RESTRICTED  
  
WT/BFA/W/344  
 
19 November 2014  
(14-6772)  Page: 1/30  
Committee on Budget, Fi nance & Administration  Original: English  
 
  REPORT OF THE WORKING GROUP ON WTO FINANCIAL REGULATIONS 
1  INTRODUCTION 1.1.  The Committee on Budget, Finance and Administration (CBFA) established a Working Group 
on World Trade Organization (WTO) Financial Regulations. The Working Group was asked to review 
the Financial Regulations (which are set out in document WT/L/156/Rev.2): 
a. to align them with new requirements imposed by the implementation of International 
Public Sector Accounting Standards and with best practices; and 
b. to consider whether the Financial Regulations accurately reflect current practices and 
policies of the WTO and decisions that have been taken by the General Council in relation to the financial management of the WTO. 
2  APPROACH 
2.1.  The Working Group composed of Andrew Stai nes (UK, Chairman), James Baxter (Australia), 
Ian Chin (Hong Kong, China), Martha Evelyn
 Menjivar (El Salvador), Robert Prochazka (Austria), 
Johannes Rühl (Switzerland), Junko Ueno (Japan),  Christopher Wilson (United States). The group 
met six times.   
2.2.  The Working Group reviewed the External Auditor’s Letter of Final Observations on the 
Financial Statements of the WTO for the year ended 31 December 2013 (WT/BFA/W/335). The 
Chair consulted informally with the Secretariat and with the outgoing and incoming External Auditors and reviewed previous decisions taken by the General Council in relation to the financial management of the WTO. 
3  PROPOSED REVISIONS 
3.1.  The Working Group is proposing the foll owing changes to the Financial Regulations.  
Chapter I – Authority and Applicability 
 
Regulation 4 has been expanded to mandate that  the Committee reviews the Financial Regulations 
periodically and at least every four years. The Working Group considered that this addition would 
help to ensure that the Financial Regulations remainder up to date and reflected the views of 
Members.  The CBFA has been defined as “the Committee”, with the aim of making the remainder of the 
regulations easier to read. 
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  Chapter II – Preparation of the Budget 
 Regulation 6 has been amended, to incorporat e a new deadline for the Secretariat to submit 
budget proposals to the Committee for consideration. The Working Group considered that this 
would help to ensure that the Committee had sufficient time to form its recommendation. The 
reference to the role of the Committee in examining the budget proposals and formulating a recommendation to the General Council has been removed as it does not concern preparation of 
the budget. The role of the Committee is examin ing the budget proposal which is covered in 
Regulation 10.  Regulation 7 has been expanded as the Working Group considered that the existing version was 
unclear. The proposed amendment requests that the Secretariat provide more information concerning the breakdown of expenditure, both by  major category and, for illustrative purposes, 
by key activities, together with information on the WTO’s headcount over the period. The Budget 
Proposal for the biennium 2014/15 (see document WT/BFA/W/309) was prepared broadly on this 
basis and the Working Group considered that this a pproach should be encapsulated in the rules.   
 
The preparation of financial information by activity  is a new approach to showing how the budget 
approved by Members relates to the activities of  the Organisation. The Secretariat is currently 
monitoring the following eight core activities: 1) Facilitating Negotiations; 2) Administering Agreed 
WTO Rules; 3) Monitoring Trade Policies; 4) Settling Disputes; 5) Capacity Building; 6) Assisting 
Accessions; 7) Conducting Research; and 8) Reac hing Out. The Working Group considered that 
this approach is helpful to Members but, given that this is a new approach, figures should be prepared on an illustrative basis for the biennium 2016/17. 
 
A reference to the contribution and approval process of the ITC budget has been included.  
A reference to the budget resources assigned to the Appellate Body and its Secretariat has been 
included in order to comply with a decision of  the General Council and Dispute Settlement Body 
(WT/DSB/1).  
Regulation 8 includes a small addition to reflect that supplementary budget proposals should only 
be submitted on an exceptional  basis. This is in line with historical practice: since the WTO’s 
creation in 1995, the Director-General has never submitted a supplementary budget proposal.  
 
Regulation 9 has been reworded to make it easier  to read.  The contribution from WTO observers 
has been explicitly referenced. These modification s do not change the substance of the regulation. 
 
Chapter III – Adoption of the Budget  Regulations 10 and 11 have been reworded to make  it easier to read. These amendments do not 
change the substance of these regulations, apart from the removal of the reference to the 
Director-General submitting his budget proposal, which the Working Group considered duplicative 
with Regulation 6 (see above). A reference to the biennial budget has been added to clarify that 
the revision of the budget for the second year of  the biennium is limited to situation of where 
exceptional or unforeseen changes are taking place.  
Chapter IV - Collection of Funds / Co ntributions by Members and Observers 
 The Working Group proposes renaming this chapte r “Contributions by Members and Observers” to 
better reflect its contents. 
 
Regulation 12 on contributions from Members has been updated to reflect more accurately the 
actual methodology used to prepare the scale of contributions essentially based on data from the 
International Monetary Fund (IMF). The IMF has adjusted its manual and the change has been 
reflected.   
The existing regulation 12 only covers the period until 2013, in line with the General Council 
decision in document WT/GC/M/58. The proposed text continues the current practice of calculating contributions by Members beyond 2013. There are no changes to the methodology to be used by the Secretariat to prepare the scale of contributions. 
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  The proposed new Regulation 12 also references the contribution to the WTO’s Budget assessed to 
Observers.  Regulation 13 on budget contributions has been modified slightly to reflect the ongoing practice in 
the WTO whereby WTO Members receive an invo ice notifying them of their obligation. 
 Regulation 14 on the collection of budget contributions has been expanded to reference the 
General Council decision that Members and Observers in arrears shall be subject to Administrative Measures.  The Administrative Measures, as set out in document (WT/BFA/132) and agreed by the General Council decision (WT/GC/M/138), have b een added as a new Annex A to the financial 
regulations. 
 
Regulation 18 has been amended as the reference to the reduction in arrears has been moved to 
Annex A. Under IPSAS, direct refunds of prior year's expenditure received during the current 
financial period cannot normally be classified as miscellaneous income and according reference to 
this has been deleted.    
Regulation 19 on voluntary contributions has been  amended to take into account the additional 
guidelines on voluntary contributions, gifts or donations from Non-Government donors agreed by 
the General Council (WT/GC/M/87). These guidelines as set out in a new Annex B to the Financial Regulations and mirror the language from the original decision (see WT/BFA/73). 
 
Regulation 19 has also been expanded to take account of the General Council decision to impose an overhead charge of 13% on WTO Trust Funds (see WT/GC/M/11 and WT/BFA/21). 
 
Chapter V – Use of the Funds  
Regulations 22 and 23 have been deleted as IPSAS introduces accrual accounting. Only recognized 
expenditure of a given year is being charged against appropriation of that year. Budget 
appropriations cannot be carried over into the next financial year, nor can unspent income be treated as miscellaneous income. 
 
Regulation 25 has been amended to include some additional transparency regarding procurement 
that overlaps several financial reporting periods, in particular for contracts with a total expected 
value exceeding CHF 2 million.  This threshold was chosen as it corresponds to approximately 1% 
of the WTO’s annual budget at the time of this report.  
Chapter VI – The Surplus Account 
 In Regulation 26, the Working Group clarified the current use of the Surplus Account, but it did not 
attempt to modify its functioning. Neither did the Working Group discuss the possible uses of the 
accumulated surpluses that existed at the time of this report.   
 Chapter VII – The Working Capital Fund 
 
The Working Group does not propose any changes to this section.  
Chapter VIII – Custody and Investment of Funds 
 Regulation 34 has been expanded to reflect current practices on the custody and investment of 
funds, which the Working Group finds useful  in protecting the WTO’s funds and worth 
encapsulating in the formal rules of the Organisa tion. The proposed addition requests that  the 
Secretariat: set criteria for the selection of banks used to hold WTO funds and that funds should generally be held in Swiss Francs (CHF) 
 
Chapter IX - The Accounts / Financial Reporting  
The Working Group proposes renaming this chapter “Financial Reporting” to reflect better its 
contents.  Regulation 35 has been modified to make reference to the 2009 General Council decision to have 
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  Standards (IPSAS) as of 2012. This change in  the regulation had been recommended by the 
External Auditor.  Regulation 38 has been modified to specify that the Director-General shall submit the financial 
statements of the WTO to the External Auditor no later than the 31 March after the close of the financial period. The Working Group considers that this is a reasonable time-frame, which is consistent with the regulations at the OECD and the UN. 
 
