiously  appoint  staff in his/her  immediate office. At the 
same time, it specifies restrictions to the continuation of such staff in the organization  since, when  
the Director -General leaves , the staff appointed under this staff rule would also have to leave the 
organization.  
6.3.  He stated that the rule protects the organization against legal actions by other staff who may 
question w hy they have to go through a regular selection process whilst staff in the Director -
General 's Office can be appointed without competition.  
6.4.  A Member asked how sub -paragraphs i, i i, iii and iv of staff rule 103.1  are to be understood , 
at the present moment, given that the Director -General ha d departed. He said the implications for 
the current staff  in the Office of the Director -General  is unclear.  
6.5.  The Official of the Secretariat said the rule c larifies the process which was so far obscure and 
that in the future staff appointed by the Director -General under this modality will have to leave the 
organization at the same time as the future Director -General leaves the organization.  
6.6.  The Member said th at the date on which this rule came into effect was interesting . WT/BFA/188  
 
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  6.7.  The Official of the Secretariat acknowledged that the rule ought to  have been brought to the 
attention of the Committee much sooner adding that the d elay due to the fact that,  at the end of 
2019, there were other more pressing issues like the budget  on the agenda , and that in 2020  
COVID -19 hit, thus  causing  delays .   
6.8.  The Committee took note of the a mendment to Staff Rule 103.1.  
7  FINANCIAL REGULATION FOR OP ERATIONS PENDING BUDGET APPROVAL – 
WT/BFA/W/507.REV.1  
7.1.  The Chair man noted that the Committee had discussed this topic during its meetings that took 
place on 9 March, 23 June and 7 July. He said m any delegations had welcomed the rationale behind 
the proposal , noting that this kind of provision is consistent with best practice  and important to the 
smooth functioning of the WTO. The Chair man further recalled that on 7 July an update of the 
refinements that were being considered to the text had been provided. Th ese related to the kind of 
expenditure that can be incurred during the interim period; reporting to the General Council; the 
possible period of interim authority; and assessment of contributions by WTO Members.  
7.2.  The Chair man added that comments had been ma de by delegations relating to the important 
caveat that such a regulation should not be seen to impact on the urgency required for  the 
Committee to take decisions on the subject of passage of the 2021 budget. He added that the matter 
had been placed on the  agenda of the CBFA to update  Members and to enable them to pose any 
further questions and provide comments.  
7.3.  A Member  asked for  clarity on how interim reporting of expenditures would occur if there is no 
meeting of the General Council during the interim period , whether the D irector -General  would be 
obligated to call an extraordinary General Council meeting in such a situation, and in what 
circumstances that would be the case.  
7.4.  A Member recalled that the Chair man had held informal consultations among delegations to 
discuss their concerns with respect to the proposed text , adding that many had articulated their 
positions and hoped to hear from the Chair man regarding the  feedback he had received from 
delegations. The Member  expressed the hope that the Chair man would propose a way forward and 
to see a revised version of the proposal in order to make progress.  
7.5.  Several Members reiterated their support for the proposal, some emphasizing the  importance 
of adding language  to the text to ensure that the interim period  would  be limited in time, and to 
disincentivize any prolonged impasse.  
7.6.  A Member recalled that some Members had suggested the matter could be taken to a small 
group for discussion in order to make further prog ress without impinging on the time that was 
needed at the CBFA for discussion of other issues. The Member  noted that such a small group had 
not yet been created and expressed the hope that the Chair man could provide an update on how he 
saw the process goin g forward.   
7.7.  Several delegations echoed the general view that the matter could be dealt with in a working 
group  and said they would welcome the Chair man's views as to how to proceed in order for progress  
to be made . 
7.8.  A Member said his delegation  appreciated the efforts thus far to investigate possible 
modifications to Financial Regulation 10. The Member ex press ed doubt as to the necessity for the 
modifications  and the view that the disruptions that could be  caused  to other aspects of the budget 
process, incl uding calculation of the assessed contributions and implications for the Working Capital 
Fund, outweigh any possible benefits that might be achieved through the revisions. The Member 
urged the Committee to  continue to focus on reviewing the 2021 budget proposal and working to 
secure consensus on a budget based on this proposal. The Member said his delegation  remain s open 
to discussing its concerns in any format.  
