RESTRICTED  
  
WT/BFA/147  
 
10 February 2015  
(15-0857)  Page: 1/19  
Committee on Budget, Finance and Administration    
 
 REPORT OF THE MEETINGS HELD ON 2 AND 10 FEBRUARY 2015 
The Committee on Budget, Finance and Administration met on 2 and 10 February 2015 under the 
chairmanship of Ambassador Francisco Alberto Lima. (El Salvador). The terms of reference and 
composition of the Committee are set out in document WT/L/44/Rev.1. The agenda contained in 
document WTO/AIR/BFA/1 was adopted.  
1  REPORT OF OUTSTANDING CONTRIBUTIONS FROM MEMBERS AND OBSERVERS 
(WT/BFA/W/347) 
1.1.  A member of the Secretariat introduced the report on the outstanding contributions from 
Members and Observers. Nine Members and one Observer were subject to Administrative 
Measures at the end of 2014. The situation regarding Members' and Observers' outstanding 
contributions continued to improve in 2014. The total amount of outstanding contributions from 
Members and Observers reduced by CHF 2 million in 2014 to reach just less than CHF 20 million at 
the end of the year; its lowest amount in more than 15 years. 
1.2.  At the start of each year, the list of Members and Observers was updated with the annual 
assessed contributions. As part of the approv ed procedures, the Committee has to notify the 
General Council, at the start of every year, of the list of Members and Observers subject to 
Administrative Measures. The number of Members su bject to Administrative Measures is higher 
than in prior years at the same date as they  had not yet settled their 2014 contributions. The 
following 30 Members were subject to Administrative Measures on 10 February 2015.  
Cat. I (18) Cat. II (2) Cat. III (10) 
Argentina Cameroon Antigua and Barbuda 
Benin Vanuatu Central African Republic* 
Cabo Verde  Djibouti* 
Democratic Republic  
of the Congo  Dominica 
Dominican Republic  The Gambia* 
Gabon  Grenada 
Kuwait, the State of  Guinea-Bissau 
Lesotho  Mauritania 
Malawi  Niger* 
Mongolia  Togo* 
Nigeria   
Paraguay   
Rwanda   
Saint Vincent  
and the Grenadines   
Suriname   
Tanzania   
Venezuela, Bolivarian  
Republic of   
Zambia   
* Members not complying with payment plan terms. 
 WT/BFA/147 
 
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  1.3.  The following 7 Observers were subject to  Administrative Measures on 2 February 2015. 
Cat. I (6) Cat. II (0) Cat. III (1) 
Equatorial Guinea  Sao Tomé and Principe 
Iran   
Lebanese Republic   
Libya   
Sudan   
Syrian Arab Republic   
 
