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WT/BFA/150  
 
5 October 2015  
(15-5197)  Page: 1/4  
Committee on Budget, Finance and Administration    
 
 REPORT OF THE MEETING HELD ON 25 SEPTEMBER 2015 
The Committee on Budget, Finance and Administration met on 25 September 2015 under the 
chairmanship of Ambassador Daniel Blockert (Sweden). The terms of reference and composition of 
the Committee are set out in document WT/L/44/Rev.1. The agenda contained in document 
WTO/AIR/BFA/5 was adopted.  
1  BUDGET AND FINANCE REPORT – 2ND QUARTER 2015 (WT/BFA/W/371 AND 
WT/BFA/W 372) 
1.1.  A member of the Secretariat presented the situation regarding Members' and Observers' 
contributions received in the second quarter of 2015. The receipts of contributions and the cash 
position of the Organization were satisfactory. With respect to Members' contributions, 62% of the 
overall assessment had been received and 50% on the Observer side. As of 30 June 2015, 
72 Members and eleven Observers had no outstanding balance. 
1.2.  At the end of June 2015, 17 Members and six Observers were subject to Administrative 
Measures. As from the end of September, nine Members were subject to  Category I and 6 Members to Category III. Kuwait and Tanzania had been removed from the Administrative 
Measures list since the last report in June, whereas no changes had occurred for Observers.  
1.3.  The 2015 budget remained on track at the end of the first semester with an expenditure rate 
of 51% of the budget or MCHF 100. The Secretariat drew the Committee's attention to the fact that the lower rate of expenditure on Staff expe nditure, was due to the high number of vacant 
posts in the first quarter of the year. It was recalled that these vacancies were decreasing 
gradually on a monthly basis, as posts were progre ssively filled. It was noted that the expenditure 
in some areas included commitments for annual contracts until year end. 
1.4.  A member of the Secretariat then presented the financial situation on trust funds, especially 
focusing on the Doha Development Agenda Global Trust Fund (DDAGTF). Voluntary contributions totalling MCHF 2.9 were received by the DDAGTF du ring the first semester from Australia, Austria, 
European Union, Ireland and United States. Additi onal contributions were also expected to be 
received based on pledges. The Secretariat indicated that France and Ireland had participated to the Internship Programme and that most of the fu nds were in a good position. He then reminded 
the Committee that a new Biennial Technical Assistance Plan would be presented as part of the 
2016-2017 biennial budget process in October. 
1.5.  The Secretariat reiterated the importance of financing the participation of Least Developed 
Countries during MC10 and urged Members to send funds at their earliest convenience, to ensure 
that the logistical aspects of planning could be  handled immediately. The Chair of the Committee 
encouraged Members to communicate and follow through on any plans to support the LDC fund.  
1.6.  The Delegate of Germany announced a cont ribution of an amount of Euros 150,000 to the 
STDF in the coming weeks. The Committee took note of the reports. 
2  REPORT ON THE WORKING GROUP ON AFTER SERVICE HEALTH INSURANCE (ASHI) 
(WT/BFA/W/370) 
2.1.  The Chair of the Working Group on After Service Health Insurance (ASHI) presented the 
report of the Working Group, which had been circ ulated officially to Members in July 2015. He 
listed the major recommendations that were contained in the report and outlined expectations for elements of the strategy proposal to be deve loped by the Director-General. The Chair of the WT/BFA/150 
 