7.9.  A Member said their delegation is  ready to pa rticipate in any inclusive and transparent process 
to further the deliberati ons on Fina ncial Regulation 10 . WT/BFA/188  
 
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  7.10.   The Chair man said he had reminded delegates of homework he had given to some 
delegations. The Chair man said that he had already updated Members in J uly on the discussions. On 
the question regarding how the General Council will be informed of interim expenditure if there is 
no General Council meeting, the Chair man said reporting could be to Members, with or without a 
General Council meeting.  
7.11.   A Member  asked whether a revised text for Financial Regulation 10 was in preparation and if 
it would be circulated.  
7.12.   The Chair man thanked delegations for their comments and said he would reconvene small 
group consultations with a view to circulating a revised versio n of the proposed regulation, reflecting 
comments received from delegations. He added that this should not detract from adoption of the 
WTO's 2021 budget, and that the Committee would revert to this matter.  
7.13.   A Member  requested that any process going forward  be transparent and open to all 
delegations.  
8  WTO 2021 BUDGET PROPOSAL – WT/BFA/W/523  
8.1.  The Chair man recalled that the 2021 WTO Budget Proposal had been discussed at the meeting 
of the CBFA that took place on 7th July where many delegations expressed support  for the proposal. 
The Chairman further noted that the Secretariat had responded to questions raised by Members in 
document WT/BFA/INF/12, dated 11 August 2020, and referred to the importance of adopting the 
budget proposal in a timely fashion.  
8.2.  A member  recalled that his delegation  had already raised a number of questions relating to 
significant overspending (and/or under budgeting) of some budget lines in the review of the Financial 
Performance Report for 2019. In particular, the Member  emphasized that a m ore thorough 
assessment of temporary and short-term Staffing needs be undertaken and, if appropriate, the 2021 
Budget Proposal modified to present Members with a more accurate estimate of projected spending. 
The Member  recalled that the External Auditors had expressed concerns regarding the over -reliance 
on short -term staffing, and the extension of L -posts beyond 4 years. According to the Member , 
overspending of these budget lines did not appear to be limited to 2019 an d is continuing  in 2020 . 
The Member added that the Budget proposal should accurately reflect the needs of the institution at 
the outset.  
8.3.  Referring to WT/BFA/ INF/12 and the responses given to questions 1 -3, as well as Section 4.16, 
Table 37 and Table 88 in  WT/BFA/W/527, the Member  considered that the materials provided did 
not fully respond to his delegation's  request for a more detailed accounting of the Programme 
Support Fund. The Member  asked what the salary costs related to the PSF  were in 2019 ? whether  
this refers to a contribution to the salary line item in the regular budget (and if so, why there is  no 
contribution of  CHF 2 million reflected  in the regular budget? If not, whose salaries are being referred 
to? The Member  also queried who works for the Programme Support Fund?  
8.4.  The Member  further noted that it appears that the overhead shared with other organizations is 
almost exclusively related to the STDF and asked whether this was the case. In addition, the Member  
enquired  whether overhead sharing is something that is unique to the structure of the SDTF, or 
whether overhead sharing is common with other trust funds, but just did not occur in 2019?  
8.5.  The Member  reiterated his delegation's  request for a detailed accounting, and a better 
explanation as to wh y Secretariat documentation demonstrates that considerable regular budget 
staff time and resources are frequently used to manage extra -budgetary funds, but that only 10% 
of 13% is actually reimbursed back to the regular budget for these expenses which the broader 
Members did not authorize. The Member said that  it appeared from this practice that the Secretariat 
believes that the cost to the regular budget of implementing trust -funded activities with regular 
budget staff is only 1.3% of total expenditure. Th e Member  asked whether this was correct? And 
what is the basis for this determination? According to the Member , the response s to questions 1 and 
2 very clearly state that there are direct costs incurred by the WTO, and that the 13% is intended 
to mitigate those costs. Yet, only 1.3% is returned to Members.  WT/BFA/188  
 
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  8.6.  The Member said his delegation  deemed the response to Question 4 in WT/BFA/ INF/12 to not 
be responsive to the original question. The Member  added that , in response to a previous question 
on staff levels,  the Secretariat was able to produce, for a limited number of divisions, the overall 
staffing levels. The Member  requested that as a supplement or modification to the 2021 budget 
proposal a detailed budget allocation breakdown be provided for all divisions  so that Members can 
see the exact distribution of resources across the organization. The Member added that  this divisional 
breakdown ought to  include the allocation of staff referred to in question 4, as well as the allocation 
for travel referred to in qu estion 5, and other activities referred to in question 6. The Member  
explained that their comments in this regard related somewhat to the discussion on output reporting.  
