WORLD TRADE  
ORGANIZATION  RESTRICTED 
WT/BFA/W/274 
11 September 2012 
 (12-4870) 
Committee on Budget, Finance and Administration  
  
 
REPORT BY THE CHAIR OF THE WORKING GROUP ON 
ADMINISTRATIVE MEASURES 
 
 
I. CREATION OF THE WORKING GROUP 
1. On 11 May 2009 the Budget Committee, having note d that there continued to be a persistent 
problem of accumulation of arrears which had imp lications for all Members in the annual financial 
accounts of the Organization, established the Working Group on Administrative Measures with the mandate "to review the Administrative Measure s applicable to Members with outstanding 
contributions and to consider the outstanding dues from Observers."  The last review of 
Administrative Measures was conducted pursuan t to a decision by the General Council 
of 15 May 2006.  2. While participation in the Working Group w as open to all Members in the Committee on 
Budget, Finance and Administration, the Chair of the Committee noted that "Members interested in 
joining the Working Group were invited to contact [her]". 
 
3. The Working Group met for the first time on 8 July 2009, and has held ten other successive 
sessions. 
II. FIRST ROUND OF CONSULTATIONS 
4. In the autumn of 2009, I began a series of cons ultations with the Heads of each one of the 
missions of Members with outstanding contributions, w ith three main objectives in mind:  (i) to obtain 
a better understanding of their situation and their poi nt of view;  (ii) to explore the short-term 
prospects of finding a rapid way out;  (iii) to encour age delegations to contact the Secretariat in order 
to: 
(a) Improve the coordination of information a nd raise the awareness of their competent 
central authorities;  and 
 
(b) consider the possibility of drawing up a payment plan to ensure that the 
Administrative Measures are rapidly lifted. 
5. These contacts also enabled me to look at how these Administrative Measures were perceived 
by the Members concerned.  I also approached th e representatives of a few Observer States, five of 
which had two or more years of arrears. 
 
6. Payment plan:  You will recall that on 15 May 2006, the General Counc il adopted, alongside 
the revision of the Administrative Measures, a recommendation that the Committee on Budget, 
Finance and Administration be authorized "to suspen d the application of Administrative Measures for 
Members in Category IV which agree to, and abide by, a defined schedule of instalment payments 
aimed at liquidating all arrears".  The purpose of th is measure was to introduce enough flexibility to 
enable all of the countries of Category IV to restor e their situation.  The first payment plan, which WT/BFA/W/274 
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  concerned Gabon, was approved by the General Council on 26 May 2009.  Since then, 12 other 
Members have agreed on payment plans with the WTO. 
III. WORK OF THE WORKING GROUP:  REVIEW OF THE SYSTEM OF 
ADMINISTRATIVE MEASURES 
7. The Working Group proceeded, in turn, to:  (i ) assess the situation;  (ii) evaluate the 
Secretariat's implementation of the system of Administrative Measures;  (iii) examine the different 
options for improving the system. 
A. A
SSESSMENT OF THE SITUATION  
8. The Working Group found that the different situa tions varied considerably in terms of years 
of arrears, level of develo pment and economic dimension. 
 
9. In June 2009, 22 Members had from two to 40 years of arrears.  Total arrears amounted 
to CHF 14.5 million.  Among the countries designate d as Inactive, the Working Group pointed to the 
particular case of five Members which had not once paid their contribution since their accession to the 
multilateral trading system.  And yet, some of these Members were not in arrears in the 
United Nations system. 
 10. At the same time, 12 Observers had in some cases up to ten years of arrears, accumulated 
arrears stood at 1.4 million, and five Obser vers had never paid their contribution. 
 11. In the course of my consultations, Members w ith outstanding contributions attributed the 
situation to different factors:  for some, it was due to political instability, for most of them, to 
persistent budgetary constraints, and in some c ases, to the lack of visibility of the GATT and 
subsequently the WTO in their respective capitals, fo r which there were various  explanations.  This 
lack of visibility had been aggravated in the past by the prolonged absence of any diplomatic 
representation in Geneva (in 2009, four of the 22 Members with outstanding co ntributions still had no 
diplomatic representation). 
 12. For the WTO, this situation posed two types of problem, one of them financial and the other a 
problem of good governance. 
B. E
VALUATION OF THE IMPLEMENTATION OF THE SYSTEM OF ADMINISTRATIVE MEASURES  
13. The Working Group examined all of the measur es adopted by Members in 2006 on the basis 
of oral reports by the Secretariat describing the way in which the current system was implemented.  
A number of inconsistencies and shortcomi ngs were found, and progressively corrected. 
C. E XAMINATION OF THE DIFFERENT OPTIONS FOR IMPROVING THE SYSTEM  
14. Finally, the Working Group considered various ways of improving the system currently in 
force. 
 