Regulation 39 has been expanded to explain th e role of the Committee in the review of the 
financial statements and the external audit report in view of making a recommendation to the 
General Council, who approves the financial statements. 
 
Regulation 40 sets out some of the financial and human resources information that the Secretariat 
typically presents to the Committee. The Committee mandates that the Director-General should 
provide quarterly financial reports no more than  six weeks following the end of the financial 
reporting period. The Quarterly reports shall include updates on the WTO’s financial performance by activity  (for example, technical assistance or dispute settlement). As noted under regulation 7 
above, activity-based reporting is a relatively ne w management information tool for the Secretariat 
and, in recognition of the need to establish new internal processes, the Secretariat shall provide quarterly activity-based reporting from the start of  the 2016/17 biennium. This exercise might also 
provide some of the information needed to enab le the Secretariat to present fuller segment 
information in the financial statements, as highlighted as a “Priority 1” issue in the observations by 
the WTO’s External Auditor in its report dated 8 September 2014, in document WT/BFA/W/335.  
Chapter X – Internal Control 
 Regulation 41 has been amended to add a risk management component as recently implemented 
by the Secretariat and to clarify that all payments shall require a minimum of two signatories.  This is a long established practice of the Secretariat and the Working Group, which considered it best practice to capture this in the Financial Regulations.  
Regulation 45 has been expanded to reflect best practice on procurement as implemented by other 
international Organizations. 
 
Chapter XI - External Audit 
 Regulations 46 to 49 have been modified to better reflect the mandate of the External Audit, its 
selection process, the standards that it needs to follow and the reporting mechanism based on international standards on auditing.  Para 2 of Regulation 49 has been included in Regu lation 39 related to the review and approval of 
the audited financial statements and the External Audit report. 
  
Annexes 
As noted above, new Annexes have been created fo r: A) Administrative Me asures for Members and 
Observers in Arrears; and B) Guidelines on Voluntary Contributions, Gifts or Donations from Non-
Government Donors.   
 The Annex with Additional terms of reference govern ing External Audit has been deleted, on advice 
from the outgoing external auditors. The contents of this Annex are reflected in the International 
Standards on auditing referred to above under regulation 47 and were considered redundant by 
the External Auditor.  
4  OTHER ISSUES 
Treatment of the International Trade Centre (ITC) in the WTO’s accounts 
4.1.  The Working Group discussed the treatment of the ITC’s accounts in the WTO’s financial 
statements, as highlighted in the External Auditor’s observations on the WTO’s Financial 
Statements for the year ended 31 December 2013. The External Auditor “recommends that the WTO should: (i) adjust the financial statements of the ITC in order to bring them into line with its WT/BFA/W/344 
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  own accounting standards; (ii) use the equity method in reporting the ITC; and (iii) present all the 
information required under the Standards.” This was considered a “Priority 1” recommendation by the External Auditor and had led to a qualified audit report for the WTO’s financial statements for 2013. 
4.2.  The Working Group considered whether to propose formal guidance setting out the 
accounting treatment for ITC in the Financial Regula tions.  On balance, the Working Group decided 
against providing a strict definition of the necessary accounting treatment, as it felt that the 
accounting rules were adequately covered under IPSAS (see regulation 35).   
4.3.  The Working Group noted that the ITC’s accounts will be prepared under IPSAS for the first 
time for the financial year ending 31 December 2014 which should simplify the process somewhat. 
The WG urged the Secretariat to engage immediatel y with the ITC and the United Nations (as the 
other parent of the ITC), and with the new External Auditors, on the proposed consolidation 
treatment in the 2014 accounts with the objective of obtaining an unqualified External Audit 
opinion. 
Proposal for a WTO Audit Committee 
4.4.  The Working Group noted the suggestion by  the WTO’s Internal Auditor at the Committee 
meeting of 2
nd July 2014 to create a new WTO audit committee.  The Group considered that this 
suggestion fell outside of the scope of the Work ing Group’s work, but considered that it might 
merit further reflection and discussion within the Committee. 
Surplus Account 4.5.  As noted above, the Working Group did no t review the possible uses of the accumulated 
surpluses that existed at the time of this report, which it considered to be beyond the mandate of 
the Working Group.  The Working Group considered that the Committee might want to review further the possible approaches which might be taken with respect to the surplus. 
 
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Chapter I. Authority and Applicability  Regulation 1 
  These Regulations shall govern the financial administration of the World Trade Organization (WTO). 
 
Regulation 2 
 
 The Director-General shall be responsible for the implementation of 
these Regulations.  He may delegate to other officers of the WTO such authority as he considers necessary for the effective implementation of these Regulations.   
 
Regulation 3 
 
 Rules made by the Director-General in order to carry out the 
provisions of these Regulations shall be communicated to the General Council for approval.   
 
Regulation 4 
  These Regulations shall not be amended except by the General 
Council acting upon the advice of the Committee on Budget, Finance and 
Administration.    
 
 Chapter II.     Preparation Of The Budget Estimates  
 
Regulation 5 
  The WTO biennium shall consist of two consecutive financial 
periods covering each year of the biennium.  The financial period shall be 
from 1 January to 31 December.   
 Chapter I. Authority and Applicability 
 Regulation 1 
  These Regulations shall govern the financial administration of the World Trade Organization (WTO). 
 
Regulation 2 
 
 The Director-General shall be responsible for the implementation of 
these Regulations. He may delegate to other officers of the WTO such 
authority as he considers necessary for the effective implementation of these Regulations.   
 
Regulation 3 
 
 Rules made by the Director-General in order to carry out the 
provisions of these Regulations shall be communicated to the General Council for approval.   
 
Regulation 4 
  These Regulations shall not be amended except by the General 
Council acting upon the advice of the Committee on Budget, Finance and 
Administration (the Committee). The Committee shall review these 
Regulations at least every four years.  
 
 Chapter II.    Preparation of the Budget 
 
Regulation 5 
  The WTO biennium shall consist of two consecutive financial 
periods covering each year of the biennium.  The financial period shall be 
from 1 January to 31 December.   
   
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Regulation 6 
 
1. For each financial period, the Director-General shall prepare budget proposals containing estimates of the income and expenditure of the 
WTO.  These proposals, as well as any revisions for the second year of 
the biennium as may be necessary will be presented to the Committee on Budget, Finance and Administrati on, which will examine them and 
formulate a recommendation for consideration by the General Council.   
2. The estimates shall be expressed in Swiss francs.  
 
   
 
Regulation 7 
 
1. The proposed expenditure estimates shall be divided into parts and 
sections.  
2. The proposed expenditure estimates shall be accompanied by such 
information annexes and explanatory statements as may be requested by or on behalf of the General Council, and such further annexes or statements as the Director-General may deem necessary and useful. 
 
  
 
  
 
   
 
  
 Regulation 6 
 
For each financial period, the Director-General shall prepare a budget proposal containing estimates of the income and 
expenditure of the WTO, together with the comparable figures for 
the previous period.   
This budget proposal, as well as an y revisions for the second year 
of the biennium as may be nece ssary, will be presented to the 
Committee at least eight weeks prior to the last scheduled 
meeting of the year of the General Council.  
 The budget proposal and any proposed revisions to the budget shall be presented in Swiss Francs (CHF).  
 
Regulation 7 
 
The budget proposal shall present the breakdown of expected 
expenditure by key categories, such  as those for staff, temporary 
assistance, general services, trav el or capital expenditure.  
 