8.7.  In relation to question 7, the Member said his delegation  found the response to be ext remely 
puzzling and expressed the view that the issue requires further discussion. The Member  noted that 
the 2021 budget proposal is presented to Members with an output section that implies that strategic 
planning has gone into budget allocations for specific purposes - and that staffing and resource 
decisions will be made throughout the year in a ccordance with these promised goals and targets. 
The Member said  the response provided in WT/BFA/ INF/12 raise s questions about the purpose of 
the output section in the budget proposal. The Member  requested that the budget proposal be 
provided on a division -by-division basis which it viewed as a more effective way to see how resources 
are utilized.  
8.8.  Regarding the responses to questions 8 and 9, the Member  remarked that the WTO does not 
appear to exercise any authority or oversight over how the contribution  to the ITC's budget is 
utilized, however it takes full credit for CHF 18 million as part of the overall amount that the WTO 
spends on technical assistance and capacity building. The Member  said it did not know how that 
money  is used. The Member  added that th e Secretariat did not however appear to account for 
expenditures from the WTO managed extrabudgetary trust funds, including the G lobal Trust Fund, 
in the overall accounting for capacity building and technical assistance. The Member  emphasized in 
this regar d that if WTO Members are to get an accurate picture of the magnitude of resources being 
directed toward capacity -building, then both ITC and trust fund expenditures should be counted 
since both flow through the WTO Secretariat, or neither should be counte d since WTO Members do 
not actually have a role in managing those resources.  
8.9.  Regarding the 2021 budget proposal the Member made comments with respect to the item 
"Other Staff Expenditure". In particular, seek ing a drafting change on page 12, paragraph 3.9  where 
it is of the view that  the current language reflects only the Secretariat's view and is not reflective of 
the viewpoints of a Member. According to the Member , the terms of the agreement between the 
Member  and the WTO are clear, and the Member  contin ues to fulfil its obligations under that 
agreement. The additional charges referred to in this table are not unreimbursed US taxes, in the 
Member 's view. While the Member  said his delegation is aware of the view of the Secretariat, the 
Member expressed the  view that the budget proposal is  not the correct vehicle for asserting a 
particular viewpoint on this issue. The Member  requested that the language be modified to read 
"expenditure linked to a methodology differential on reimbursements of U.S. taxes for s taff liable to 
U.S. taxes." The Member  said his delegation  consider s this to be a more appropriately neutral way 
to refer to WTO expenditures that it viewed as discretionary. The Member  further considered that 
the language it was suggesting is consistent w ith the description found in the Opinion of the External 
Auditor found in WT/BFA/W/531 paragraphs 5.52 and 5.53.  
8.10.   Regarding  the contribution to the ITC, the Member  said his delegation continues to have 
questions regarding the proposed transfer of WTO asses sed contributions to the ITC operating 
budget. The Member  said his delegation  was reviewing the responses provided but did not consider, 
at this point in time, that they fully responded to its questions , warranting further review . 
8.11.   A Member  thanked the Secr etariat for clarifying that funds from other budget items could be 
reallocated to the Appellate Body Operating Fund, if the Appellate Body resumes its activities in 
2021. The Member  further asked  what concrete mechanisms would permit this reallocation, and  
what other budget items would be involved.  
8.12.   A Member  noted that the budget proposal was discussed prior to the current pandemic, and 
that most countries were experiencing economic contraction and budgetary cuts. The Member  said 
it was not suggesting that Member contributions should be reconsidered but asked whether the WTO 
was considering opportunities for savings. As examples, the Member  referred to travel expenses and WT/BFA/188  
 
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  WTO Committees that have not met for some time, such as the Committee on Trade and 
Devel opment.   
8.13.   A Member  noted that important questions had been asked which had been answered, and 
that there had been some follow -up questions. The Member  considered that some of these questions 
overlapped with the discussion that the Committee had had on trust funds and how th ey are seen 
in relation to the regular work of the WTO. While recogniz ing the importance of these questions, the 
Member  queried whether their further discussion would lead to any specific amendments to the 2021 
budget, or not. The Member expressed  doubt th is would be the case, and suggested that such 
discussions could be held separately, while at the same time the budget could be adopted. The 
Member  added that his delegation is  ready to adopt the budget given the importance of ensuring 
the Secretariat 's work for 2021.  
8.14.   Responding to earlier remarks, the Member  noted that this was the 12th consecutive year of 
zero nominal growth  budget  and that if WTO Members were looking for efficiencies the WTO had 
already done very well in finding those efficiencies. Regar ding the impact of COVID -19, the Member  
said it was pleased with the quarterly report s for 2021 where there was a passage on the matter. 