15. The Working Group began by studying contextual aspects, such as the Administrative 
Measures applied in other international or ganizations, above all the United Nations. 
 16. Adopting an iterative approach, the Group then began to draw up a draft proposal for a new 
system of Administrative Measures.  In doing so , the members of the Working Group:  (i) largely 
preserved the existing measures while trying to simplify them;  (ii) added new measures where  WT/BFA/W/274 
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  needed;  (iii) extended the measures to Observers.  It should be noted that in his successive reports, 
the auditor regularly raised the issue of the outstanding contributions of Observer States. 
 17. In order to ensure that we were able to fi nd a solution with which all Members could be 
comfortable, I began a second round of consultati ons starting in September 2010, i.e. before the 
completion of the draft proposal for a system of  Administrative Measures.  I approached each 
coordinator of the regional groups (African Gr oup, LDCs, ACP, GRULAC, the Informal Group of 
Developing Countries) to inform them of the ongoing work, the objectives pursued by the Working Group and the main features of the forthcoming draft. 
IV. PRESENTATION OF THE PROPOSED  SYSTEM OF ADMINISTRATIVE 
MEASURES 
18. The Working Group has prepared the draft Ad ministrative Measures annexed hereto.  These 
draft measures seek to: 
19. -  Preserve what already exists :  none of the measures already in place have been left out.  
Changes have been made to the word ing and content of certain measures. 
20. -  Simplify the system with a view to making it more understandable , by grouping 
together certain categories and measures. 
It is proposed that Category I (one full year 's assessed contributions) and Category II (more 
than one but less than two full years' assessed cont ributions) be merged.  This will make the system 
easier to understand:  Category I will cover assessed contributions for at least one full year but less 
than two years, while Category II will cover assessed contributions for at least two full years but less 
than three years, etc. 
It is also proposed that all General C ouncil procedures be grouped into one Annex. 
21. -  Strengthening of the role of the Director-General , who notifies the measures, at the 
beginning of each year, to the ministers of the Members and Observers in arrears, contacts these Ministers at least once a year, and prepares an annual report for Members. 
22. -  Extending to Observers the Administra tive Measures applicable to Members so as to 
encourage future Members to apply best practices as regards financial contribu tions in relation to the 
Organization. 
23. -  A graduated approach .  The Working Group ensured that the system provided for a 
graduated approach according to category, with a progressively stronger message at each stage, both 
for Members, as is already the case under the current system, and for Observers. 
24. The Working Group has also made provision for the introduction of new measures , two of 
which are specific to Observers .  The following are proposed: 
25. -
  A notification mechanism .  "At the beginning of each year, the Director-General will 
notify  the Ministers of the Members and Observers responsible for the WTO of the applicable 
Administrative Measures", as of classification in Category I. 
26. -  A transparency measure .  "The Secretariat will report annually to the Committee on 
Budget, Finance and Administration on the implementation of Administrative Measures." 
 WT/BFA/W/274 
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  27. -  Involvement of the Chairs of accession working groups .  "The Chairs of the accession 
working group of Observers will remind the delega tion of Observers, during their working group 
meeting, of their financial obligations ", as of classification in Category II. 
28. -  A package of two measures for Observers in Category III (Inactive) .  "The accession 
working groups do not meet either formally or in formally.  The 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." 
29. In this situation, given that Observers w ould no longer receive any services from the WTO 
(documents, technical assistance, working group me etings) or, of course, any benefits arising from 
membership in the multilateral trading system, it is proposed that requests for annual financial 
contributions be suspended. 
30. An acceding country's debt to the WTO would therefore automatically be limited to 
three annual instalments, which would facilitate its return to a normal situation.  The status of 
Category III Observers (Inactive) would in no way be legally affected. 
31. As a transitional measure, and in order to facilita te the reduction of their debt, Observers that 
are in Category III as of 1 January 2013 may agree on a payment plan with the WTO. 
32. Lastly, a transition period of several months, un til 1 January 2013, is proposed as part of this 
package of specific Administrative Measures (suspens ion of meetings, suspension of the request for 
contributions), thus enabling everyone to adjust to the new situation. 
33. The Working Group finalized its proposed system of Administrative Measures 
on 18 November 2010.  The time-frames set fo rth therein were updated by the Working Group 
on 8 February 2012. 
V. FINAL CONSULTATIONS 
34. After the Working Group had finalized these draft measures, I began a third round of 
consultations, not only with regional group coordi nators, but also, in a few group sessions, directly 
with the representatives of a regional group, in order to explain in more detail the new provisions and 
the drafters' reasoning, and to hear and res pond to their comments, views and suggestions.  
35. The Working Group met on 11 September 2012.  All Members were invited to this meeting to 
review the draft report one last time.  None of the delegations present at the meeting expressed any 
reservations or objections.  Consequently, the Work ing Group concluded its work with a consensus, 
and is now ready to submit its conclusions and recommendations to the Committee on Budget, 
Finance and Administration. 
36. On behalf of the Working Group, I would lik e to take this opportunity to thank the 
Director-General and the Secretariat for the efforts made over the last few years, which have led to a 
significant reduction in the number of Members and Ob servers in arrears and improved the situation, 
notably thanks to the Director-Gen eral's intervention at the approp riate level.  The commitment and 
actions of the Director-General go hand in hand with a suitable system of Administrative Measures 
that specifically draws the attention of the capitals to  the arrears situation:  combined action is of key 
importance and makes it possible to move away from the previous system. 
37. In conclusion, I would like to thank the coordina tors of the regional groups and the delegates 
who participated in this Working Group's consulta tions and discussions for their time, their active 
involvement and their contributions.  WT/BFA/W/274 
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  38. The following recommendation is prop osed to the Committee for approval: 
The Committee recommends to the General Co uncil that the revised Administrative 
Measures appearing in annex hereto be implemented as from 1 January 2013. 
_______________ 
  WT/BFA/W/274 
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  ANNEX 1 
 