In addition, the budget proposal shall set out how the Secretariat intends deploying the budgeted resources to achieve the WTO’s objectives, showing, for illustrati ve purposes, the breakdown of 
expected expenditure by key output areas such as dispute 
settlement or technical assistance.  
The contribution to the budget of the International Trade Centre 
(ITC) shall be included as one category in the WTO budget proposal. The detailed ITC budget proposal as presented to the 
United Nations is presented as  a separate document and is 
subject to a specific recommendation by the Committee.   Expenditure specific to functionin g of the Appellate Body and its 
Secretariat shall be identified and subject to a specific 
recommendation by the Committee.    
   
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Regulation 8 
 1. Supplementary budget proposals for the current financial period 
may be submitted by the Director-General whenever necessary. 
 2. The Director-General shall prepare supplementary budget 
proposals in a form consistent with the approved budget.  These 
proposals shall follow the same examination and approval process as for the annual budget proposals.   
 
Regulation 9 
 The income estimates for each financial period shall consist of: 
 
  (a) a schedule of miscellaneous income showing for each item, in 
addition to the estimated amounts, the approved amount for the 
preceding financial period;  
 (b) a draft scale of contributions to be assessed on Members, 
showing for each Member, the proposed assessment and the contribution assessed for the preceding financial period
1. 
 
 The budget proposal shall show the maximum number of Full 
Time Equivalent (FTE) Posts in  each year of the biennium, 
together with anticipated changes in the distribution of the FTE Posts by grade and by division. 
 
The budget proposal  shall be accompanied by such information 
annexes and explanatory statements as may be requested by or on 
behalf of the General Council, and such further annexes or statements as 
the Director-General may deem necessary and useful.  
 
Regulation 8 
 1. Supplementary budget proposals for the current financial period 
may be submitted by the Director-General on an exceptional basis . 
 2. The Director-General shall prepare supplementary budget 
proposals in a form consistent with the approved budget.  These 
proposals shall follow the same examination and approval process as for the annual budget proposals.   
 
Regulation 9 
 The proposed budget expenditure shall be financed by income that 
shall consist of:  
  (a) Contributions from Members and Observers. A draft 
scale of contributions to be assessed shall be prepared in 
accordance with regulation 12; and  
 (b) Miscellaneous income, with an explanation of the source 
of each item of miscellaneous income.  These figures should be accompanied by the comparable figures 
for the prior period. 
                                               
1 The initial draft scale of contributions for the second financia l period of the biennium will be indicative, pending (i) any r evision which may be necessary for the second 
financial period and (ii) calculation of assessed contributions in accordance with Regulation 12.3(b).   
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Chapter III.    Adoption of the Budget 
 Regulation 10 
 
 The Director-General shall submit the budget estimates to the 
Committee on Budget, Finance and Admini s t r a t i o n  i n  t i m e  f o r  i t  t o  b e  
considered at its session in the Autumn preceding the biennium.  At the 
same time, these budget estimates shall be transmitted to all Members of 
the WTO.  The same procedure shall be applied to any revision for the second financial period of the biennium which would be presented to the 
Committee on Budget, Finance and Administration in sufficient time for it 
to be considered at a session in the Autumn preceding the second financial period of the biennium.  
Regulation 11 
 
 The Committee on Budget, Finance and Administration shall 
examine the budget estimates and prepare a report thereon which shall 
be submitted to the General Council for adoption.  
 
   
Chapter IV.    Collection of Funds 
 (a) Contributions From Members 
 
Regulation 12 
 
1. The expenses of the WTO shall be financed by contributions from 
Members and miscellaneous income.  The contributions shall be according to the scale of assessments determined by the General Council.  
 
2. The share to be contributed by each Member to the annual operating budget of the WTO shall be established on the basis of that 
country's (or separate customs territory's) international trade (imports Chapter III.    Adoption of the Budget 
 Regulation 10 
 
 The Committee shall examine the proposed budget and seek 
further explanations and amendments to the budget proposal as it deems necessary. Once the Committee has completed its 
examination, it shall prepare a report and a recommendation 
which shall be submitted to the General Council for adoption.  
 
  Regulation 11 
 The same procedure shall be applied to any revision for the second financial period of the biennium. The Director-General 
may submit a revised proposal for the second year of the 
biennium when there are exceptional and unexpected changes that could not have been foreseen at the time of the presentation 
of the budget proposal for the biennium. 
   
Chapter IV .    Contributions by Members and Observers  
  
 
Regulation 12 
 
1. The draft scale of contributions to be assessed to Members is 
established on the basis of each Member’s international trade  
(imports plus exports) in relation to the total international trade of all WTO Members. 
 
2. Calculations of assessed contributions for a given year shall 
be based on international trade stat istics over a five year period. 
E.g. the calculations of assesse d contributions for 2015 shall be   
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 PROPOSED REVISION 
 
plus exports) in relation to the total international trade of all WTO 
Members.   
3. (a) Calculations of assessed contributions for the years 2001, 
2002 and 2003 (which are prepared in the course of the respective previous year) shall be based on international trade statistics for the 
years 1996 1998, 1997 1999 and 1998 2000, respectively;  or, if these 
statistics are not available, for the last three years for which statistics are available.   
 
 (b) Calculations of assessed contributions for at least the following ten years, i.e.  2004, 2005, 2006 to 2013, (which are prepared in the course of the respective previous year) shall be based on 
international trade statistics:  for the years 1997 2001, 1998 2002, 1999 
2003, etc.  respectively;  or if these statistics are not available, for the last five years for which statistics are available. 
 
4. The statistics used shall relate to trade in goods
2, services and 
intellectual property rights as reported in Balance of Payments statistics 
from the International Monetary Fund (IMF);  with regard to services, the 
statistics shall relate to the definition of commercial services as applied in the WTO.  
 
5.  Where IMF data deviate from IMF guidelines and include transactions not related to goods, services or intellectual property rights, 
adjustments provided to the WTO by the Central Bank or the National 
Statistical Office of a Member shall be taken into account by the Secretariat when adequately documented and justified. 
 
 6. If IMF data are not available, the WTO Secretariat shall use estimates based on the best other available sources. 
 
 based on international trade statistics for the years 2008 to 2012; 
or if these statistics are not ava ilable, for the last five years for 
which statistics are available.  
 
3. The statistics used refer to trade in goods and commercial 
services, including intellectual pr operty rights payments, derived 
from the balance of payments st atistics of the International 
Monetary Fund (IMF). Data are based on the IMF's methodology 
as defined in its 5th edition of  the Balance of Payments Manual 
(BPM5) up to 2010 and as defined in the 6th edition of the 
Balance of Payments Manual (BPM6) as of 2011. 
   
 
  
 
4. Where IMF data deviate from IMF guidelines and include transactions not related to g oods, services or intellectual 
property rights, adjustments prov ided to the WTO by the Central 
Bank or the National Statistical Of fice of a Member shall be taken 
into account by the Secretariat when adequately documented and 
justified. 
 
5. If IMF data are not available, the WTO Secretariat shall use estimates based on the best other available sources. 
 
  
 
 6. A minimum contribution of 0.015 per cent of the total assessed 
contributions to all Members  shall be applied to those Members whose 
share in the total international trade of all WTO Members is less than 
0.015 percent. 
                                               
2 Excluding gold held as a store of value (deposit money banks).   
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7. A minimum contribution of 0.015 percent will be applied to those 
members whose share in the total international trade of all WTO Members is less than 0.015 percent.  
8. The contributions shall be assessed and paid in Swiss francs. 
 Regulation 13 
 1. After the General Council has adopted the budget for each financial period, the Director-General shall: 
 
 (a) transmit the relevant documents to the Members;  (b) inform the Members of their commitments in respect of contributions for the relevant financial period, and send a corresponding 
invoice; 
 (c) request the Members to remit their contributions.  
2. In accordance with Article VII, 4 of the Marrakesh Agreement 
Establishing The World Trade Organisation, Members have the obligation to contribute promptly to the WTO their share in the expenses of the 
WTO.  Contributions shall be considered as due and payable in full upon 
receipt of the invoice or on 1 January of the financial period to which they relate, whichever is later.  As of 1 January of the following calendar year the unpaid balance of such contributions shall be considered to be one 
year in arrears. 
 Regulation 14 
  The Director-General shall take appropriate action with a view to ensuring that Members pay their contributions promptly.  He shall report 
regularly to the Committee on Budget, Finance and Administration on the 
state of payment of contributions.   
Regulation 15 
 
 States or separate customs territories having the status of 
Observers may only accede to the WTO if their financial obligations as 7. The same minimum contribution shall also be assessed to 
Observers.  
  
