RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/BFA/94 
26 February 2007 
 (07-0802) 
Committee on Budget, Finance and Administration  
 
 
 
 
REPORT OF THE MEETINGS HELD ON  2, 22 NOVEMBER AND 5 DECEMBER 2006 
  
1. The WTO Committee on Budget, Finance and Administration met on 2, 22 November and 
5 December 2006 under the chairmanship of Ambassador Juan Antonio March of Spain.  The terms of 
reference and composition of the Committee are set out in document WT/L/44/Rev.1.  The agendas 
contained in documents WTO/AIR/2927, WTO/ AIR/2935 and WTO/AIR/2940 were adopted.  
I. ADMINISTRATIVE UP-DATES AND PROGRESS REPORTS AS AT 
31 OCTOBER 2006 
A. C
ASH SITUATION AND STATEMENT OF OUTSTANDING CONTRIBUTIONS – PROVISIONAL 
REPORT  
B. CONTRIBUTIONS OF OBSERVER COUNTRIES TOWARDS THE COST OF SERVICES PROVIDED BY 
THE SECRETARIAT –  PROVISIONAL REPORT  
C. INSTALMENT PAYMENTS FOR CONTRIBUTIONS IN ARREARS (CONTRIBUTIONS FROM 1987  
AND EARLIER YEARS ) – PROVISIONAL REPORT  
2. A member of the Secretariat presented the cash  situation, the statement of outstanding 
contributions from Members as at 31 October 2006, a nd a statement regarding the contributions of 
Observer countries towards the cost of services provide d by the Secretariat.  As at the reporting date, 
the total of funds available stood at CHF 38 milli on.  Contributions received from Members amounted 
to CHF 144 million for the current year and CHF 15 million for prior years, while those from Observers amounted to CHF 607,000 for the current year and CHF 135,000 for prior years.  The 
Working Capital Fund stood at CHF 9.3 million at 31 October 2006.  The Secret ariat pointed out that 
six Members (Chad, the Democratic Republic of  the Congo, Djibouti, Guinea, Guinea-Bissau and 
Niger) still had outstanding advances to the Work ing Capital Fund amounting to CHF 177,000 as at 
31 October 2006. 
3. With respect to instalment payments for cont ributions in arrears, the Secretariat presented 
document CRP(06)28 providing an overview of outstanding contributions from 1987 and earlier 
years.  Members were informed that Antigua an d Barbuda had settled its arrears since the last 
progress report. 
D. H
UMAN RESOURCES MATTERS  
4. A member of the Secretariat introduced document CRP(06)29 providing an up-date on 
temporary staff positions financed by the regul ar budget as well as by extra-budgetary funds. WT/BFA/94 
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E. P
ENSION MATTERS  
5. A progress report (document CRP(06)24) was presented by a member of the Secretariat who 
informed the Members that the General Council had elected two new alternate members to the 
Management Board at its m eeting on 10 October 2006. 
6. Members were informed that the annual report fo r 2005, including the report of the External 
Auditors, had been approved a nd would be submitted to the General Council as well as to the 
participants and beneficiaries of the Plan. 
7. It was further pointed out that the Management  Board had continued its consideration of the 
possible impact on the Pension Plan of any restructuring and staff separation programme that might be introduced. The Management Board also recognized th e need to strengthen the current staffing of the 
Plan Secretariat. 
8. The Committee took note of the various reports. 
F. S
TATUS OF EXTRA -BUDGETARY ACTIVITIES : 
i) Technical Assistance Activity as at 31 October; 
ii) Doha Development Agenda Global Trust Fund. 
9. Another member of the Secretariat presen ted documents WT/BFA /SPEC/157 and CRP(06)31 
and informed the Committee that as at 31 Octobe r 2006, total expenses and commitments recorded in 
the DDAGTF amounted to CHF 22.9 million, whereas f unds made available for the implementation 
of the 2006 TA Plan amounted to only CHF 21.9 million.  Therefore, the Secretariat urged Members to pledge and pay contributions befo re the end of the year in order to  cover the deficit and to be able 
to build a reserve for 2007. 
10. With respect to the 2007 TA Plan , Members were informed that the CTD had decided that the 
total estimated cost of the Plan was maintained  at CHF 24 million, and subsequently the Committee 
recommended that the target amount of CHF 24 million be approved. (see Recommendation I paragraph 1 in document WT/BFA/93).  The Secretaria t also pointed out that, should the low level of 
contributions and slow conversion of the pledges in to actual contributions persist, the Secretariat's 
capacity to implement the 2007 TA Plan would be limited.  Therefore, Members were urged to 
approach their authorities to pledge funds as soon as possible. 
