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WT/BFA/166  
 
14 November  2017 
(17-6134) Page: 1/6 
Committee on Budget, Finance and Administration    
 
REPORT OF THE MEETIN G HELD ON 25 SEPTEMBER 2017  
 
The Committee on Budget, Finance and Administration (CBFA) met on 25 September under the 
Chairmanship of Ambassador Peter BRŇO (Slovak Republic). The Terms of Reference and 
composition of the Committee are s et out in document WT/L/44/REV.1. The Agenda is contained in 
document WTO/AIR/BFA/ 20. The agenda was formally adopted , including a request from th e 
Netherlands Delegation  to make a statement under Other Business . 
 
1  2018 -2019 BUDGET PROPOSAL  - WT/BFA/W/427  
1.1.  The Secretariat presented the proposed budget presentation . 
1.2.  At the end of the Secretariat's presentation, several Members  thanked the Secretariat and 
expressed appreciation that the draft budget proposal was premised on  zero nominal growth. A 
Member pointed  out that the amounts indicated for Security Equipment and Conference Equipment 
& Maintenance, in Table 35 had not taken account of paragraphs 3.39 and 4.9. He then  asked  how 
the Secretariat was planning to in the upcoming biennium, considering the number of the vacant 
posts.  
1.3.  One Member  thanked the Secretariat and stated the view that the tone of the document in 
paragraph 2.3 and several other places was too strong as there were statements made that the 
Secretariat had no possibility to make additional cost savings. Citing the delays in the dispute 
settlement area, t he Member had concerns about the impact that the forecast vacancies may have 
on the Organization's work.  
1.4.  Another Member  stated that the Secretariat ought to do a strategic assessment geared 
towards reallocating resources within the WTO  to priority areas .  
1.5.  One delegate  pointed out a transposition error in Table 10, relating to spouse allowance and 
child allowance. The same delegate  suggested that the Secretariat should find ways to cut the 
expense s within the WTO. He then  expressed concern  regarding the  inadequate budget for the 
Security Equipment . 
1.6.  One Member  suggested that costs that are not critical to the WTO functions  be scaled back . 
Another Member  thanked the Secretariat for the budget proposa l, particularly the zero nominal 
growth. The Member stated that his Capital is still studying the report , with attention to  Table 35.  
1.7.  A Member  expressed the appreciation to the Secretariat and recognized that the task is 
becoming more and more difficult. T he Member noted that there were no major concerns related 
to budget proposal. The Member also stated that the  tone of the document should be moderated.  
1.8.  Another Member  requested clarification of how the CHF  532,000 reduction from the ITC 
budget would be re allocated.  
1.9.  One Member  asked the Secretariat about how the vacant posts (35 vacant posts in 2018 and 
40 in 2019) will affect the Organization ; The Member  noted that there were projects unbudgeted 
for, estimated to cost CHF3.3 million. He asked whether the n egative interest  could be funded with 
savings derived from vacant posts. Furthermore, the M ember recalled that the funds budgeted for 
the Building Renovation Fund were lower than the estimated required provisioning for this Fund.   WT/BFA/166  
 
