RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/BFA/95 
26 April 2007 
 (07-1729) 
Committee on Budget, Finance and Administration  
 
 
 
 
REPORT OF THE MEETING HELD ON 28 MARCH 2007 
  
1. The WTO Committee on Budget, Finance and Administration met on 28 March 2007 under 
the successive chairmanships of Ambassador Juan Antonio March of Spain and Mr. Tony Lynch of 
New Zealand.  The terms of reference and com position of the Committee are set out in document 
WT/L/44/Rev.1.  The agenda containe d in document WTO/AIR/2977 was adopted.  
I. ADMINISTRATIVE UP-DATES AND PROGRESS REPORTS AS AT 
28 FEBRUARY 2007 
A. C
ASH SITUATION AND STATEMENT OF OUTSTANDING CONTRIBUTIONS – PROGRESS REPORT  
B. C ONTRIBUTIONS OF OBSERVER COUNTRIES TOWARDS THE COST OF SERVICES PROVIDED BY 
THE SECRETARIAT – PROGRESS REPORT  
2. A member of the Secretariat presented the cash  situation, the statement of outstanding 
contributions from Members as at 28 February 2007 and 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 80 milli on.  Contributions received from Members amounted 
to CHF 75 million for the current year and CHF 2.7 million for prior years, while those from 
Observers amounted to CHF 128,000 for the current year and CHF 57,000 for prior years.  The Working Capital Fund stood at CHF 9.4 million as at 28 February 2007.  The Secretariat 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 
28 February 2007.  All these Members belong to Category IV (Inactive Members). 
C. H
UMAN RESOURCES MATTERS  
3. A member of the Secretariat introduced document CRP(07)03 and explained that the 2007 
salary survey with the two comparators, the UN and the Coordinated Organizations weighted at 
70 per cent and 30 per cent respectively, had resu lted in a grade-weighted average difference of 
1.08 per cent. 
4. In accordance with the methodology set out in  Annex B of the WTO Staff Regulations, the 
Director-General made adjustments to the net sal ary scale as of 1 January 2007 of 0.5 per cent for  
grades 1 to 6 and 1.35 per cent for grades 7 and ab ove. Through the adjustment, the Director-General 
had sought to maintain the competitiveness of th e WTO salaries in all grades in relation to the 
comparators, while at the same time keeping within the boundaries of the methodology. 
5. With respect to the HR Reform Project, Me mbers were informed that functional and 
management development training programmes ha d taken place and that the project aimed at 
developing a competency model for the WTO Secretar iat had started under the lead of an external 
consulting firm. WT/BFA/95 
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  6. Furthermore, an up-date on temporary staff pos itions financed by the regular budget as well as 
by extra-budgetary funds was presented. 
7. Several Members enquired regarding the number of temporary staff employed for more than 
11 months and why it took such a long time to fill these posts. They were also concerned to know 
whether this situation was in line with the pro cedures established for temporary assistance and feared 
that this could eventually entail legal problems in the ILO Administrative Tribunal.  Some other 
Members asked for more information with regard  to the Performance Appraisal System and one  
Member enquired about the result of the Oxford Group. 
8. The Secretariat explained that, with respect to the regular budget, only three posts were 
charged against temporary assistance funds and that most of the other contracts were charged against 
vacant posts or posts where the incumbent was on sp ecial leave without pay (SLWOP).  A member of 
the Secretariat added that the Organization was ve ry mindful with regard to the management of 
temporary assistance, which should only be used for exceptional situations, and that short-term 
contracts under extra-budgetary funds should be treated in a similar manner.  The Secretariat also indicated that it remained mindful of the need to ensure that the new policy is strictly followed in 
order to avoid creating a legal ob ligation of continuing employment.   Members agreed that the matter 
should be kept under close review. 
D. P
ENSION MATTERS  
9. A progress report (document CRP(07)04) was presented by a member of the Secretariat who 
informed the Members that the General Council had elected one new alternate member to the 