8. The contributions shall be assessed and paid in CHF. 
 Regulation 13 
 1. After the General Council ha s adopted the budget and the 
scale of contributions, the Direct or-General shall promptly notify 
Members and Observers of their fi nancial obligations by providing 
an invoice and a statement of account.  
  
 
  
2. Members and Observers have the obligation to promptly pay their 
contributions.  Contributions shall be considered as due and payable in full upon receipt of the invoice or on 1 January of the financial period to 
which they relate, whichever is later.  As of 1 January of the following 
calendar year the unpaid balance of such contributions shall be considered to be one year in arrears.  
 
 Regulation 14 
  The Director-General shall take appropriate action with a view to ensuring that Members and Observers  pay their contributions promptly.  
The Secretariat shall report regularly to the Committee on the state of 
payment of contributions. Members and Observers with arrears shall 
be subject to Administrative Me asures as defined in Annex A.  
 
Regulation 15 
 
 Observers may only accede to the WTO Membership  if their 
contributions  as Observers have been fully paid.  New Members shall   
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 PROPOSED REVISION 
 
Observers have been fully discharged.  New Members shall be required to 
make a pro rata contribution for the year in which they become Members, after any relevant deduction of their assessment as Observer which shall also be calculated on a pro rata basis for that year.  New Members shall 
also be required to provide their proportion of the total advances to the 
Working Capital Fund; this advance shall be carried to the credit of the relevant Member.  Payments made by a Member shall be credited first to 
the Working Capital Fund and then to the contributions due. 
 Regulation 16 
  Any payment in respect of contributions made by a Member which has not paid in full its contribution for previous calendar years shall, unless the General Council decides otherwise, be credited against the 
earliest date of such arrears. 
 Regulation 17 
  A Provision for contributions in arrears shall be maintained.  It shall be funded through the Surplus Account. 
 
(b) Other income  Regulation 18 
 1. Except in so far as the General Council may decide otherwise, all income other than (a) contributions payable by Members, (b) interest 
earned by investing contributions received by the Secretariat and not 
required immediately, (c) income derived from investments of the Working Capital Fund and, (d) direct refunds of prior year's expenditure 
received during the current financial period, shall be classed as 
miscellaneous income.    2. For each full payment of an a nnual contribution between 1988 and 
1994, any Member with pre 1988 arrears and assessed at the minimum 
contribution in 1988 may cancel an equal number of assessments for 1987 and earlier years upon payment of the 1989 minimum contribution 
of Sw F 19,137.  The difference between an outstanding contribution for be required to make a pro rata contribution for the year in which they 
become Members, after any relevant deduction of their assessment as Observer which shall also be calculated on a pro rata basis for that year. 
 
New Members shall also be required to provide their proportion of the 
total advances to the Working Capital Fund; this advance shall be carried 
to the credit of the relevant Member.  Payments made by a Member shall be credited first to the Working Capital Fund and then to the 
contributions due. 
 Regulation 16 
  Any payment in respect of contributions made by a Member which has not paid in full its contribution for previous calendar years shall, unless the General Council decides otherwise, be credited against the 
earliest date of such arrears. 
 Regulation 17 
  A Provision for contributions in arrears shall be maintained.  It shall be funded through the Surplus Account. 
 
(b) Miscellaneous income  Regulation 18 
 1. Except in so far as the General Council may decide otherwise, all income other than (a) contributions payable by Members, (b) interest 
earned by investing contributions received by the Secretariat and not 
required immediately, and (c) income derived from investments of the Working Capital Fund shall be classed as miscellaneous income.   
 
   
 
  
   
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 PROPOSED REVISION 
 
pre 1988 and the amount of Sw F 19,137 shall be funded by 
miscellaneous income.     (c) Voluntary Contributions, Gifts or Donations 
 
Regulation 19 
 
1.   Voluntary contributions, gifts or donations may be accepted by the 
Director-General provided that the purposes for which the contributions are made are consistent with the policies, aims and activities of the WTO, 
and provided that the acceptance of such contributions which directly or 
indirectly involve additional financial liability for the WTO shall require the consent of the Committee on Budget, Finance and Administration.  
 
  
2. Moneys accepted for purposes specified by the donor shall be 
treated as trust funds or special accounts.  
 
   
 
  
 
 3. Moneys accepted in respect of which no purpose is specified shall 
be treated as miscellaneous income and reported as "gifts" in the 
accounts of the financial period.     
4. Money received by a staff Member as honoria in his/her official 
capacity shall be remitted to the Organization and be credited to the WTO Staff Assistance Fund. 
  
  (c) Voluntary Contributions, Gifts or Donations 
 
Regulation 19 
 
1. Voluntary contributions, gifts or donations from WTO Members and 
Observers may be accepted by the Director-General provided that the purposes for which the contributions are made are consistent with the 
policies, aims and activities of the WTO, and provided that the 
acceptance of such contributions which directly or indirectly involve additional financial liability for the WTO shall require the consent of the Committee .  Voluntary contributions, gifts or donations from Non-
Governmental Donors are subject to the additional guidelines laid 
out in Annex B.  
2. Moneys accepted for purposes specified by the donor shall be 
treated as trust funds. A standard overhead fee of up to 13% may 
be charged on direct expenditur e incurred by trust funds to 
reflect supporting services provided by the Secretariat. The 
standard overhead rate can be reduced when implementing partners are being used and when defined in the agreement signed with the donor.  The Programme Support Fund collects the 
overhead fees from all trust f unds and pays expenditure incurred 
to support the trust funds activities. The Programme Support Fund also releases a fee representing 10% of its expenditure to 
the WTO Secretariat that will reco rd it as miscellaneous income.  
 3. Moneys accepted in respect of which no purpose is specified shall 
be treated as miscellaneous income and reported as "gifts" in the 
accounts of the financial period.     
4. Money received by a staff Member as honoria in his/her official 
capacity shall be remitted to the Organization and be credited to the WTO Staff Assistance Fund. 
   
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5. Unless otherwise provided, such voluntary contributions, gifts or 
donations shall be administered in accordance with the present Financial Regulations.  
Chapter V.   Use of the Funds 
 Regulation 20 
  The adoption of a budget by the General Council shall constitute an authorization to the Director-General to incur obligations and make 
payments for the purposes for which the appropriations were voted and 
up to the amounts so voted.    Regulation 21 
  Appropriations shall be available for obligation during the financial period to which they relate. 
 
Regulation 22 
 
 Appropriations shall remain available for 12 months following the 
end of the financial period to which they relate to the extent that they are required to discharge obligations in respect of goods supplied and services rendered in the financial period and to liquidate any other 
outstanding legal obligation of the financial period.  The balance of the 
appropriations shall be surrendered by transfer to the Surplus Account.  
Regulation 23 
 
 At the end of the twelve month period provided in Regulation 22 
above, the then remaining balance of any appropriations retained shall be 
transferred to miscellaneous income.  Any unliquidated obligations of the financial period in question shall, at that time, be cancelled or, where the obligation remains a valid charge, transferred as an obligation against 
current appropriations. 
  
 5. Unless otherwise provided, such voluntary contributions, gifts or 
donations shall be administered in accordance with the present Financial Regulations.  
Chapter V.   Use of the funds 
 Regulation 20 
  The adoption of a budget by the General Council shall constitute an authorization to the Director-General to incur expenditure for the 
purposes for which the appropriatio ns were adopted and up to the 
amounts so adopted.    (Deleted) 
 
  
 
(Deleted)  
 
   
 
  
 
(Deleted)  
 
   
 
  
   
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Regulation 24 
 
 At the end of the financial period the Director General shall report on the transfers of credits between sections of the expenditure budget to 
the General Council for approval.  For items so identified by the 
Committee on Budget, Finance and Administration at the time of budget finalization, transfer shall not be permitted. 
 