1.4.  The Committee recommends to the General Council to urge Members and Observers 
under Administrative Measures to liquidate their arrears.  The updated list of the Members 
and Observers currently under Administrative Measures will be provided by the Chair of the 
Committee at the General Council meeting. 
2  RECOMMENDATION ON THE REVISION  OF WTO FINANCIAL REGULATIONS 
(WT/BFA/W/344/REV.1, WT/BFA/W/351, WT/BFA/W/352) 
2.1.  The Committee established in early 2014 a Working Group to review the WTO Financial 
Regulations which are set out in document WT/L/156/Rev2. This Working Group provided its 
report (WT/BFA/W/344/Rev.1) with proposed re vision of the Financial Regulations to the 
Committee at the end of 2014. The Committee review ed the report of the Working Group in its 
meetings in December 2014 and February 2015. The Working Group has proposed a number of 
changes to the Financial Regulations to align them with the new requirements imposed by the 
implementation of the International Public Sector Accounting Standards and with best practices. It 
was also proposed to accurately reflect current practices and policies of the WTO; as well as 
decisions that had been taken by the General Council in relation to the financial management of 
the WTO. A number of amendments have been prop osed such as providing a clear timeline for the 
Secretariat to present the budget proposal, e nhancing the budgetary information by including 
expenditure by activity, including the Administrati ve Measures previously approved by the General 
Council, requiring financial statements to be provided in accordance with International Public 
Sector Accounting Standards and aligning internal control and external audit arrangements with best practice.  
2.2.  Delegations provided some additional suggest ions to the report of the Working Group during 
the meetings of the Committee in February 2015. Th ese have been reviewed by the Chair of the 
Working Group and presented in document s WT/BFA/W/351 and WT/BFA/W/352. These 
suggestions further enhanced the drafting and clarity of the proposed revision, by better 
explaining the budget review mechanism proced ures and the timeline for the Committee to 
examine the audited financial statements and the repo rt of the External Auditor. A reference to the 
early payment encouragement scheme has also been added. Finally, the proposed revision has 
been reformatted to the new WTO formatting guid elines and regulations have been renumbered. 
2.3.  The Committee concluded its review and endorsed the proposed revision of the WTO 
Financial Regulations as presented in document WT/BFA/352. The Chair of the Working Group 
suggested that the Secretariat regularly updates the Committee on the progress made on the 
implementation of the Financial Regulations. The Committee approved the following recommendation. 
2.4.  The Committee recommends that the General Council approve the revised WTO 
Financial Regulations as annexed to this document . 
3  WORKING GROUP ON AFTER SERV ICE HEALTH INSURANCE (ASHI)  
3.1.  The new Chair of the Working Group on Af ter Service Health Insurance (ASHI) updated the 
Committee on the progress of the Working Group. He  indicated that he had consulted individually 
with each Member of the Working Group to better understand expectations. Additionally, he explained that the Working Group had recently considered several scenarios illustrating a range of 
possible future budgetary and financial implic ations of the WTO's Medical Insurance Plan. WT/BFA/147 
 
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  3.2.  The Working Group is aware of the technical complexity of the issue and its sensitivity to 
staff and retirees. It is seeking to find a hybrid solution to balance the interests of stakeholders while managing the demographic and budgetary realities faced by the Organization.  
3.3.  The Working Group has agreed on a provisional work programme of meetings leading up to 
the end of its current mandate in July.  The next meeting will be at the end of February when the 
group will consider cost control measures. Its Chair expressed his confidence that the group would be able to deliver on its mandate by the deadline and stressed that any recommendations will 
likely have both short and longer term implications for management of the medical insurance plan 
and ASHI liabilities. 
3.4.  The Chair thanked the Members of the Workin g Group for their involvement in this technical 
and sensitive matter. The Committee took note of the report.  
4  ORGANIZATIONAL REVIEW OF THE WTO SECRETARIAT  
4.1.  Deputy Director General Brauner (DDG Brauner) updated the Committee on the latest 
progress on the Organizational Review initiated by the Director-General at the start of 2014. He 
specifically provided some additional information regarding the organizational structure. The 
Committee had regularly asked Management to tackle the "inverted grade structure" of the Secretariat. He reminded that he had worked with every director on a proposed medium term 
divisional staffing structure in order to address this issue of concerns for the Committee. He 
highlighted the central role played by directors in  this process. The Director-General had actively 
reviewed the proposed grade structure for every division and had proposed some adjustments. 
4.2.  DDG Brauner presented the current and the guideline target structures by grade of the 
Secretariat. He also presented the details for the professional and support staff categories. The 
overall number of staff positions, including thos e not funded from the regular budget, would be 
slightly reduced from 673 to 656. The guideline target structure envisaged a reduction of staff at 
grade 10 by 36% to 63, compared to 99 currently. This would mean a reduction by almost half in 
the number of staff at grade 10 against the peak reached 3 years ago with almost 120 staff. The 
number of staff at grade 9 would also reduce by 20% in the guideline target structure compared to 
the current structure. The number of professional staff at grade 6, 7 and 8 would increase. The 
overall number of support staff would reduce from  292 to 258 with more staff at grade 5 and less 
in other grades. DDG Brauner pointed out that the guideline target structure comprised a significant reinforcement of the staff resources supporting the dispute settlement mechanism. 
Finally, he stressed that the implementation of the guideline target structure would take some 
time and would be gradually implemented over time. 
4.3.  Several Members thanked and expressed thei r support to the Director-General, DDG Brauner 
and directors for this process and its outcome. They also highlighted that operational 
considerations should not be ignored when implementing this new target structure and recognized that it might take some time to achieve the final structure. One Member thanked Management for 
engaging this process in a consultative manner and recommended to include the recommendations 
of the performance audit conducted by the External Auditor. He pointed the importance of the zero 
nominal budget growth and the importance to focus on increasing diversity within the Secretariat. 
4.4.  One Member took the opportunity to reiterate the request to obtain information from the 
Secretariat on how it ensures that staff is complying with the code of conduct, especially on the 
training provided. DDG Brauner confirmed that a written report would be provided for the next 
meeting of the Committee scheduled in March.  
4.5.  The Chair confirmed that the Committee wanted to be kept abreast of the development of the 
Organizational Review and receive a report on the training initiatives related to the code of conduct. The Committee took note of the report. 
5  DISCUSSION ON THE ESTABLISHMENT OF  AN AUDIT COMMITTEE (WT/BFA/W/349) 
5.1.  In its last meetings, the Committee discussed the establishment of an Audit Committee at 
the WTO. Proposed terms of reference for a Work ing Group to establish an Audit Committee were 
presented to the Committee.  WT/BFA/147 
 