ADMINISTRATIVE MEASURES FOR MEMBERS AND OBSERVERS IN ARREARS 
--- DRAFT AMENDMENTS --- 
 
 
Category 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 delega tions in Geneva nor to the Members' 
and Observers' capitals. 
3. At the beginning of each year, the Direct or-General will notify the Ministers of 
the Members and Observers 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.1 
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.2 
2. The ability of Members to act on the recommendations by the Committee on 
Budget, Finance and Administration to th e 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 work ing 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 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.
3 
4. Inactive Members and Observers taking th e floor in the General Council will be 
identified as such. 
 
                                                      
1 See General Council procedures.  
2 Applicable to Members and Observers. Under current  policy, Observers have a differentiated access 
to documents posted on the Members' Website.  
3 To be enforced starting 1 January 2013.   WT/BFA/W/274 
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  GENERAL COUNCIL PROCEDURES FOR MEMBERS AND OBSERVERS 
SUBJECT TO ADMINISTRATIVE MEASURES 
 
 
At the beginning of each calendar year,  the Committee on Budget, Finance and 
Administration will notify to the General C ouncil 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 in formation 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 in form the Secretariat as to  when the payment of 
arrears may be expected.  
Each year  the Director General will report on the r esults of his contacts with Members’ and 
Observers’ authorities on the issue of arrears. 
 
 
* * * * * * * 
 
 
SPECIAL PROVISIONS FOR THE SUSPENSION OF ADMINISTRATIVE MEASURES  
FOR INACTIVE MEMBERS AND OBSERVERS
4 
 
 
The General Council can suspend the applicati on of Administrative Measures for Members in 
Category III which agree to, and abide by, a defi ned schedule of instalment payments aimed at 
liquidating all arrears.5 
 
Those Members with pre-1988 arrears that were assessed at the minimum contribution may 
benefit from a reduction in those arrears to the le vel of the 1989 minimum contribution. For each full 
payment of an annual contribution between 1988 and 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 CH F 19,137. The difference between a pre-1988 
assessment and the payment of CHF 19,137 would be funded by the Miscellaneous Income of 
the WTO.
6 
 
The General Council can suspend the applicati on 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.   
__________  
 
                                                      
4 Notwithstanding the WTO Financial Regulations (WT/L/156/Rev 2). 
5 Amend earlier decisions of the General Council in 1988 (C/M/226) and 1994 (C/M/273) to reflect the 
reduced number of categories. 
6 As approved by the General Council in 1994 (C/M/273).