Regulation 25 
 
 The Director General may enter into commitments for future 
financial periods, provided that such commitments:   (a)  are for activities which have been approved by the General 
Council and are expected to continue beyond the end of the current 
financial period;  or  
 
  
 
  (b) are authorized by specific decisions of the General Council.  
 
  
Chapter VI.    The Surplus Account 
 Regulation 26 
 1. Budgetary surpluses shall be tr ansferred to the Surplus Account 
pending decision by the General Council on their use.  
 
  
 Regulation 24 
 
 At the end of the financial period the Director-General shall report on the transfers of credits between se ctions of the expenditure budget to 
the General Council for approval.  For items so identified by the 
Committee at the time of budget finalization, transfer shall not be permitted. 
 
Regulation 25 
 
 The Director-General may enter into commitments for future 
financial periods, provided that such commitments:   (a)  are for normal ongoing activities  that are more 
effectively procured usin g a multi-year approach ;  Where the 
total expected value of multi- year contracts with a supplier 
exceeds CHF 2 million, the Director -General shall notify, as part 
of the quarterly financial reporting, these contracts to the 
Committee on Budget, Finance and Administration, including details of the goods or services procured and the likely amounts 
to be paid under the contract; or 
  (b) are authorized by specific decisions of the General Council.  
 
  
Chapter VI.    The Surplus Account 
 Regulation 26 
 1. Budgetary savings shall be transferred to the Surplus Account .
  
The budgetary savings is defined as the difference between 
approved budgeted and the corresponding actual expenditure as 
presented in the budget. The actual expenditure does not take 
into account the variations in the actuarial provisions for the long-term liabilities associated wi th staff pensions and after 
service health insurances if they have not be included in the   
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 2. Increases and decreases of the provision for contributions in arrears shall be effected by means of the Surplus Account. 
 
 3. If at the end of a financial period the Surplus Account shows a 
credit balance, the Director General shall make proposals to the 
Committee on Budget, Finance and Administration with regard to its use which may be: 
 
 (i) application as income against the budget for the second financial period following that in which the surplus occurs, thereby reducing Member's contributions; 
 
 (ii) transfer to the Working Capital Fund;  or  
 (iii) use for any other purpose decided upon by the General 
Council.  
4. A deficit in the Surplus Account at  the end of a financial period shall 
be covered, to the extent possible, by transfer from the Working Capital 
Fund.  Any part of the deficit left uncovered after transfer from the Working Capital Fund shall be included as an appropriate credit in the 
budget for the next earliest possible financial period.   
  
 
  
Chapter VII.    The Working Capital Fund 
 Regulation 27 
 
 The Working Capital Fund shall be constituted by: 
  (a) assessed advances made by Members.  Such sums shall be 
carried to the credit of the Members which have paid them; approved budget.  
 2. The difference between the approved budgeted and actual miscellaneous income as well as the variation of the provision for 
contributions in arrears shall also be transferred to the Surplus Account. 
 3. If at the end of a financial period the Surplus Account shows a 
credit balance, the Director-General shall make proposals to the 
Committee on Budget, Finance and Administration with regard to its use which may be: 
 
 (i) application as income against the budget for the second financial period following that in which the surplus occurs, thereby reducing Member's contributions; 
 
 (ii) transfer to the Working Capital Fund;  or  
 (iii) use for any other purpose decided upon by the General 
Council.  
4. A deficit in the Surplus Account at the end of a financial period 
shall be covered, to the extent possi ble, by transfer from the Working 
Capital Fund.  Any part of the deficit left uncovered after transfer from the Working Capital Fund shall be included as an appropriate credit in the 
budget for the next earliest possible financial period.   
  
 
  
Chapter VII.    The Working Capital Fund 
 Regulation 27 
 
 The Working Capital Fund shall be constituted by: 
  (a) assessed advances made by Members.  Such sums shall be 
carried to the credit of the Members which have paid them;   
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 (b) any sums which the General Council may cause to be paid 
into it from time to time.  Such sums shall be carried to the credit of the organization.  
Regulation 28 
 
 Any government acceding to th e WTO shall make an advance to 
the Fund in accordance with the scale of contributions applicable to the 
budget for the year of its accession.  The minimum advance to the Working Capital Fund amounts to 0.5 percent of the principal of the Fund 
for countries or separate customs territories whose share of the total 
trade of Members is 0.5 percent or less.  Regulation 29 
  The Director General is authorized to advance from the Working Capital Fund: 
 
 (a) such sums as may be necessary to finance budgetary appropriations pending receipt of contributions; 
 
 (b) in exceptional circumstances and subject to prior authorization of the General  Council, such sums as may be necessary to finance commitments relating to extraordinary expenditure. 
 
Regulation 30 
 
 Sums advanced under Regulation 29(a) above shall be reimbursed 
to the Working Capital Fund as soon as receipts from contributions are available for the purpose.  Sums advanced under Regulation 29(b) shall 
be reimbursed to the Working Capital Fund by including an appropriate 
credit in the budget for the next earliest possible financial period.    Regulation 31 
  The General Council may liberate all or part of the sums constituting the Working Capital Fund, and the sums so liberated in so far 
as they are derived from monies placed in the Fund under Regulation  (b) any sums which the General Council may cause to be paid 
into it from time to time.  Such sums shall be carried to the credit of the organization.  
Regulation 28 
 
 Any government acceding to th e WTO shall make an advance to 
the Fund in accordance with the scale of contributions applicable to the 
budget for the year of its accession.  The minimum advance to the Working Capital Fund amounts to 0.5 pe rcent of the principal of the Fund 
for countries or separate customs territories whose share of the total 
trade of Members is 0.5 percent or less.  Regulation 29 
  The Director-General is authorized to advance from the Working Capital Fund: 
 
 (a) such sums as may be necessary to finance budgetary appropriations pending receipt of contributions; 
 
 (b) in exceptional circumstances and subject to prior authorization of the General  Council, such sums as may be necessary to finance commitments relating to extraordinary expenditure. 
 
Regulation 30 
 
 Sums advanced under Regulation 29(a) above shall be reimbursed 
to the Working Capital Fund as soon as receipts from contributions are available for the purpose.  Sums advanced under Regulation 29(b) shall 
be reimbursed to the Working Capital Fund by including an appropriate 
credit in the budget for the next earliest possible financial period.    Regulation 31 
  The General Council may liberate all or part of the sums constituting the Working Capital Fund, and the sums so liberated in so far 
as they are derived from monies placed in the Fund under Regulation   
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27(a) shall be returned in Swiss francs to the Members which have 
contributed to the Fund in proportion to their respective shares in the Fund.  
Regulation 32 
 
 Subject to a decision of the General Council, countries or separate 
customs territories which for any reason cease to be Members of the WTO 
shall be entitled to the reimbursemen t of the total Swiss franc amount of 
their shares in the Working Capital Fund under Regulation 27(a). 
 
 Regulation 33 
 
 Interest accrued on the Working Capital Fund shall be added to the 
Working Capital Fund and carried to the credit of the Organization under Regulation 27(b) above. 
 
Chapter VIII.    Custody and Investment of Funds  
Regulation 34 
 
1. The Director General shall designate the bank or banks in which the funds of the WTO shall be kept. 
 
  
 
 2. The Director General may make non speculative short term 
investments of monies not needed for immediate requirements.  The 
investments of monies standing to the credit of any trust funds, reserve or special account shall be subject to any directives of the appropriate authority. 
 
  
 27(a) shall be returned in CHF to the Members which have contributed to 
the Fund in proportion to their respective shares in the Fund.   
Regulation 32 
 
 Subject to a decision of the General Council, countries or separate 
customs territories which for any reason cease to be Members of the 
WTO shall be entitled to the reimbursement of the total Swiss franc amount of their shares in the Working Capital Fund under Regulation 
27(a). 
 Regulation 33 
 
 Interest accrued on the Working Capital Fund shall be added to the 
Working Capital Fund and carried to the credit of the Organization under Regulation 27(b) above. 
 