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  5.2.  Several delegations expressed their support and interest to participate in this Working Group 
to be established. Some delegations proposed some drafting suggestions to the proposed terms of references to be more specific regarding the scope of the mandate of the Working Group. One 
delegation suggested to carefully consider wh ether the Audit Committee, if referred as a 
Committee, would be or not independent from the Committee on Budget, Finance and 
Administration. 
5.3.  The Chair concluded that delegations were invited to submit to the Secretariat their 
suggestions for the proposed terms of referenc es of the Working Group and that a revised 
document would be circulated for the next meeting of the Committee. He would also engage some consultations in view of identify a Chair for this Working Group. 
6   EXTRA-BUDGETARY FUNDS REPORT (WT/BFA/W/348)  
6.1.  A member of the Secretariat reviewed the si tuation with trust funds and in particular the DDA 
Global Trust Fund (DDAGTF) as of the end of 2 014. He mentioned that while contributions were 
historically low, overall the financial situation of the DDAGTF was strong. He brought to the 
Committee's attention several points related to funding of various activities. 
6.2.  First, he confirmed that the Trade Facilitation Agreement Facility (TFAF) was operational and 
encompassed the Trade Facilitation Needs Assessment and Trade Facilitation Negotiating Group 
activities that previously were separate trust funds. In response to a question from a Member, he 
indicated that the current balance in the fund was more than CHF 1 million. 
6.3.  Second, the Committee was notified that the Director-General intended to reallocate savings 
from the regular budget allocation to technical assistance and capacity building to launch a new 
initiative in 2015 that would be called the Young Professionals Program (YPP). The substance of 
the YPP had been shared with Members in an informal meeting of the CTD on 26 January 2015 and the Director-General would be reporting to the General Council on the initiative at a future 
meeting. A Member requested clarification from where resources were allocated to the proposed 
program, how this program would relate to the ongoing internship programs and how it would 
address the concerns of Members on greater diversity within the Secretariat. The Secretariat 
explained that the program would be further discussed in the CTD as part of the WTO's biennium 
technical assistance and training plan, and that matters regarding long term budgetary support would also require further discussion. The Member thanked the Secretariat for its clarification that details of this program, particularly its funding aspects, would be further discussed in the CTD as 
part of the WTO's biennial technical assistance and training plan. In response to questions from 
another Member, it was clarified that the program would start with 5 young professionals in 2015 and that the selection process and duration was different than for existing internship programs. 
6.4.  Finally, the Committee was reminded that a fund to support the participation of LDCs at MC 
10 had been established with a target of CHF 800,000.  Currently it had received no contributions and in order for planning of the support for LDCs to proceed smoothly it would be necessary to 
receive funds soon. Members interested in making  contributions were encouraged to contact the 
Secretariat as soon as possible. 
6.5.  The Chair encouraged Members to support the LDC fund and the Committee took note of the 
report. 
7  INFORMATION ON RECENT CURRENCY FL UCTUATIONS AND POTENTIAL IMPACT ON 
THE FINANCIAL MANAGEMENT OF THE WTO SECRETARIAT 
7.1.  A member of the Secretariat presented the document WT/BFA/W/350 related to the recent 
currency fluctuations and its potential impact on the financial management of the WTO. The Swiss 
National Bank (SNB) announced on 15 January 2015 that it discontinued its strategy of holding a 
minimum exchange rate of 1.20 Swiss francs (C HF) per euro. The minimum exchange rate was 
introduced in September 2011 during a period of exceptional overvaluation of the Swiss franc and 
an extremely high level of uncertainty in financia l markets. The euro has depreciated considerably 
against the US dollar in recent months and this, in turn, has caused the CHF to weaken against the US dollar. In these circumstances, the SNB deci ded not to maintain the minimum exchange rate 
for the Swiss franc against the euro. This announcement had an immediate impact on the CHF WT/BFA/147 
 