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  Working Group underlined that the major cost drivers were demographic. The principal 
components identified within those high costs were  mostly hospitalization charges, doctor's fees 
and medication. In addition he noted that the curre nt estimated liabilities of MCHF 343, could grow 
to 1.5 billion by 2050 if no action was taken.  
2.2.  The Chair of the Working Group pointed out the need for an integrated approach, a 
consideration of greater cost controls as well as considering more funding.   
2.3.  He reminded the Committee that those recommendations remained sensitive issues for 
stakeholders and that any strategy development process would require consultations with these 
stakeholders, staff and pensioners. He added that Members would monitor the strategy development. In that sense, the Chair of th e Working Group encouraged the Committee to 
establish a monitoring group to liaise with the WTO Secretariat during the strategy’s development. 
2.4.  In conclusion, the Chair underlined the co nsiderable work done by the Members of the 
Working Group and the Secretariat. He thanked them for their engagement expressing great 
gratitude for their work.  
2.5.  The Secretariat thanked the Chair and the Me mbers of the Working Group for their hard work 
and especially for all the clear guidance containe d in the report that would enable the Director-
General to formally develop a strategy and to remain in line with the Working Group's 
recommendations. 
2.6.  A Member thanked the Chair and the memb ers of the Working Group for the comprehensive 
report. He wished to underline one particular aspect, which was considered by the Working Group, relating to the comparison of benefits with othe r international organizations as well as experience 
of these organizations in dealing with such long-term liabilities. He noted that this aspect should 
be further looked into as part of any further wo rk in developing a clear strategy to arrest the 
expansion of the long-term liability and setting the ASHI plan on an affordable footing. The Chair 
of the Working Group noted that it would be usef ul to take into account experiences of other 
international organizations on this matter.  
2.7.  The Chairman of the Committee on Budget, Finance and Administration thanked the Members 
and the Chair of the Working Group. The Committee agreed on the establishment of a Monitoring 
Group. He indicated that he would consult Members to identify a Chair for the Monitoring Group and invited Members to inform the Secretariat about the intention to take part in that Monitoring Group. He requested the Secretariat to draft th e Terms of Reference of the Monitoring Group, 
which would include the comments made by one dele gation and added that the item would be part 
of the next agenda. The Committee endorsed the report of the Working Group on ASHI. 
3  PROPOSED TERMS OF REFERENCE FOR A WORKING GROUP CONCERNING AN AUDIT 
COMMITTEE (WT/BFA/W/349/REV.3)  
3.1.  The Chairman presented the document which contained the revised proposed Terms of 
Reference set out in the document mentioned above. He then summarized all the information on 
that subject that had been provided to the Committee by the Secretariat on several occasions during past CBFA meetings. The Chairman indicated that changes in the Terms of Reference for an 
Audit Committee Working Group were proposed by two delegations, the United States and Turkey. 
Then the Delegate of United States gave details on the suggested changes. He also suggested that 
the target date for the Working Group to deliver it  recommendations be pushed to the end of June 
2016 considering the workload Members faced to the end of year 2015.  
3.2.  Several Members took the floor and supported the proposed text of the Terms of Reference 
and the revised deadline. Two delegations already indicated their willingness to take part in the 
Working Group on Audit Committee. 
3.3.  The Committee agreed to establish a Working Group on the Audit Committee question. The 
Chairman thanked the Committee and informed the Delegations that he would shortly consult Members to nominate a Chair of the Working Group and invited the Members who were interested 
in taking part in the Working Group to register with the Secretariat. WT/BFA/150 
 