11. The Committee took note of the report. 
II. FINANCIAL MATTERS 
A. D
IRECTOR GENERAL 'S BUDGETARY AND FINANCIAL REPORT FOR 2005  AND REPORT OF THE 
EXTERNAL AUDITOR THEREON  
12. A member of the Secretariat presented document WT/BFA/W/142 and informed the 
Committee that the year 2005 had ended with an accumulated deficit of CHF 0.3 million, which was 
CHF 2.7 million  less than the accumulated deficit of  2004.  This deficit was covered by the Working 
Capital Fund in accordance with Financial Regulation 26, paragraph 4.  Overall, income had exceeded 
expenditure in 2005 by CHF 2.5 million, comprising a budgetary saving of CHF 2.0 million and 
estimated miscellaneous income of CHF 0.5 million.  The above-mentioned budgetary saving 
included a saving of CHF 1.8 million under the WT O Secretariat resulting from an over-spending on 
personnel-related costs amounting to CHF 2 m illion, a budgetary saving of CHF 3.8 million on 
administrative and other costs and a saving of CHF 0.2 million under the budget of the Appellate  WT/BFA/94 
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  Body Secretariat.  Customary transfers between sect ions were requested to cover over-expenditure in 
certain sections by budgetary savings in others.  It was further explained that the Appellate Body 
Operating Fund (ABOF) was replenished by a speci fic appropriation under the 2005 regular budget of 
the Appellate Body Secretariat.  The closing bala nce of the ABOF amounted to CHF 0.4 million after 
recording expenditure for 2005 of CHF 1.4 milli on and interest earned of CHF 0.02 million.   
13. The Committee was further informed that the re port of the External Auditors had covered a 
number of issues, including the question of US in come tax levied on WTO remuneration and a recent 
judgement by the ILO Administrative Tribunal, the outstanding amount of CHF 0.3 million relating to 
the Cancun Ministerial Conference in 2003, the need to cover the after-service health care liability, 
the segregation of duties with respect to the WTO Pe nsion Plan and the revised inventory procedures 
flowing from the introduction of the new IPSAS accoun ting standards.  The audit report also included 
a summary and an up-date on the report of the exte rnal auditor for the first year of the biennium 
2004/2005. 
B. REPORT ON EXTRA -BUDGETARY FUNDS FOR 2005 
14. Finally, the report on Extra-Budgetary-Funds for 2005 was presented, providing detailed 
information on all extra-budgetary funds in the WT O, both in aggregate and on a fund-by-fund basis. 
15. See Recommendation paragraph 4 of document WT/BFA/93/Add.1. 
III. ITC MID-TERM REVIEW BIENNIUM 2006-2007 
16. The new Executive Director of the ITC a ddressed the CBFA and thanked the Committee for 
the continuing support extended by the Organiza tion.  The Committee was informed that the new 
senior management team had been busy during 2006 working through a transition process, taking into 
account some of the recommendations of the evalua tion of the ITC which had taken place in 2005. 
17. Furthermore, the Executive Dir ector confirmed that the amount approved in 2005 for the 2007 
budget (CHF 16,765,950) would be maintained.  With respect to 2006, the implementation rate of the 
ITC budget was anticipated to reach 98.07 per cen t, corresponding to a budgetary saving of some 
CHF 669,000. 
18. The Committee was also inform ed that the transition process would have some budgetary 
implications for the budget for 2008-2009, especially  in the areas of communications, results based 
management, evaluation, strategy, planning and policy, trade promotion and administration. 