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  exchange rate against most currencies. The CH F rose by some 15% against the euro and was 
closing at 1.04 CHF for 1 euro on 29 January 2015. The CHF rose by some 10% against the US dollar and was closing at 0.92 CHF for 1 USD on 29 January 2015. It remained to be seen at what level the exchange rates might stabilize in the medium term. 
7.2.  These currency fluctuations might impact the amount of the contributions to be paid to the 
WTO by Members and Observers when converted into  their local currencies. At the same time, the 
drop in the interest rates on CHF might negatively affect the WTO Secretariat's treasury 
management operations as Swiss banks are gradually announcing a reduction in the interest rates 
on deposit balances and are indicating possible negative interest rates. The reduction of CHF 
interest rates would negatively impact the actuarial valuation of the long term employee benefits and increase liability by at least some CHF 100 million. 
7.3.  A Member asked what the impact would be on the purchasing power parity that is included in 
the salary adjustment methodology used by the Secretariat. The Secretariat indicated that the impact would be seen in 2016 as the currency fl uctuation took place at the start of 2015. The 
Secretariat would present its annual report on the salary adjustment methodology for the next 
meeting of the Committee. Another Member expressed serious concerns as the increase in the contribution amount in its currency reached 15%. He also indicated that strengthening of the CHF 
induced a positive salary gain, especially when expenditure was taking place outside of 
Switzerland. 
7.4.  The Committee took note of the report and expressed an interest to continue monitoring the 
situation. 
8  OTHER 
8.1.  The next meeting of the Committee is scheduled for Monday 23 March 2015 at 3 PM. The 
agenda will comprise an item on the proposal to establish a building maintenance fund and one for 
the annual staff diversity report. WT/BFA/147 
 
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  FINANCIAL REGULATIONS OF TH E WORLD TRADE ORGANIZATION 
PROPOSED REVISED VERSION RECOMMENDED FOR THE APPROVAL 
OF THE GENERAL COUNCIL 
 
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 th e 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 ca rry 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.  
 
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 any revisions for the second year of the biennium as may be 
necessary, 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, genera l services, travel or capital expenditure.  
 In addition, the budget proposal shall set out ho w the Secretariat intend to deploy the budgeted 
resources to achieve the WTO’s objectives, showin g, for illustrative purposes, the breakdown of 
expected expenditure by key output areas such as dispute settlement or technical assistance. 
 WT/BFA/147 
 
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  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 the functioning of the Appe llate Body and its Secretariat shall be identified 
and subject to a specific recommendation by the Committee.  
 
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 or useful. 
 Regulation 8 
 Supplementary budget proposals for the current financial period may be submitted by the Director-General on an exceptional basis.  
The Director-General shall prepare supplementary bu dget proposals in a form consistent with the 
approved budget. These proposals shall follow th e same examination and approval process as for 
the annual budget proposals.  
 
Regulation 9 
 
The proposed budget expenditure shall be financed by income that consists of: 
 a) Contributions from Members and Observers. A dr aft 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. 
 
Chapter III. Adoption of the Budget  
Regulation 10 
 
The Committee shall examine the budget proposal an d seek further explanations and amendments 
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 procedures set out in Regulations 6, 7, 9 and 10 shall be applied to any revision for the second financial period of the biennium. The Dire ctor-General may submit a revised proposal for 
the second year of the biennium when there ar e 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 
 
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. 
 