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  1.10.   Referring to Table 35, t he Secretariat stated that the rational e for including the information 
on projects that were not budgeted for was because the items therein listed are important a nd 
ought to not be overlooked. The Secretariat  agreed that there was a  transposition error  in 
Table  10.  
1.11.   The Secretariat informed the Committee that negative interest rates were currently 
systemic in Switzerlan d and affected many entities. The Secretariat also stated that there are 
some funds invested in US Dollars, which were gaining some positive  interest.  The Secretariat 
stated that it would provide more details regarding the items in Table 35.  
1.12.   DDG Brauner clarified the situation regarding the vacant posts. He informed the Committee 
that there are vacant posts at the moment in the WTO. He furthe r noted that for the past several 
years the vacancy rate has ranged between 30 and 44 posts.  The Committee was informed that 
29 posts were moved to the dispute settlement  area in the recent past . The DDG reported that the 
current intention of the Secretari at is to decrease the number of the short -term employees . 
1.13.   The DDG further  mentioned  that the E-registration  would reduce  expenses.  
1.14.   The Secretariat confirmed that indeed the annual budget amount for the Building 
Renovation Fund the Secretariat informed the Committee that annual allocation of CHF 600 ,000 is 
not sufficient .  
1.15.   One Member  took the floor and asked the Secretariat what the next steps would be  between 
now and the G eneral Council Meeting . The Chairman reported that next two formal meetings 
would take place on 12th October and 6th November 2017. He also said, should the need arise, the 
Committee would  have additional meetings. The Committee was also informed that the deadline 
for submitting recommendations to the General Council was 2 0th November 2017. 
1.16.   A Member  expressed the view considering that  non-staff costs represent only small 
proportion of the total costs, any significant savings would have to derive from staff costs.  Another 
Member  asked that the needs not included in the budget be monetized . 
1.17.   The Chairman stated that more comments are expected after the capitals make their 
decisions.  The Secretariat stated  that they would present additional information specifically 
requested for by Members and that it would moderate the tone of the document to so ften the 
paragraphs that were cited by Members as well as other related paragraphs.  
1.18.   The Committee took note of the report.  
2  UPDATE FROM THE WORK ING GROUP ON THE ASH I FUND  
2.1.  The Chairwoman of the Working Group on the ASHI Fund updated the Committee on the  
Working Group's ongoing work. She informed the Committee that s ince the 18th July 2017, the 
Working Group ha d intensified its work and ha d met a total of four times, on 19 July,  29 August, 
14 September and 20  September. The Chairwoman added that in her capacit y as Chair,  she had  
issued a  paper containing  draft elements reflecting possible options for an ASHI Fund as discussed 
so far. Nevertheless, she indicated that as discussions were still ongoing  within the Working Group, 
new ideas were emerg ing on possible funding models. She concluded by saying that t he Working 
Group had not lost sight of the deadline for it to make its recommendation to the CBFA. She then 
announced that t he Working Group would  meet again on 29th September to continue its 
deliberations .  
2.2.  The Committee took note of the report.  
3  PROPOSED NEW METHODO LOGY FOR THE DETERMI NATION OF WTO DEPEND ENCY 
ALLOWANCES  
3.1.  The Secretariat presented two elements which aimed at ensuring a transparent, stable and 
predictable method of adjustment of the dependency al lowances, in addition to being simple to 
operate . One was the periodic adjust ment of the amounts of dependency allowances and the other 
was for  setting the reference amounts  to be applied in as of January 2018 . The latter would WT/BFA/166  
 
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  essentially be a calculation  that would be made only once, after which periodic adjustments would 
be made every 3 years, in line with the cumulative movement of the WTO salary scale over the 
period and which would avoid potential minor adjustments , up or down , of the allowances. In this 
regard, t he Secretariat proposed to introduce a 2% threshold, below which no adjustments would 
be made to the allowances.  
3.2.  Responding to a question from a Member, t he Secretariat informed the Committee  that a 2% 
adjustment of the spouse allowance would  be less than CHF 20 per month.  
3.3.  The Committee was informed that in terms of the reference rates, which would be 
established only once, the Secretariat had looked more in detail at the WTO 's two comparator 
organizations, the UN and the Coordinated Organizat ions. It was stated that both organizations 
use tax abatements and social payments to establish their family allowances, albeit with different 
methodologies for different staff categories. The Secretariat therefore considered that using tax 
abatements and social payments in the host country remains a relevant and sound approach in 
determining the reference amounts. However, in order to lessen the reliance on the Canton of 
Geneva the Secretariat proposed to reduce the weight on the Canton of Geneva by 50% an d place 
the remaining 50% weight on the average of the 10 largest  Cantons , by population,  in 
Switzerland. The resulting reference amounts for 2018 were presented to the Committee. 
According to the Secretariat the overall cost for the allowances would reduc e by approximately 
CHF 800,000 if these amounts were implemented in 2018.  
3.4.  DDG Brauner added an assessment using the tax abatements and social payments in France 
resulted in a reference rate for the spouse allowance which would be higher than that determine d 
using  weighted average of Geneva and the 10 most populated Cantons in Switzerland.  
3.5.  A Member stated that  it is not in a position to accept the proposed methodology. The same 
Member asked to provide some more detailed data from the other international orga nizations in 
Geneva for comparison.  
3.6.  Another Member remarked that the use of tax abatements and social payments as a base for 
establishing the reference rates was still not convincing and asked the Secretariat to provide 
alternative methods for establishing  the initial rates.  
3.7.  DDG Brauner noted that an official proposal would be provided to Members at an upcoming 
meeting of the Committee. DDG Brauner further explained that the official proposal should go 
through the Joint Advisory Committee and the Director -General.  
3.8.  A Member recalled that the amounts for 2016-2017 dependency allowance adjustment s were 
specific to that period and that the CBFA had instructed the Secretariat to propose new 
methodologies for implementation in January 2018 .  
3.9.  The Committee took note of the report.  
4  2016 -2017 REPORT ON STAFF  LEARNING DEVELOPMENT  - WT/BFA/W/430  
4.1.  An Official from the Secretariat updated the CBFA on the overall Learning Strategy for 2016 -
2020 and also provided some insight into the various types of learning activities on  offer to 
Secretariat staff in 2016 and 2017.  
4.2.  The Official mentioned that the current learning strategy not only focuses on individual and 
team development but also on organizational development which addres ses the context in which 
staff m embers operate. S pecific mention was made of the need to clarify strategic priorities and 
ensure that systems and processes were aligned to ensure effective staff performance.  
4.3.  The Official also informed Members of specific training techniques that have been provided to 
staff such as coaching skills for managers and enhanced interview skills for M embers of  
recruitment panels.  
4.4.  Finally she focused on various learning methods such as coaching, mentoring and learning 
networks to enable staff to retain and ultimately apply the le arning received. The Members were WT/BFA/166  
 