IV. REVISION TO THE 2007 B UDGET – PROPOSALS BY THE DIRECTOR -GENERAL 
19. A Member of the Secretariat introduced the Mid-Term Review for the Biennium 2006/2007 
(WT/BFA/SPEC/155) and recalled that this was the second time the WTO was dealing with a 
proposed revision to the second year of the biennium.  It was also pointed out that only unavoidable 
and unexpected changes had been considered in the revision process; therefore the only changes 
proposed for revision concerned statutory costs.  The statutory adjustments for 2007 pertained to the consequential impact of the underestimated provisi on for the salary adjustments made in 2006.  The 
application of the approved methodology resulted in a weighted average salary adjustment for 2006 of 
2.955 per cent versus a provision of 2.0 per cent.  In addition, the staff profile was adjusted to reflect 
the actual profile for 2006.  The Secretariat also requested authority to transfer the unutilized 2006 
allocation and the approved allocation for 2007 fo r the Restructuring Fund into an operating fund 
created for this purpose.  It was further confirmed that this had no implications on additional funds 
and that any remaining balance in the fund at the en d of 2007 would be returned as unspent funds to 
the 2007 budget.   WT/BFA/94 
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20. At the request of several Members, the Secretariat prepared document CRP(06)33 providing 
additional information about the Restructuring Fund and document CRP(06)34 summarizing the state 
of progress with the implementation of the security enhancement programme.  Generally, Members welcomed the small number of adjustments to the 2007 budget and also appreciated the cost savings 
realized in 2006. 
21. Considering the Restructuring Plan, the Chairperson of the WTO Pension Plan Board, not 
having received a response to previous communi cations, addressed the Committee to express the 
Board's concern on the impact that the possible number of early retiremen ts could have on the 
actuarial balance of the WTO Pension Plan.  She i ndicated that the Board's primary concern was the 
financial soundness of the pension scheme.  She also explained the Board's concern that, in view of 
the fact that the actuarial balance of the pension system was based, inter alia , on staff retiring at a 
specific age, possible early separations of staff coul d subject the Pension Plan to additional costs and 
have serious consequences for the Plan's actuarial balance.  It was therefore necessary to identify who 
would assume such consequences, the Pension Plan or those responsible for taking these decisions.  
22. She recalled that she had sent a letter to th e CBFA, on behalf of the WTOPP Management 
Board, requesting that the Board be consulte d before any final decision was taken under a 
restructuring plan that would have cost implica tions on the WTO Pension Plan.  The Chairperson 
therefore wished to reiterate the Board's concern a nd to highlight the need for such consultations to 
arrive at an adequate solution. 
23. Responding to this request, the Secretariat indicat ed that the Director-G eneral was very aware 
of the need to avoid any adverse impact on the viab ility and the current operation of the Pension Plan 
and that the WTOPP Management Board would be c onsulted in cases of anticipated early retirement 
of staff. 
24. See Recommendation II pages 1-10 in doc ument WT/BFA/93 and Recommendation 
paragraph 3 in document WT/BFA/93/Add.1. 
V. FUTURE BUILDING NEEDS OF THE WTO – REPORT BY THE DIRECTOR-
GENERAL 
25. A member of the Secretariat presented document WT/BFA/W/150 and informed the 
Committee that intensive discussions  had commenced with the Swiss authorities with respect to the 
search for an appropriate solution to the immedi ate housing needs, the vacating of the premises 
occupied by the IUHEI Library and the examina tion of all relevant issues concerning a new 
permanent headquarters. 
26. The Committee was furthe r informed that the Swiss author ities had ensured that the Serono 
building would neither be sold nor rented to a third party without prior consultation and that an alternative location had been found for the IUHEI Li brary, which currently was housed in the Centre 
William Rappard.   
27. With regard to the issue of a possible new pe rmanent headquarters, two possible options had 
been identified:  the construction of a new building,  for which two possible sites had been retained so 
far, or the densification of the Centre William Rappard. 
28. Members' attention was also drawn to the secu rity and access control problem related to the 
two schools sharing the same vehicle entrance as the WTO.  Members were informed that the 
Director-General had advised the Swiss authorities that, given the security risks of the WTO site, 
urgent consideration should be gi ven to whether such close proxim ity to the WTO was in the best 
interest of these two schools.  WT/BFA/94 
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  29. Finally, the Secretariat underlined the constr uctive and cooperative spirit in which the above 
intensive consultations with the Swiss authorities had been conducted. 
30. The Swiss ambassador recalled that political th inking on this matter was still under way and 
that the Federal Council would be examining the matter on 8th December.  This would allow for 
consultations between the WTO and the Swiss author ities to enter into a more concrete phase.  He 
further pointed out the Swiss authorities' willingness to do everything in their power in order to satisfy 
the future real estate needs of the WTO and to pursue with the Secretariat the ongoing discussion in this regard.  
31. The Committee took note of the report. 
VI. OTHER BUSINESS 
32. A member of the Secretariat provided informati on with regard to the current procedure in 
place for emergencies. 
33. The Committee took note of the information. 
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