Calculations of assessed contributions for a given year shall be based on international trade statistics over a five year period. E.g. the calculations of assessed contributions for 2015 shall be WT/BFA/147 
 
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  based on international trade statistics for the years 2008 to 2012; or if these statistics are not 
available, for the last five years for which statistics are available.  The statistics used refer to trade in goods and commercial services, including intellectual property 
rights payments, derived from the balance of payments statistics 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. 
 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.  
If IMF data are not available, the WTO Secretar iat shall use estimates based on the best other 
available sources.  
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.  
The same minimum contribution shall also be assessed to Observers. 
 The contributions shall be assessed and paid in CHF. 
 
Regulation 13 
 
After the General Council has adopted the budget and the scale of contributions, the Director-
General shall promptly notify Members and Observers of their financial obligations by providing an invoice and a statement of account.  
Members and Observers have the obligation to pr omptly pay their contributions. Contributions 
shall be considered as due and payable in full up on 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. 
 With a view to encouraging Members to pay their co ntributions as early as possible in the year in 
which they fall due, the interest earned by inve sting the funds received by the Secretariat should 
be refunded to the Members pro rata, depending on  the amount of their payments and on the date 
which they are made, as set out in Annex A.  
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 contribution s. Members and Observers with arrears shall be 
subject to Administrative Measures as defined in Annex B. 
 
Regulation 15 
 Observers may only accede to the WTO if their contributions as Observers have been fully paid. 
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. 
 WT/BFA/147 
 
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  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.  
Chapter V. Miscellaneous income 
 Regulation 18 
 Except in so far as the General Council may decide otherwise, all income other than (a) contributions payable by Members, (b) interest ea rned 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.   Chapter VI. Voluntary Contributions, Gifts or Donations 
 
Regulation 19 
 
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 C.  
Monies 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 expenditure 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 de fined in the agreement signed with the donor. 
The Programme Support Fund collects the overhead fees from all trust funds 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 record it as miscellaneous 
income.   Monies 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.  
 Monies 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. 
 Unless otherwise provided, such voluntary contributions, gifts or donations shall be administered in 
accordance with the present Financial Regulations. 
 Chapter VII. 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 appropriations were adopted and up to 
the amounts so adopted.   
Regulation 21 
 
At the end of the financial period the Director-G eneral 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 at the time of budget  finalization, transfer shall not be permitted. WT/BFA/147 
 
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Regulation 22 
 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 using 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, including details of the goods or services procured and the likely amounts to be paid under the contracts; or 
b) are authorized by specific decisions of the General Council. 
Chapter VIII. The Surplus Account 
 
Regulation 23 
 
Budgetary savings shall be transferred to the Su rplus Account. Budgetary savings are defined as 
the difference between approved expenditure and the corresponding actual expenditure as 
presented in the WTO financial statements for the period. The actual expenditure does not take into account the variations in the actuarial provisions for the long-term liabilities associated with staff pensions and after service health insurances if they have not been included in the approved 
budget. 
 The difference between the approved miscellane ous income and the corresponding actual 
miscellaneous income as presented in the WTO financial statements for the period as well as the 
variation of the provision for contributions in arrears shall also be transferred to the Surplus Account. 
 
If at the end of a financial period the Surplus Account shows a credit balance, the Director-General shall make proposals to the Committee with regard to its use which may be:  
a) application as income against the budget for the second financial period following that in 
which the surplus occurs, thereby reducing Members' contributions; 
b) transfer to the Working Capital Fund;  or 
c) use for any other purpose decided upon by the General Council. 
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 Fu nd. Any part of the deficit left uncovered after 
transfer from the Working Capital Fund shall be in cluded as an appropriate credit in the budget for 
the next earliest possible financial period.   Chapter IX. The Working Capital Fund 
 
Regulation 24 
 
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; 
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 25 
 
Any government acceding to the 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 WT/BFA/147 
 
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  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 26 
 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 commitmen ts relating to extraordinary expenditure. 
Regulation 27 
 
Sums advanced under Regulation 26(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 26(b) shall be reimbursed to the Wo rking Capital Fund by including an appropriate 
credit in the budget for the next earliest possible financial period.  
 