The Member  also noted that the WTO has an ambitious work programme that could lead to the need 
to finance new activitie s, such as in the context of the Fisheries negotiations. For all these reasons, 
the Member  considered that it would be very difficult at this stage to agree on any fundamental shift 
to the 2021 budget proposal, and that it might be best to redirect attenti on and energy instead to 
the development of a budget proposal for the 2022 -2023 period. The Member emphasized  that the 
question here was whether the budget proposal for 2021 could be adopted, and that many Members 
were keen to see an early adoption of the proposal.  
8.15.   Several Members supported the suggestion that  good ideas that had been expressed be 
channelled into the discussion of the next biannual budget for 2022 -2023 and some added that they 
were ready to adopt the budget for 2021 as it currently stands . 
8.16.   Due to the lack of time remaining for the meeting, the Secretariat did not respond to the 
additional questions raised during the meeting and indicated that responses would be provided 
subsequently.  
8.17.   The Chair man thanked the Interpreters, and delegations for  their interventions. He noted that 
the 2021 budget proposal was on the agenda for endorsement by the Committee. The Chair man 
added that he had heard at least two textual suggestions, which may or may not require circulation 
of a revised document. The Chai rman also noted the discussions relating to the WTO's Audited 
Financial statements for 2019 and requested delegations to provide , in writing , any textual change 
to the WTO's 2021 budget proposal they would like to suggest, as contained in document 
WT/BFA/W /523.  
8.18.   With regard to general questions that remained, the Chair man requested delegations to 
consider whether such questions relate to new policies or future biannual budgets, rather than 
adoption of the 2021 budget per se.  
8.19.   A Member  said her delegation would be interested in a further opportunity to discuss matters 
regarding the 2021 budget proposal.  
8.20.   This was supported by another Member , noting that the annotated agenda for the meeting 
referred to the 2021 budget as "for follow -up and to discuss the way f orward".  
8.21.   In conclusion, the Chair man pointed to the importance of providing time for further discussion 
but also stressed the need to move forward expeditiously. He thanked delegations for their 
comments and further questions and noted that the Committee will revert to the matter.  
9  Q2 2020 BUDGET AND FINANCE REPORT – WT/BFA/W/530  
9.1.  An Official of the Secretariat presented  the Budget and Finance Report for the second quarter , 
stating that 65% of the assess ed contributions of  CHF 195.5 million were received and that  the rate 
for Observers was  37%.  WT/BFA/188  
 
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  9.2.  Regarding Members under Administrative Measure , 6 Members were under  Category I, 
3 Members under  Category II and 8 Members under  Category III.   
9.3.  Two Observers were under Category I, 1 Observer subject to Category II and 3 Observers 
subject to category III.  
9.4.  Budgetary expenditure as of the end of June, was 52% of the budget, or CHF 102 million . 
9.5.  On Part A , Staffing Resources, the lower expenditure on the regular salaries is partly 
compe nsated by higher expenditure on the temporary staff. Compared to June 2019 , expenditure 
under translation , interpretation and as Panellists' fees is lower , mainly due to the COVID -19 
pandemic.  
9.6.  Under  General Services , Part B, the funds for major contracts for the security outsourcing, 
cleaning, the International Computing Centre and the Service Desk were committed to the end of 
the year . The overall actual expenditure rate on the General Services was reduced by approximat ely 
3% compared to  the prior year , which is mostly due to the COVID -19 pandemic.  
9.7.  The areas of lower spend were mainly utilities and the external security provider. That was 
partly offset by the purchase of sanitary supplies such as masks, plexiglass separations and higher 
expenditure on office cleaning and disinfection. Under travel & hospitality, the expenditure has 
decreased significantly due to the pandemic. Under section Capital Expenditure, the expenditure has 
increased significantly which is mainly due to the purchase of software to hold virtual meetings 
through various platforms during the pandemic.  
9.8.  Under Financial Expenditure, the reimbursement of the 50 years interest -free loan for the new 
premises is included as well as the negative interest.  Funds for O perating Funds, under Part C , have 
been fully replenished at the beginning of the year and the ITC contribution has been booked until 
the end of June.  
9.9.  For actual expenditure rate amounts to 44% at the end of June 2020. For comparison, the 
expenditure rate in June 2019 was 46%.   