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  informed of the existence of a number of internal networks as well as external learning networks 
with other Geneva -based International Organizations. One example of the latter was the learning 
network for Research Economis ts (WTO/UNCTAD/ITC/UNECE/ILO/WEF).  
4.5.  The Committee took note of the report.  
5  Q2 2017 WTO BUDGET A ND FINANCE REPORT  - WT/BFA/W/428  
5.1.  An official  from the Secretariat presented the budget and finance report for the second 
quarter of 2017. The receipts of contribu tions from Membe rs as at the end of June 2017 were  
slightly higher than  the receipts in June 201 6, due to contributions received in advance at the end 
of 2016 . With respect to the assessed amount of CHF 195 .5 million, 6 7% was received. For the 
second quart er of 201 7, the receipts of contributions from Observers amounted to CHF 3 34,940 
representing 52% of the assessed amount. 45% of the Observers paid their annual contributions 
in full. 78 Members  and 10 Observers, respectively, had no outstanding balance.  
5.2.  The Secretariat presented the cash situation at the end of June 201 7 and indicated that it is 
satisfactory and slightly above the level of June 2015. This balance include s funds received for the 
Doha Development Agenda Global Trust Fund (DDAGTF) and the Enh anced Integrated Fram ework  
(EIF). 
5.3.  The Secretariat  informed the Committee that a s of 25 September 201 7, eight Members were 
subject to Category I of the Administrative Measures ; no Members were subject to Category II; 
and seven  Members were subject to Catego ry III;  
5.4.  Since June 2017, Bolivia, Saint Vincent and the Grenadines and Solomon Islands came out of 
Category I ; Cameroon changed from Category II to Category I ; and Guinea -Bissau was removed 
from the Administrative Measures list as its Payment Plan was app roved by the General Council in 
July 2017. Two Observer s were subject to Category III (and are therefore considered as inactive ).  
5.5.  The Secretariat presented the Consolidated Statement of Budgetary Expenditures as at 30 
June 201 7. The statement consist ed of three main parts: staffing resources; other resources;  and 
operating funds and ITC. The Secretariat indicated that the rate of expenditure as at 30 June 
2017, being CHF10 4 million, wa s 53% of that budgeted for the year.  
5.6.  The high level of expenditure under  Chapter A, Temporary Assistance arises from the 
replacement of staff on Leave without Pay and long-term sick leave. The expenditure under 
Staffing Resources, was 47% of the amount budgeted for the year. The Secretariat highlighted 
that the expenditure pre sented under Staffing Resources did not reflect  the 2 CHF Million of the 
dependency entitlements since these were paid in September 2017.  
5.7.  Under the Section for Financial Expenditure, the Secretariat alerted the Committee that the 
situation on the negative interest would become critical from November 2017 and that the 
negotiated bounds would no longer be applicable. Consequently, the amount of negative interest 
to be paid by the WTO  would increase significantly.  
5.8.  The Committee took note of the report.  
6  Q2 201 7 WTO EXTRA -BUDGETARY FUNDS REPO RT – WT/BFA/W/425  
6.1.  An Official from the Secretariat present ed the financial situation for the second quarter of the 
Doha Development Agenda Global Trust Fund (DDAGTF) and other trust funds. He underlined that 
the 2nd quarter report was outdated and updated the Committee with the new figures as of 
September 2017. Then, the Secretariat expressed their gratitude to  the following country 
delegations for their contrib utions received between June and September  2017: Australia, China , 
European Union, France Germany Ireland, Japan, Korea, New Zealand, Sweden, Switzerland and 
United States.  
6.2.  It was indicated that the opening balance of the DDAGTF at the beginning of the year was 
CHF 16.9 million. Contributions as at the end of the secon d quarter amounted to 0.5 MCHF  whilst 
expenditures and commitments totalled CHF 7. 4 million.  WT/BFA/166  
 
