WORLD TRADE  
ORGANIZATION  RESTRICTED 
WT/BFA/133 
13 November 2012 
 (12-6272) 
Committee on Budget, Finance and Administration  
  
 
REPORT OF THE MEETING HELD ON 23 OCTOBER 2012 
 
1. The WTO Committee on Budget, Finance and Administration met on 23 October 2012 under 
the chairmanship of Ambassador Albinas Zananavi čius (Lithuania).  The terms of reference and 
composition of the Committee are set out in documen t WT/L/44/Rev.1.  The agenda contained in 
document WTO/AIR/4009 was adopted.   
I. FINANCIAL MATTERS 
A. 2011
 FINANCIAL PERFORMANCE REPORT (WT/BFA/W/280) 
2. The Director-General presented the 2011 Financial Performance Report.  The format of the 
report had been modernized to facilitate the read ing of the financial in formation and enhancing 
transparency as part of the adoptio n of the International Public Sect or Accounting Standards (IPSAS).  
The budgetary saving amounted to some CHF 350,000 leading to an overall surplus of CHF 740,000 at the end of 2011.  
3. As announced in the annual reports of the Secr etariat and the External Auditor since 2009, the 
implementation of IPSAS in 2012 w ould deteriorate the financial pos ition of the Organization.  The 
financial statements would disclose negativ e net assets of some CHF 650 million on 1
st January 2012.  
This liability was exclusively the result of the r ecording of staff pension and after service health 
insurance obligations.  In the last three years, th e Secretariat had:  a) engaged work to bring its 
accounting in compliance with IPSAS;  b) calculate d and provisioned some CHF 13 million to cover a 
range of employee benefits;  and c) completed the actuarial valuations related to staff pension and 
after service health insurance oblig ations.  The Secretariat would have to work in the coming years 
with Members to find solutions to restore the financia l situation of the Organization.  In the meantime, 
it would be more prudent to delay any decision regarding the balance of the Surplus Account. 
4. The Director-General thanked the External A uditor for the quality and comprehensiveness of 
its 2011 report.  He reported that six of the 16 r ecommendations made by the External Auditor related 
to the financial statements had been immediately implemented and that the others were being dealt 
with.  Members would have to consider most of the recommendations related to the performance audit 
of the dispute settlement mechanism as they were directly related to the rules approved by them. 
5. The Secretariat should be completing two major financial reforms in 2012:  the 
implementation of IPSAS and the implementation of  a new resource management approach based on 
outputs.  These reforms were essential steps to modernize and enhance the management of WTO 
resources.  In addition, they had been engaged usi ng almost exclusively internal existing resources.  
6. The Director-General took the opportunity to inform the Committee about the expected level 
of activity in 2013 and the approach regarding th e mid-term budget review.  He indicated that the 
WTO was currently facing a surge in its disput e settlement activity.  The surge was presently 
observed at the panel level and it should reach the A ppellate Body next year.  The Secretariat would 
also face in 2013 the challenge of bringing all its new facilities into operation.  The building project 
that had lasted more than five years and should be  completed on time and totally within the agreed WT/BFA/133 
Page 2  
 
  budget.  The Secretariat would have to implement a new facility management approach for its new 
site.  Despite those challenges and given the current  difficult world economic situation, the Director-
General did not believe that it required any adjust ment to the 2013 budget that had already been 
approved by the Members.    
B. 2011
 EXTERNAL AUDITOR REPORT (WT/BFA/W/279) 
7. The First President of the French Court of A udit (the External Auditor) first thanked the 
Secretariat for the close co-operation during the audi t.  He declared that the 2011 report was focused 
on the audit of the WTO 2011 financial statements  and a performance audit on the Dispute Settlement 
Mechanism.  On the basis of the audit conducte d, the External Auditor certified the 2011 WTO 
financial statements.   
8. The External Auditor indicated that reco mmendations on their prior reports had been 
implemented rapidly by the Secretariat.  He th en presented the recommendations of the 2011 report 
specifically related to the financial statements.  The External Auditor also presented the results of the 
review requested by the Committee earlier this y ear related to mission expenses, taxi and telephone 
expenditure and corporate credit cards.  No abuses or misuses were noticed.  The External Auditor 
made some recommendations to further enhance controls.   
9. With regard to performance audit of the Dis pute Settlement Mechanism, the External Auditor 
concluded that the independence a nd confidentiality of the system were maintained.  A number of 
recommendations were formulated to further enhan ce the timeliness in dispute proceedings and the 
cost accounting of the system.   
10. Several Members thanked the External Audito r for the extensive and comprehensive report 
and highlighted the importance of the external a uditor's role and the need to follow-up on the 
recommendations.  One Member commented on the high level of non-compliance in telephone call 
validation and on the use of taxis by four staff predominantly.  Another Member sought advice from 
the External Auditor on how to manage the liability  induced by the adoption of IPSAS and suggested 
to earmark the 2011 Surplus for the pension liabil ity.  Finally, one Member asked that the China 
LDCs and Accessions Programme Trust Fund be la belled under the Aid for Trade Framework in the 
2011 Financial Performance Report. 
11. The Committee also warmly thanked the External  Auditor for its report.  The Committee took 
note of the 2011 Financial Performance and 2011 Ex ternal Audit reports and recommended to the 
General Council the following recommendation for approval:  
12. The Committee recommends that the General Council approves the transfers between 
budgetary sections as outlined in paragraphs  21 and 25 of document WT/BFA/W/280.  The 
Committee further recommends that the Gene ral Council approves the audited accounts for 
2011. 
II. ADMINISTRATIVE UPDATES AND PROGRESS REPORTS   
A. WTO  BUDGET AND FINANCE REPORT (WT/BFA/W/286,  288 AND 289) 
13. A member of the Secretariat presented the situation regarding Members' and Observers' 
contributions received in the third quarter of 2012.  The level of receipts and the cash position of the 
Organization remained favourable.  A total amount  of CHF 160 Million was received related to the 
2012 assessed contributions or 81 per cent of the total.   The 2012 budget continued to be implemented 
as foreseen.    WT/BFA/133 
 Page 3 
 