9.10.   The Official of the Secretariat detailed  savings due to COVID -19 and also additional 
expenditure related to COVID -19, as of the end of June . Compared to June 2019, there were  
significant savings on the security guards because there were no staff  members in the building  for 
several months;  translation to the tune of CHF 190,000, interpretation at CHF 170,000, travel at 
CHF 2.3 million, electricity at CHF 20,000, water at CHF 10,000, and postal expenditure at 
CHF 30,000, totaling  CHF 3 million.  
9.11.   On the unforeseen additional expenditure end was  purchase of masks, plexiglass separations 
and signage, additional cleaning, telecommunications and virtual platforms for meetings . 
9.12.   A Member asked for more i nformation on the breakdown of costs of running meetin g via 
Interprefy relative to running interpretation using in -house Interpreters , at a future CBFA meeting.  
9.13.   Referring to the c apital expenditure emanating from  the purchase of software to hold virtual 
meetings , a Member said that her delegation would like to know how the purchase or procurement 
was done, how value for money  was ensured  and whether there is an open  bid for such kind of 
procurement.  
9.14.   The Chairman said that the information requested for would be provided.  
9.15.   The Committee took note of  the Q2 Budget and Finance Report.    
10  Q2 2020 EXTRA -BUDGETARY FUNDS REPORT – WT/BFA/W/525  
10.1.   An Official of the Secretariat, building on from the previous agenda item, briefly mentioned 
the impact of COVID -19 on trust fund expenditure rates. Additionally, he provided an update of 
contributors to trust funds since the end of the reporting period. F or the Global Trust Fund 
contributions had been received from Canada, Sweden and the United States; for the Netherlands WT/BFA/188  
 
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  Training Programme, a contribution had been received from the Netherlands; and for the STDF 
contributions had been received from Canada,  Germany, the Netherlands and the United States of 
America.  
10.2.   A Member said it would be important to go over some of the smaller trust funds that seem to 
struggle to disburse. Adding that i ndividual trust fund donors receive detailed expenditure reports 
from the funds to which they contribute , the Member asked whether or not those detailed 
expenditure reports could be made public to all Members  because it is important to see, especially 
with the G TF, what they fund and how those moneys are used so that Member s can get a total 
picture of the activit ies. 
10.3.   The Chairman said that the Secretariat will  provide  answers  adding that there is also the  
possibility of small group discussions on extrabudgetary funds that may contribute to a better 
understanding of the matte r.  
10.4.   The Committee took note of the Q2 Extra-budgetary Funds Report.  
11  OTHER BUSINESS  
11.1.   A Member stated that his delegation  highly values the service provided to Members through 
the virtual  platform , with interpretation, adding that t his tool not only has the a dvantage of 
safeguarding delegates' health, particularly those in high risk categories, but also to facilitate the 
participation of delegates in Capital and others that may be away from Geneva.  
11.2.   The Member said the virtual platform  had allowed delegates  to remain connected and to 
pursue their work in the midst of a global pandemic. He said that  the impact of this pandemic cannot 
be underestimated.  
11.3.   He said his delegation respect s the wishes of those who opt to participate in person in 
meetings.  Therefore,  he said his delegation is of the view that hybrid meeting s that have taken 
place, and continue to take place , are able to strike a balance and respect the needs of each Member 
and their right to decide. He said that, like other earlier delegations that co mmented on this aspect, 
his delegation is  concerned about why , for the meeting of this important Committee, participation 
to the meeting through a virtual platform was not availed.   
11.4.   In this regard, the Member said his delegation respectfully request to be  informed 1) about 
what criteria are used to decide that the meetings of this Committee are not held through the virtual  
platform  with interpretation?  2) what are the characteristics of this Committee that set it apart from 
other Committees including Negot iation Committees that do use the platform ? 3) given that the 
WTO is a member -driven organization what was the process of consultation with Members in order 
to make the decision that this particular Committee does not have access to this platform ? 
11.5.   In closi ng the Member expressed thanks in in advance for answers that the Chairman  and the 
Secretariat may provide to the questions and reiterate d his delegation's request that this Committee 
meet using the same tools as other Committees, namely that the next meet ing should be  offer the 
extension to the meeting through the virtual p latform , offering interpretation.   
11.6.   The Chairman said the comments had been  noted  and that he would  refer the matter for 
discussion by the Secretariat and DDG Brauner.  
12  CLOSING REMARKS  
12.1.   The Chairman thanked the Interpreters and the delegates for their  cooperat ion. 
12.2.   The Chairman said that discussion of the 2nd Quarter reports would be on the agenda of a 
future meeting . 
 
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