Chapter VIII.    Treasury Management  
Regulation 34 
 
1. The Director-General shall establish clear and comprehensive financial rules related to treasury management activities engaged by the 
Secretariat. Funds retained by the Secretariat shall be securely kept or 
invested only with first class financial institutions.  
The Secretariat shall designate the ba nks in which the funds of the WTO 
shall be held. The Secretariat shall set crit eria for the selection of 
banks, including a minimum credit rating, and these criteria shall be included in the WTO’s Financial Rules. 
The Director-General shall not engage on any speculative 
activities such as on exch ange or interest rates. 
2. The investments of monies standing to the credit of any trust 
funds, reserve or special account shall be subject to any directives of the   
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3. The Director General shall include in the financial statements submitted to the General Council a statement of the investments currently held. 
 
 4. Income from investments shall be credited as provided in the rules 
or agreement relating to each fund or account. 
  
Chapter IX.    The Accounts 
 Regulation 35 
 
1. The Director General shall maintain such accounts as are necessary 
and shall prepare final accounts for the financial period on an accrual basis showing: 
 
 (a) the income and expenditure of all funds;  
 (b) the status of all appropriations, including: 
   (i) the original budget appropriations;     (ii) any supplementary appropriations; 
  (iii) the appropriations as modified by any transfers; 
  (iv) credits, if any, other than the appropriations voted by the General Council;   
  (v) the amounts charged against the appropriations;  and 
  (vi) the amounts charged against any other credit.  
 (c) statements of assets and liabilities at the close of the 
financial period.   He shall also give such other information as may be appropriate to 
indicate the current financial position of the WTO. 
  
 appropriate authority. 
 3. The Director-General shall include in the financial statements submitted to the General Council a statement of the investments 
currently held. 
 4. Income from investments shall be credited as provided in the rules 
or agreement relating to each fund or account. 
  
Chapter IX.    Financial Reporting 
 Regulation 35 
 
The financial statements of the Organization shall be 
prepared in accordance with th e International Public Sector 
Accounting Standards (IPSAS) applicable to the accounting 
period concerned. Any divergence  from the use of the specified 
standards shall be explained in the notes to the financial statements. 
 
   
 
  
 
  
 
   
 
  
   
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Regulation 36 
 
 Appropriate separate accounts shall be maintained in respect of all trust funds, reserves and special accounts. 
 
Regulation 37 
 
 The final accounts of the WTO shall be presented in Swiss francs.  
The accounting records may, however, be kept in such currency or 
currencies as the Director General may deem necessary.   
 
Regulation 38 
  The final accounts shall be submitted to the external auditor as 
soon as practicable following the end of the financial period to which they 
relate.  
Regulation 39 
 
 The Director General shall: 
 
(a) submit the final accounts and a financial report for the financial period and the external auditor's report thereon to the General Council as soon as practicable following the close of the financial period;  
(b) present before the end of each financial period of the biennium, a 
Budget Performance Report, providing information on the rate of expenditure during that financial period. 
 
Regulation 40 
 
 The final audited accounts shall be submitted to the General 
Council for approval.   
 
  
 Regulation 36 
 
 Appropriate separate accounts shall be maintained in respect of all trust funds, reserves and special accounts. 
 
Regulation 37 
 
 The accounts of the Organization shall be maintained and 
presented in CHF. Accounting records may, however, be recorded in both the transaction currency and the Swiss francs.   
 
Regulation 38 
  The Director-General shall subm it the financial statements 
of the WTO to the External Auditor no later than the 31 March 
after the close of the financial period.  
Regulation 39 
 
The report of the External Audi tor shall be transmitted to the 
Committee on Budget, Finance and Administration together with 
the audited financial statements. The Committee on Budget, Finance and Administration shall examine the financial 
statements and the audit report with a view to making a 
recommendation to the General Council to approve the financial 
statements.  
 
Regulation 40 
 
The Director-General shall  also provide to the Committee : 
 
(a) Quarterly reports on the financial position and 
performance of the Organisati on, no later than six weeks 
following the end of the financial period concerned.  The 
Quarterly reports shall include information on the financial performance of the Organisation  by activity (for example, 
technical assistance or dispute settlement).   
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 Chapter X.    Internal Control 
 
Regulation 41 
 
 The Director General shall: 
  (a) establish detailed financial rules and procedures in order to ensure effective financial administration and the exercise of economy;   
 
 (b) cause all payments to be made on the basis of appropriate supporting documents and other documents which ensure that the 
services or goods have been received and that payments have not 
previously been made;  
 (c) designate the officers who may receive monies, incur 
obligations and make payments on behalf of the WTO;   (d) maintain an internal financial control which shall provide for 
an effective current examination and/or review of financial transactions in 
order to ensure:  
 
  
 
  (i) the regularity of the receipt, custody and disposal of all funds and other financial resources of the WTO;   (ii) the conformity of obligations and expenditures with the 
appropriations or other financial provisions voted by the General Council, 
or with the purposes and rules relating to trust funds and special accounts; 
  (iii)  the economic use of the resources of the WTO. (b) Annual reports on Human Resources with details on 
evolution of the grade struct ure, salary adjustments and 
employee benefits, diversity of staff, internal mobility of staff and external recruitment activities, andlearning and 
development.    
 Chapter X.    Internal Control 
 
Regulation 41 
 
 The Director-General shall: 
 (a) establish an effective system of risk management to identify 
and address internal and external risks to the Secretariat;   
 
(b) establish detailed financial rules and procedures in order to ensure effective financial administration and the exercise of economy;   
 
 (c) cause all payments to be made on the basis of appropriate supporting documents and other documents which ensure that the 
services or goods have been received and that payments have not 
previously been made;   (d) designate the officers who may receive monies, incur 
obligations and make payments on behalf of the WTO. All payments 
shall require a minimum of two signatories ; 
 
 (e) maintain an internal financial control which shall provide for 
an effective current examination and/or review of financial transactions in order to ensure: 
 
  (i) the regularity of the re ceipt, custody and disposal of 
all funds and other financial resources of the WTO;   (ii) the conformity of obligations and expenditures with 
the appropriations or other financial provisions voted by the General 
Council, or with the purposes and rules relating to trust funds and special accounts; 
  (iii)  the economic use of the resources of the WTO.   
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Regulation 42 
 
 Commitments or obligations shall not be incurred and payments shall not be made unless an approp riate authorization has been made 
under the authority of the Director General. 
 Regulation 43 
  The Director General may, on an exceptional basis, make such ex gratia payments as he deems to be necessary in the interests of the 
WTO.  A statement of such payments shall be submitted with the final 
accounts.  Regulation 44 
  The Director General may, after full investigation, authorize the writing off of losses of cash, supplies, equipment and other assets, other 
than arrears of contributions.  A statement of all such losses written off 
during the financial period shall be submitted to the external auditor with the final accounts.   
 
Regulation 45 
  The Director General shall establish rules for the procurement of 
equipment, supplies and other requirements, including rules governing 
the invitation of tenders.    
 
  
 
   
 
  
 Regulation 42 
 
 Commitments or obligations shall not be incurred and payments shall not be made unless an appropriate authorization has been made 
under the authority of the Director-General. 
 Regulation 43 
  The Director-General may, on an exceptional basis, make such ex gratia payments as he deems to be necessary in the interests of the 
WTO.  A statement of such payments shall be submitted with the final 
accounts.  Regulation 44 
  The Director-General may, after full investigation, authorize the writing off of losses of cash, supplies, equipment and other assets, other 
than arrears of contributions.  A statement of all such losses written off 
during the financial period shall be submitted to the external auditor with the final accounts.   
 
Regulation 45 
  The Director-General shall establish rules for the 
procurement function. The procurement function includes all 
actions necessary for the acquisitio n ,  b y  p u r c h a s e  o r  l e a s e ,  o f  
property, including products and real property, and of services, 
including works. The following ge neral principles shall be given 
due consideration when exercising the procurement function of the WTO: 
 
a. Efficient and effective use of  the Organization's resources. 
b. Non-discriminatory, fair, open competition and equal  opportunity for vendors. 
c. Transparency. 
d. Best value for the money in terms of quality and price. e. Accountability. 
   