Regulation 28 
 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 24(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 29 
 
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 
CHF amount of their shares in the Work ing Capital Fund under Regulation 24(a). 
 
Regulation 30 
 
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 24(b) above. 
 Chapter X. Treasury Management 
 
Regulation 31 
 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 banks in which the funds of the WTO shall be held. The 
Secretariat shall set criteria 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 in any speculat ive activities such as on exchange or interest 
rates. Monies should only be held in CHF, with the exception of where the Secretariat reasonably 
expects or has committed to making payments in other currencies in the near future.  
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. 
 
The Director-General shall include in the financial statements submitted to the General Council a statement of the investments currently held. 
 
Income from investments shall be credited as provided in the rules or agreement relating to each fund or account. WT/BFA/147 
 
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Chapter XI. Financial Reporting  Regulation 32 
 The financial statements of the Organization shall be prepared in accordance with the International 
Public Sector Accounting Standards (IPSAS) applic able to the accounting period concerned. Any 
divergence from the use of the specified standards shall be explained in the notes to the financial 
statements.  Regulation 33 
 Appropriate separate accounts shall be maintained in respect of all trust funds, reserves and special accounts. 
 
Regulation 34 
 
The accounts of the Organization shall be mainta ined and presented in CHF. Accounting records 
may, however, be recorded in both the transaction currency and in CHF.   Regulation 35 
 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. 
 
Regulation 36 
 
The report of the External Auditor shall be tran smitted to the Committee together with the audited 
financial statements in a timely manner, allowing sufficient time for the Committee to examine the report and the audited financial statements in advance of the regular meeting of the General Council in July. The Committee on Budget, Financ e 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 37 
 
The Director-General shall also provide to the Committee: 
 
a) Quarterly reports on the financial position and performance of the Organisation, 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). 
b) Annual reports on Human Resources with details on evolution of the grade structure, salary 
adjustments and employee benefits, diversity of st aff, internal mobility of staff and external 
recruitment activities, and learning and development.   
Chapter XII. Internal Control 
 
Regulation 38 
 
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; WT/BFA/147 
 
- 13 - 
 
  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: 
 
 the regularity of the receipt, custody and disposal of all funds and other financial 
resources of the WTO; 
 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; 
 the economic use of the resources of the WTO. 
Regulation 39 
 
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 40 
 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 stat ement of such payments shall be submitted with 
the final accounts. 
 
Regulation 41 
 
The Director-General may, after full investigation, authorize the writing off of losses of cash, 
supplies, equipment and other assets, other than a rrears 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 42 
 
The Director-General shall establish rules for the procurement function. The procurement function 
includes all actions necessary for the acquisition, by purchase or lease, of property, including products and real property, and of services, including works. The following general principles shall 
be given due consideration when exercising the procurement function of the WTO: 
  Efficient and effective use of the Organization's resources 
 Non-discriminatory, fair, open competition and equal  opportunity for vendors 
 Transparency 
 Best value for the money in terms of quality and price 
 Accountability 
Tenders for property and services 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. 
 WT/BFA/147 
 
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  Chapter XIII. External audit 
 Regulation 43 
 
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 with Regulation 44 for a six-year period non-renewable. 
 
The External Auditor shall be the Supreme Au dit Institution of a Member of the WTO. 
 The Committee 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.  
The External Auditor shall not be removed during  his tenure of office except by the General 
Council.  
Regulation 44 
 
The External Auditor shall be required to audi t the WTO and the WTO’s Pension Plan financial 
statements in accordance with INTOSAI Auditing Standards and 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 required 
to conduct itself in conformity with the INTOSAI Code of Ethics and other generally accepted 
professional standards. 
 The mandate of the External Auditor shall comprise  regular and performance audits as defined by 
the INTOSAI Auditing Standards.  
 The External Auditor shall be completely independent and solely responsible for the conduct of any audit that it undertakes. 
 
The General Council may request the External Auditor to perform certain specific examinations and issue separate reports on the results. 
 