 
  14. The financial situation of the Doha Deve lopment Agenda Global Trust Fund (DDGATF) 
slightly improved in the third quarter.  However, th e overall slow rate of contributions continued to 
raise concerns about cash flow for implementati on of planned activities.  Contributions to the 
DDAGTF amounted to almost CHF 10 million in the first three quarters; with contributions from 13 donors.  Since the creation of the Global Trust F und, the total voluntary contributions amounted to 
almost CHF 200 Million.  The three largest donor s were Sweden, Norway and Germany.   
15. The Secretariat also announced that it was seeking voluntary contributions of approximately 
CHF 600,000 to facilitate the participation of LDCs at the 9
th Ministerial Conference (MC9) to be 
held in Indonesia, in December 2013.  The dedi cated Trust Fund used for the last Ministerial 
Conference was open to receive contributions. 
16. Members requested additional information on th e expenditure incurred on the Appellate Body 
Operating Fund and on the estimated expenditure for th e participation of LDCs at the next Ministerial 
Conference. One Member expressed some concerns re garding the funding situation for Trust Funds.  
Norway indicated that they had increased their contributions to the Global Trust Fund by 50 per cent in 2012 compared to 2011 and encouraged other donors to join the effort.    
17. The Committee took note of the reports. 
B. B
UILDING PROJECT REPORT  
18. A member of the Secretariat updated the Committee on the Building Project and on the 
financial situation of the Members' Transition Op erating Fund.  He emphasized that the overall 
project remained within schedule and budget.  Conference rooms in the North Wing would be 
available in the first quarter of 2013.  Staff w ould be moved in the new administrative building in 
December 2012.  
19. Following a question of a Member, it was conf irmed that the new underground parking built 
on the WTO campus would be essentially available for the use of delegates as from January 2013.  Two Members enquired about the Director-General's proposal to return building projects savings to 
the Host Country.  One Member reminded about th e possibility to use the re maining balances of the 
project to renovate the Villa Rappard, cu rrently used for small meetings.     
20. The Committee took note of the report. 
C. H
UMAN RESOURCES REPORT  
21. A member of the Secretariat updated the Committee on human r esources matters that were 
suggested by the Chair.  Information was provided regarding the evolution of grade structure, the number of promotions, post vacancies and posts adve rtised.  The Chairman highlighted these matters 
would be reviewed by the Committee over the next few months.   
22. The Committee took note of the report. 
III. ADAPTATION OF INFRASTRUCTURE CONTRACT 
23. A member of the Secretariat presented the preliminary results of the discussion conducted by 
the Secretariat to renegotiate the WTO Infrastru cture Agreement with the Host Country.  The 
Infrastructure Agreement defines the right of use regarding the buildings and land occupied by the 
WTO.  The current agreement was last negotiated in 1995 and has the document reference WT/GC/2.  
The major changes induced by the completion of Bu ilding Project required that the agreement to be 
up dated.  The Secretariat has been holding discussions with the Swiss Authorities on an on-going WT/BFA/133 
Page 4  
 
  basis over the last three years to draft a new Ag reement that preserves the existing interest of 
Members while being also acceptable for the Swiss Authorities.  The agreement contains clauses 
related to the revision of the agreement; the different  types of rights and obligations for the different 
parcels of land and buildings; the termination and early termination of the agreement depending on 
whether the WTO remains in Geneva or not; th e rental and maintenance of the buildings. 
24. Several Members enquired about the specific ty pe of agreement; the differences with the 
existing agreement; whether other international or ganizations could be using the WTO conference 
facilities; the amount of vacant space once the building project is completed; and what the status of new Suzhou type garden would be.  A Member reminded the Committee of an earlier proposal to 
create a reserve fund for the maintenance of the building as the WTO is taking over the ownership.   
25. The Committee took note of this preliminary oral report and was expecting further 
information before the new Agreement needs to be finalized. 
IV. ADMINISTRATIVE MEASURES FOR MEMBERS IN ARREARS OF 
CONTRIBUTIONS 
26. A member of the Secretariat presented briefly the situation of Members on Administrative 
Measures.  The Committee was inform ed that Members subject to Administrative measures remained 
the same as previously presented in September 2012.  
27. The Committee took note of the report. 
__________