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 Chapter XI.    External audit 
 
Regulation 46 
 
1. The General Council shall appoint an external auditor to perform 
the audit of the accounts of the WTO.   
 
2. The external auditor shall be the Auditor General (or officer holding the equivalent title) of a Member of the WTO or another person of high 
competence. 
 3. The external auditor shall not be removed during his tenure of 
office except by the General Council. 
   
 
  
 
  
Regulation 47 
 
1. The audit shall be conducted in conformity with generally accepted common auditing standards and, subject to any special directives of the 
General Council, in accordance with the additional terms of reference set 
out in the Appendix to these Regulations.  
  Tenders for equipments, supplies and other requirements 
shall be invited by a recognized method of solicitation, except 
where the Director-General deems that, in the interest of the WTO, a departure from this regulation is desirable. 
 
 Chapter XI.    External audit 
 
Regulation 46 
 
1. The General Council shall appoint an External Auditor to 
perform the audit of the financial statements of the WTO and of its Pension Plan in accordance wi th Regulation 47  for a six-year 
period non-renewable. 
 
2. The External Auditor shall be  the Supreme Audit Institution of 
a Member of the WTO.  
 
3. The Committee on Budget, Fina nce and Administration shall 
organize an open invitation to bid, define selection criteria, 
examine offers received and make a recommendation to the 
General Council to approve the appointment of a new External Auditor before the end of the mandate of the current External Auditor. 
 
4.  The external auditor shall not be removed during his tenure of office except by the General Council. 
 
  
Regulation 47 
 
1. The External Auditor shall be required to audit the WTO and 
the WTO’s Pension Plan financial statements  in accordance with 
INTOSAI Auditing Standards an d other generally accepted 
international standards such as the International Standards on Auditing issued by the International Federation of Accountants 
and express an opinion thereon. The External Auditor shall be   
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  2. The external auditor may make observations with respect to the 
efficiency of the financial procedures, the accounting system, the internal 
financial controls and, in general, the administration and management of the WTO.   
 
3. The external auditor shall be completely independent and solely responsible for the conduct of the audit. 
 
 4. The General Council may request the external auditor to perform certain specific examinations and issue separate reports on the results. 
 
Regulation 48 
 
1. The Director General shall provide the external auditor with the 
facilities he may require in the performance of the audit.  
2. For the purpose of making a local or special examination or of 
effecting economies of audit cost, the external auditor may in consultation with the Director General engage the services of any national Auditor General (or officer holding the equivalent title) or commercial 
public auditors of known repute or any other person or firm who, in the 
opinion of the external auditor, is technically qualified.  
Regulation 49 
 
1. The external auditor shall issu e a report on the audit of the 
financial statements and relevant schedules reflecting the position of the 
final accounts for the biennium which shall include such information as he deems necessary in regard to matters referred to in Regulation 47, paragraph 2, and in the additional terms of reference. 
 
 2. The external auditor's report shall be submitted to the General 
Council, through the Committee on Budget, Finance and Administration, required to conduct itself in conformity with the INTOSAI Code of 
Ethics and other generally acce pted professional standards. 
 2. The mandate of the External Auditor shall comprise regular 
and performance audits as defi ned by the INTOSAI Auditing 
Standards.    
 
3. The External Auditor shall be completely independent and solely responsible for the conduct of any audit that it undertakes.  
 
 4. The General Council may request the external auditor to perform certain specific examinations and issue separate reports on the results. 
Regulation 48 
 
The Director-General shall provide the external auditor with the facilities 
he may require in the performance of the audit. 
 
In the event of a disagreement betw een the Director-General and the 
external auditor on the facilities to  be provided, the Director-General 
should seek guidance from the General Council.   
 
  
Regulation 49 
 
The External Auditor shall issue an annual report on the audit of 
the financial statements to the Committee on Budget, Finance and 
Administration in a timely manner. The External Auditor may also 
report to the Committee on Budget, Finance and Administration on 
financial issues, on performance audits and/or special reports on any 
issue deemed of significance by the Ex ternal Auditor, or any issue raised 
by the General Council in accordance with Regulation 47.  The external auditor's report shall be submitted to the General Council, 
through the Committee on Budget, Finance and Administration, together   
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together with the audited financial statements.  The Committee on 
Budget, Finance and Administration shall examine the financial statements and the auditor's report and shall forward them to the General Council with such comments as it deems appropriate. 
 
  
APPENDIX TO THE FI NANCIAL REGULATIONS 
 Additional terms of reference governing external audit 
 
 1. The external auditor shall perfor m such audit of the accounts of the 
WTO, including all trust funds and special accounts, as he deems 
necessary in order to satisfy himself that: 
  (a) the financial statements are in accord with the books and 
records of the WTO; 
  (b) the financial transactions reflected in the statements have 
been in accordance with the rules and regulations, the budgetary 
provisions and other applicable directives;   (c) the securities and moneys on deposit and on hand have been 
verified by certificate received direct from the WTO's depositories or by 
actual count;  
 (d) the internal controls are adequate; 
  (e) procedures satisfactory to the external auditor have been 
applied to the recording of all assets, liabilities, surpluses and deficits. 
 2. The external auditor shall be the sole judge as to acceptance in whole or in part of certifications and representations by the Director 
General and may proceed to such detailed examination and verification as 
he chooses of all financial records, including those relating to supplies and equipment. 
 with the audited financial statements.  The Committee on Budget, 
Finance and Administration shall examine the financial statements and the auditor's report and shall forward them to the General Council with such comments as it deems appropriate.   
 
  
 
ANNEX A 
 
ADMINISTRATIVE MEASURES FOR MEMBERS AND OBSERVERS IN 
ARREARS 
 
 
Cat
ego
ry Administrative Measures 
I After one but less than two full year's  assessed 
contributions remain outstanding at the end of the year: 
1. Representatives of Members will not be nominated to 
preside over WTO bodies  
2. Documentation will not be posted to delegations in 
Geneva nor to the Members' and Observers' capitals. 
3. At the beginning of each year, the Director-General 
will notify the Ministers of the Members and Observers   
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3. The external auditor and his staff shall have free access at all 
convenient times to all books, records and other documentation which are, in the opinion of the external auditor, necessary for the performance of the audit.  Information classified as confidential shall be made 
available on application.  The external auditor and his staff shall respect 
the confidential nature of any information so classified which has been made available and shall not make use of it except in direct connection 
with the performance of the audit. 
 4. The external auditor shall have no power to disallow items in the 
accounts but shall draw to the attention of the Director General for 
appropriate action any transaction concerning which he entertains doubts as to legality or propriety.  Audit objections, to these or any other transactions, arising during the examination of the accounts shall be 
immediately communicated to the Director General. 
 5. The external auditor shall express and sign an opinion in the 
following terms:  "I have examined the financial statements numbered ... 
 
to ...  and relevant schedules of the WTO for the financial period ended 
3 1  D e c e m b e r  . . . .   M y  e x a m i n a t i o n  i n c l u d e d  a  g e n e r a l  r e v i e w  o f  t h e  
accounting procedures and such tests of the accounting records and other 
supporting evidence as I considered necessary in the circumstances."  
The external auditor's opinion shall state, as appropriate, whether:  
 (a) the financial statements present fairly the financial position 
as at the end of the period and the results of the operations for the period; 
 
 (b) the financial statements were prepared in accordance with the stated accounting principles; 
 
 (c) the accounting principles were applied on a basis consistent with that of the preceding financial period;  
 (d) transactions were in accordance with the Financial responsible for the WTO of the applicable 
administrative measures. 
4. The Director-General will contact annually the Minister 
of the Members' and Observers' responsible for the 
WTO, or any other official at the appropriate level 
emphasizing the question of arrears. 
5. The Secretariat will report annually to the Committee 
on Budget, Finance and Administration on the 
implementation of administrative measures. 
6. Members and Observers will be subject to specific 
reporting  at the General Council meetings.
3 
II After two but less than three full year's  assessed 
contributions remain outstanding at the end of the year, in 
addition to the measures of Category I: 
1. The access of the WTO Members' web site will be 
discontinued.4 
2. The ability of Members to act on the recommendations 
by the Committee on Budget, Finance and Administration to the General Council on financial 
matters will be removed. 
3. Observers will be denied access to training or technical 
assistance. 
4. The Chairs of the accession working group of 
Observers will remind the delegation of Observers, during their working group meeting, of their financial obligations. 
III After three full year's  assessed contributions remain 
outstanding at the end of the year, in addition to the measures 
of Categories I and II: 
1. Members and Observers will be designated as Inactive 
Members and Inactive Observers, respectively. 
2. Inactive Members will be denied access to training or 
technical assistance other than that necessary to meet 
                                               