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  6.3.  The Secretariat thanked the donors that had generously contributed a total amount of CHF 
544,437 to the LDCs Ministerial Trust Fund.  
6.4.   The Secretariat indicated  that the Standards and Trade Development Facility (STDF) needs 
additional contributions to be able to continue approving and contracting new projects.  
6.5.  Concerning the other trust funds the Secretariat stated that they are generally in a stable 
financial position. The Secretariat concluded by indicating that the 3rd quarter report will be 
presented in November 2017.  
6.6.  The Committee took note of the report.  
7  ACTUARIAL POSITION O F THE WTO PENSION PL AN - WT/BFA/W/426  
7.1.  The Chairman of the WTO Pension Plan  Management B oard presented the valuation based on 
31 December 2016 data. The Chairman reminded the Committee that the regulations of the 
Pension Plan required actuarial valuations to be carried out every three years.  
7.2.  The Chairman announced to the Committee that the P ension Plan Management Board 
convened an Actuarial Working Group (AWG) to review the parameters that were used for the 
previous , 2013, full actuarial valuation. He then added that in this process, the Board consulted 
closely with the Plan 's Actuary and Investment Advisor in order to review the recent actuarial 
experience and the evolution of the funding position since 2013.  
7.3.  Ultimately, the Chairman informed the Committee that the Pension Plan Management Board 
decided to maintain all previous actuarial assu mptions as there were no compelling justifications 
for modifications and given that stability of assumptions help s to make the valuations comparable 
over time. Then the Chairman indicated that at the end of 2016, the long -term estimated 
contribution rate w as slightly higher than the actual contribution rate of 23.7%. However, the 
consulting actuary did not recommend taking any action as there was no significant gap at this 
point. The current contribution rate is considered to be within the margin of error f or the calculated 
contribution rates.  
7.4.  The Chairman indicated that t he long term cost of the plan ha d decreased since the previous 
formal funding valuation at 31 December 2013 due primarily to the amendments to the Plan 
regulations approved by the General Council that took effect 1 January 2016. However, in light of 
the factors contributing to the costs of the Plan, the report flagged two aspects related to the long 
term sustainability of the Plan that should be monitored : firstly, and as always, the long t erm 
viability will depend on achieving the target investment returns. Economic uncertainty and low 
interest rates could make achieving the target return more  difficult in the coming years; s econdly, 
changes in staffing and recruitment which reduce the numb er of active participants in the Plan 
would disrupt the actuarial balance of the Plan.  
7.5.  Due to this u nstable situation, the Chairman declared to the Committee that i f in the coming 
years any persistent trends are identified, the Management Board would be re quired to 
recommend actions to address any projected imbalance.  
7.6.  The Committee took note of the report.  
8  REQUEST FROM THE STA FF COUNCIL TO BE REP RESENTED AT CBFA MEE TINGS  - 
WT/BFA/W/429  
8.1.  The Chairman of the Committee introduced the request made by  the Staff C ouncil  and asked 
for Members ' views .  
8.2.  A Member stated that it was unclear why the Staff Council would want to participate in CBFA 
meetings and what the nature of that participation would be . The referred to paragraph 3, under 
the Resolution 14(I) of the do cument WT/BFA/W/429  which  states explicitly that “representatives 
of the staff shall have the right to be heard by the Committee”.  The Member underlined the fact 
that the right to be heard is distinct from the right to be represented during CBFA meetings, and 
both are distinct from the right to participate in the deliberations of Member States.  WT/BFA/166  
 
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  8.3.  The Member then emphasized that it was also not the practice in the UN for staff 
representatives to participate as Observer s in governing bodies akin to the CBFA, e.g. the 
5th Committee in N ew-York. The Member added that the standing practice in the UN was for the 
Secretariat staff to appear before the 5th C ommittee during its deliberations to testify and answer 
questions from Member States. This is completely within the discretion of Member States. The 
Member invited the Committee to r efer to the following United Nations document:  Resolution 
A/RES/35/213 of December 1980, which stipulates the exact parameters with regard to access by 
staff representatives to the 5th Committee.  
8.4.  The Member stated that  if the Staff Council is seeking an opportunity to be able to present 
their views to the CBFA, this could be considered . The Member by saying that the request for 
permanent observer status in the CBFA will be difficult to a ccept, and is not consistent with the 
practices of other international organisations.  
8.5.  In conclusion, the Member expressed the view that the responsibility  is on the WTO 
Administration, which is present at CBFA meetings, to communicate effectively with the  Staff 
Council and the staff at large . 
8.6.  The Committee  were accepting of the comments . 
9  ANY OTHER BUSINESS  
9.1.  The Delegate of the Netherlands addressed the Committee by informing the attendees that 
he would be leaving  Geneva. He  took the opportunity to present h is successor. He then thanked all 
the Members for their professionalism and friendship.  
9.2.  The Committee took note of this and bid him farewell . 
 
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