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  4  PROPOSAL FOR ALLOCATION OF CURRENT ACCUMULATED BUDGET SURPLUS 
(WT/BFA/W/373) 
4.1.  A member of the Secretariat introduced the report to the Committee. He reminded Members 
that elements of the proposals had been discussed previously in the Committee, but that as it had 
been five years since a CBFA had received a proposal on the utilization of a surplus amount, the 
paper provided some additional background and cont ext. He said that it was the objective of the 
Director General to address the overdue surplus decisions of the past in order to clear the way for 
deliberations about the future and the next biennial budget cycle.  
4.2.  The member of the Secretariat reminded the Committee of the WTO's commitment to ensure 
the ongoing value of the building as part of the WTO Agreement with the Swiss Authorities signed 
in 2013. He then recalled to the Committee that th e experts from FIPOI had identified an annual 
provision of MCHF 1.3 per year, as necessary to build up the Building Renovation Fund. The 
Secretariat assured Members that in addition to any amount they decided to allocate to the building fund, the budget proposal for the biennium 2016-17 would include a budget line to 
contribute to the fund on an on-going basis. 
4.3.  The member of the Secretariat then turned to the proposal related to ASHI and reminded 
Members that the ASHI report endorsed by them earlier in the meeting included the 
recommendation to establish a mechanism for ac cumulating funding beyond the annual pay-as-
you-go approach.  He pointed out that this would effectively align the budgetary and financial results since 2012 consistently with IPSAS requirements.   
4.4.  The Chairman requested that Members expr essed their views on the three recommendations 
set out in the document. Several Members took the floor to express their views. They generally 
expressed support for the two recommendations related to the establishment of a building renovation fund and expressed some reservations on the third recommendation to set aside 
accumulated surpluses for ASHI. In relation to bo th elements of the proposals Members expressed 
a preference for viewing the proposals in the cont ext of the up-coming biennial budget proposals.  
A few Members indicated that in any case they would need more time to consult with their 
capitals.  
4.5.  A Member wanted to know whether a budgetary line would be reflected on the upcoming 
biennium budget to reflect the Building Renovation Fund budget. The Secretariat answered that it 
would be the case. The Delegate of Switzerland em phasized that the establishment of the Building 
Renovation Fund was of high relevance for hi s country. He reminded the Committee of some 
background information related to the WTO site. Especially the agreement of the WTO with the Host Country to ensure the maintenance of the two buildings in the future in exchange of the WTO 
becoming the owner of the property. He requested that the Secretariat integrate a budget line for 
the building renovation, based also on FIPOI advice. The delegate also pointed out that the MTOF closing balance had been kept aside to be allocated in the Building Renovation Fund and that a 
discussion had been already taken place within the Committee. The delegate concluded by saying 
that moving further on discussing the utilization of the budgetary surplus should not prevent the Committee from establishing a building Renovation Fund. 
4.6.  Another Member raised the importance that the Members ensure the long term sustainability 
of the building. He then requested that the Co mmittee should understand the difference between 
the annual maintenance and long term fund to cover major expenses. He also underlined that it would be prudent if a long term plan would be outlined on how to handle the deficits on both ASHI 
and the Pension Plan.  
4.7.  A delegation requested that the item on th e Building Renovation Fund be part of a future 
agenda to discuss the matter in more detail, including a higher initial capital. Another Member who 
had been taking part of the Working Group on ASHI  stated that the Secretariat should inevitably 
set aside money to cover the long term liabilities. 
4.8.  In conclusion, some Members said that more clarity was expected on the proposals before a 
structured funding model could be established. The Chair of the Working Group on ASHI dissected 
the situation and explained to the Committee the post IPSAS budgetary surplus in order to avoid 
misunderstanding from Members on that elemen t. The Chairman of the Committee agreed that 
there were some variations and misinterpretation on the ASHI question.  WT/BFA/150 
 
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  4.9.  The Secretariat thanked Switzerland for its statement and stressed that the WTO wished to 
maintain the buildings in good conditions. He also said that the external auditors had suggested that the Secretariat should not neglect its deficit and the long term liabilities. The Secretariat emphasized that the WTO was suggesting to set money aside and certainly not make any 
commitment before the formal strategy would be implemented.  
4.10.  The Chairman recognized that more time and information was necessary for Members to be 
able to take decisions. He suggested that the Committee continue its discussion at a more 
technical informal meeting. He also requested that Members clarify their expectations and what 
kind of clarity they would need to move forward and feel comfortable to take a decision. Then the 
Chairman urged Members to contact the Secretariat to address their concerns on those issues to the Secretariat in order to allow the Secretariat to provide the Committee with the relevant 
information. The Committee took note of the report.  
5  PROGRESS REPORT ON THE ORGANIZATIONAL REVIEW OF THE WTO SECRETARIAT 5.1.  DDG Brauner updated the Committee on the progress of the Strategic Review and gave some 
background information already addressed at the last meeting in June 2015. It concerned the 
evolution from the Working Group deliberations to the Joint Recommendation Group (JRG). The 
Joint Advisory Committee (JAC) concluded its deliberations and had passed on its advice on 
promotion and mobility to the Director General.  
5.2.   The Director General had determined his drafting on mobility and submitted an 
administrative memo that would be shared with the Chairman of the CBFA for information. DDG Brauner indicated that regarding the internal process on promotion policy, no decision was yet 
engaged. He then informed the Committee that the JAC was still deliberating on the framework 
and the mandate for the setup of the internal oversight.  
5.3.  In conclusion, DDG Brauner reported on the progress made on the mediation policy. He 
pointed out that the related admin memo would be sent to the Chairman of the CBFA for 
information as well. He mentioned that the internal process of selecting a mediator within the Secretariat had been launched and a number of suitable candidates had made themselves 
available to undertake the role. DDG Brauner indicated that the new policy would foresee two 
mediators, one internal and one external; a woman and a man would be selected. DDG Brauner offered to continue to update the Committee as the situation evolved.  
5.4.  The Committee took note of the report. 
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