Regulation 45 
 
The Director-General shall provide the External Au ditor with the facilities he may require in the 
performance of the audit.  In the event of a disagreement between the Dire ctor-General and the External Auditor on the 
facilities to be provided, the Director-General should seek guidance from the General Council. 
 Regulation 46 
 The External Auditor shall issue an annual report on the audit of the financial statements to the Committee in a timely manner, in accordance with Regulation 36. The External Auditor may also 
report to the Committee on financial issues, on performance audits and/or special reports on any 
issue deemed of significance by the External Audito r, or any issue raised by the General Council in 
accordance with Regulation 44.   WT/BFA/147 
 
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  ANNEX A 
 
WTO EARLY PAYMENT ENCOURAGEMENT SCHEME  
 
With a view to encouraging Members to pay their co ntributions as early as possible in the year in 
which they fall due, the interest earned by inve sting the funds received by the Secretariat should 
be refunded to the Members pro rata, depending on  the amount of their payments and on the date 
which they are made. As a consequence, the miscellaneous income in the annual income budget 
estimates will no longer include the item for interest earned on investments.  As a general rule, the secretariat, upon receiving contributions, invests in short term deposits the 
funds which are not to be used immediately. Since the total interest received is a combination of 
three factors: 
a) the amount of funds held in deposit; 
b) the duration of the deposits;  
c) the interest rate; 
 
The amount to be distributed can only be known with precision at the close of the budget year. 
Therefore, the crediting operation can physically take place only after the beginning of the new 
financial year, in other words, too late in principle for the amount credited to be deducted from the contributions assessed for the new financial year. Consequently only the contributions assessed for 
the second following year would be reduced by th e amount of interest accrued. The scheme would 
work as follows:  
 YEAR A   interest is credited; at the end of the year the allocation of interest is 
determined; 
 YEAR A + 1   the contributions assessed for year A+2 are calculated when the budget 
estimates are prepared; interest credit is taken into account and deducted from the 
contributions assessed for year A+2; 
 YEAR A + 2   payment of contribution assessed less interest credited. 
 
Bearing in mind that the date of payment and the amount paid are two important factors, one 
could consider that the determination of the amounts of interest to be distributed should be based on a formula under which these two factors would serve as a basis for the calculations of interest 
entitlements. 
 Where a contribution was received during the year when it was due, a number of points to be 
credited to the account of the Member concerned would be calculated as follows; 
 number of points  = amount X number of days to run up to the end of the year (360 days) 
         10,000 
 
For example   assuming a Member paid CHF 200,000 on 17 March, the number of points crediting in its favor would result from the following formula: 
 
200,000 X 283 = 5,660 
            10,000      
 
Assuming further that the total number of points apportioned during the year amounted to 350,000 and that the amount of interest to be distributed was CHF 150,000, the amount credited 
to the Member concerned would be: 
 
150,000 X 5,660 = CHF 2,426 
   350,000 
 WT/BFA/147 
 
- 16 - 
 
  Should the Member have paid its contribution on 10 October (number of days to run up to the end 
of the year: 77) the amount credited would have been CHF 660. WT/BFA/147 
 
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  ANNEX B 
 
ADMINISTRATIVE MEASURES FOR MEMBERS AND OBSERVERS IN ARREARS 
 
Cate-
gory 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 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 the General Council on financial matters 
will be removed. 
3. Observers will be denied access to training or technical assistance. 
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 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/147 
 
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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. 
 
* * * * * * * 
  
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 de fined schedule of instalment payments aimed at 
liquidating all arrears.
4 
 
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 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 amou nting to CHF 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.
5 
 
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.   
                                               
4 Amend earlier decisions of the General Council in 1988 (C/M/226) and 1994 (C/M/273) to reflect the 
reduced number of categories. 
5 As approved by the General Council in 1994 (C/M/273). WT/BFA/147 
 
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  ANNEX C 
 
VOLUNTARY CONTRIBUTIONS, GIFTS OR DONATIONS FROM 
NON-GOVERNMENTAL DONORS 
 
Given that voluntary contributions, gifts or donations (hereafter "donations") from non-governmental donors 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 w ill be governed by the following guidelines. 
 
1. Donations proposed by private individuals 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 pr omptly 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 abov e 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 the broad objectives of the Committee on Trade 
and Development, the Memorandum of Understand ing 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 sh all also be made available on the WTO Website 
in order to ensure transparency. 
__________