3 See General Council procedures.  
4 Applicable to Members and Observers. Unde r current policy, Observers have a differentiated access to documents posted on the Me mbers' Website.    
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Regulations and legislative authority. 
 6. The report of the external auditor to the General Council on the financial operations of the period should mention: 
 
(a) the type and scope of his examination;  
(b) matters affecting the completeness or accuracy of the accounts, 
including where appropriate:  
 (i) information necessary to the correct interpretation of the 
accounts;  (ii) any amounts which ought to have been received but which have not been brought to account; 
 (iii) any amounts for which a legal or contingent obligation exists 
and which have not been recorded or reflected in the financial statements; 
 (iv) expenditures not properly substantiated; 
 (v) whether proper books of accounts have been kept;  (vi) any deviations of a material nature in the presentation of 
financial statements from generally accepted accounting principles 
applied on a consistent basis;   (c) other matters should be brought to the notice of the General 
Council, such as: 
   (i) cases of fraud or presumptive fraud; 
  (ii) wasteful or improper expenditure of the WTO's money 
or other assets (notwithstanding the accounting for the transaction may be correct); 
  (iii) expenditure likely to commit the WTO to further outlay 
on a large scale;   (iv) any defect in the general system or detailed regulations governing the control of receipts and disbursements or of 
supplies and equipment; 
  (v) expenditure not in accordance with the intention of the their WTO Article XIV-2 obligations. 
3. The accession working groups do not meet either 
formally or informally.  WTO will suspend its request 
for annual contributions from Inactive Observers.  Request for annual contributions will resume the year the Observers are not anymore designated as 
Inactive.
5 
4. Inactive Members and Observers taking the floor in 
the General Council will be identified as such. 
 
GENERAL COUNCIL PROCEDURES FOR MEMBERS AND OBSERVERS  
SUBJECT TO ADMINIST RATIVE MEASURES 
 
 
At the beginning of each calendar year,  the Committee on 
Budget, Finance and Administration will notify to the General Council the 
list of Members and Observers under Administrative Measures, with a recommendation that these Members and Observers be urged to 
liquidate their arrears. 
 
At the end of each meeting of the General Council , the 
Chairman of the Committee on Budget, Finance and Administration will 
provide information with regard to which Members and Observers are under Administrative Measures. The Chairman of the General Council will request Members and Observers in Categories II and III to inform the 
Secretariat as to when the payment of arrears may be expected. 
 
Each year  the Director-General will report on the results of his 
contacts with Members’ and Observers’ authorities on the issue of 
arrears.  
 
* * * * * * * 
 
                                               
5 To be enforced starting 1 January 2013.    
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General Council after making allowance for duly authorized transfers 
within the budget;   (vi) expenditure in excess of appropriations as amended by duly authorized transfers within the budget; 
  (vii) expenditure not in conformity with the authority which 
governs it;  
 (d) the accuracy or otherwise of the supplies and equipment 
records as determined by stocktaking and examination of the records;  
 (e) where appropriate, transactions accounted for in a previous 
financial period concerning which further information has been obtained or transactions in a later financial period concerning which it seems desirable that the General Council should have early knowledge. 
 
7. The external auditor may make su ch observations with respect to 
his findings resulting from the audit and such comments on the Director 
General's financial report as he deems appropriate to the General Council 
and to the Director General.  
8. Whenever the external auditor's scope of audit is restricted, or he 
is unable to obtain sufficient evidence, he shall refer to the matter in his opinion and report, making clear in his report the reasons for his comments and the effect on the financial position and the financial 
transactions as recorded. 
   
9. In no case shall the external auditor include criticism in his report 
without first affording the Director General an adequate opportunity of explanation on the matter under observation. 
 
10. The external auditor is not required to mention any matter referred to in the foregoing which, in his opinion, is not material.  
  
SPECIAL PROVISIONS FOR THE SUSPENSION OF 
ADMINISTRATIVE MEASURES  
FOR INACTIVE MEMBERS AND OBSERVERS 
 
 
The General Council can suspend the application of 
Administrative Measures for Members in Category III which agree to, and 
abide by, a defined schedule of instalment payments aimed at liquidating all arrears.
6 
 
Those Members with pre-1988 arrears that were assessed at the 
minimum contribution may benefit from a reduction in those arrears to the level of the 1989 minimum contribution. For each full payment of an 
annual contribution between 1988 an d 1994, any contracting party with 
pre-1988 arrears may cancel an equal number of assessments for 1987 and earlier years upon payment of the 1989 minimum contribution 
amounting to CHF 19,137. The difference between a pre-1988 
assessment and the payment of CH F 19,137 would be funded by the 
Miscellaneous Income of the WTO.
7 
 
The General Council can suspend the application of 
Administrative Measures for Observers that are in Category III on 1 January 2013, which agree to, and abide by, a defined schedule of 
installment payments aimed at liquidating all arrears.  
 
ANNEX B 
 
VOLUNTARY CONTRIBUTIONS, GIFTS OR DONATIONS FROM 
NON-GOVERNMENTAL DONORS 
 
Given that voluntary contributions, gifts or donations (hereafter 
                                               
6 Amend earlier decisions of the General Council in 1988 (C/M/226) and 1994 (C/M/273) to reflect the reduced number of categorie s. 
7 As approved by the General Council in 1994 (C/M/273).   
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 PROPOSED REVISION 
 
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 "donations") from non-governmental do nors could be of benefit and since 
Members are committed to ensuring that no conflict of interest should arise through the acceptance of such donations, it is herein affirmed that the process with regard to such donations will be governed by the 
following guidelines. 
 
1. Donations proposed by private in dividuals and non-governmental, 
non-profit organizations or foundations (non-governmental donors) 
may be considered. These may include donations of goods or services "in kind"; however, secondment of staff from non-governmental 
donors to the WTO is prohibited. 
2. Donations from non-governmental donors which are for-profit 
organizations or companies shall not be accepted. 
3. The activities, aims and motivations of the non-governmental donors 
mentioned under 1 above shall not be incompatible with the policies, 
aims and activities of the WTO and, as mentioned above, shall not give rise to a conflict of interest. 
4. While non-governmental donors shall be encouraged to make 
donations to the Doha Development Agenda Global Trust Fund at large, the donor may specify one or more activities associated with 
WTO programs as the purpose of the donation. 
5. All proposed donations from non-governmental donors shall be 
notified to the Committee on Budget, Finance and Administration which shall promptly consider the proposals. The Director-General 
shall accept a proposed donation only after the Committee has 
approved the proposed donation and its intended use(s). It is recognized that the Committee may wish to consider establishing a 
subsidiary working group to make recommendations to it relative to 
proposed donations. 
6. The notification shall include full details regarding the activities, aims 
and motivations of the non-governmental donors mentioned under 1 
above and the intended uses(s) of the donation. 
7. All accepted donations from non-governmental donors shall be placed 
in a trust fund and be disbursed in a manner that takes into account   
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the broad objectives of the Committee on Trade and Development, the 
Memorandum of Understanding Establishing the Global Trust Fund and any additional modalities to be established for the purpose of disbursing the resources of the trust fund. 
8. Donations shall not entitle non-governmental donors to use of the 
WTO name or logo in any way. Full details relative to all accepted donations from non-governmental donors and their uses shall be 
included in the Director-General’s Budgetary and Financial Report on 
extra-budgetary funds. 
9. Information with regard to accepted donations shall also be made 
available on the WTO Website in order to ensure transparency. 
 
 
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