Management Board at its meeting on 14-15 December 2006. 
10. With respect to the investment strategy, Memb ers were informed that the Management Board 
had heard presentations by the managers of the Eur opean real estate portfolio and one of the global 
equity portfolios. 
11. It was further pointed out that the Manageme nt Board had discussed and agreed upon a draft 
amendment to the Regulations of the Pension Plan  which was designed to protect the Plan against 
possible adverse consequences for the actuarial bala nce of the Plan of restructuring and/or staff 
separation programmes, and that the draft amen dment would be submitted to the CBFA and the 
General Council for their cons ideration in due course. 
12. One Member asked for details concerning the pe rformance of the investments of the Pension 
Plan.  The Secretariat answered that such details  were included in the Annual Report of the Pension 
Plan and that the relevant information could be in cluded in the next periodic report to the Committee. 
13. The Committee took note of the various reports. 
E. S TATUS OF EXTRA -BUDGETARY ACTIVITIES : 
i) Technical Assistance Activity as at 28 February; 
ii) Doha Development Agenda Global Trust Fund. 
14. Another member of the Secretariat presen ted documents WT/BFA /SPEC/161 and CRP(07)05 
and informed the Committee that as at 27 March 2007,  total expenditure and commitments recorded 
in the DDAGTF amounted to CHF 12.6 million, wh ereas the balance brought forward from 2006 and 
the contributions received in 2007 amounted to on ly CHF 11.5 million.  The resulting deficit of 
CHF 1.1 million had been partially covered by the buffer account of CHF 1 million, leaving a current 
deficit of CHF 110,000.  Therefore, the initiation of  new activities had to be put on hold pending the  WT/BFA/95 
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  receipt of the pledges of CHF 5.9 million as, according to the financial rules, pledges could not serve 
as a basis on which to undertake commitments.  The Secretariat urged Members to pay their pledged 
contributions of CHF 5.9 million as soon as possible in order to be able to resume activities.  
15. Furthermore, it was pointed out to Members that the terms of reference of the DDAGTF 
required that CHF 18 million, i.e. 75 per cent of the 2007 target amount, be received by the end of 
March. This threshold would be missed. Add itionally, 100 per cent of the target amount, i.e. 
CHF 24 million needed to be received by 30 June, wh ich meant that new contributions equivalent to 
CHF 6.6 million were required in addition to th e payment of the pledged contributions for the 
implementation of the 2007 TA Plan. 
16. Finally, it was explained that the financial situ ation would be kept under close review with a 
view to calling a special CBFA prior to the next m eeting of the General Council to address this issue 
as a matter of urgency. 
17. The Committee took note of the report. 
F. R EPORT ON FUTURE BUILDING NEEDS OF THE WTO 
18. The Director-General presented document WT/B FA/W/156 and provided an overview of the 
results of the meetings held with the Swiss author ities on the issues of the immediate housing needs of 
the WTO, the IUHEI Library and a new permanent headquarters for the WTO.  He further explained that, with respect to the immedi ate housing needs, three alternativ es were currently being examined: 
(i) the Serono building; (ii) the IUHEI library space and (iii) the Avenue de France project, taken over 
by the Swiss authorities and rented to the WTO.  However, the Serono building posed cost problems 
and the Avenue de France project both cost and timing problems.  As for the IUHEI library, the 
Director-General informed the Me mbers that the space would be vacated in August and, after some 
refurbishment, would allow for the return of so me 100 staff from Rue Rothschild by February 2008. 
19. Nevertheless, there would still remain a shor tage of space in the CWR which would be 
aggravated as new demands for office space emerge d.  Therefore, the Secretariat counted on the 
support and goodwill of the Swiss authorities in helping to find a suitable solution to that issue.  
20. With respect to the permanent headquarters,  the Director-General reported that three 
alternatives were currently being examined: an on-s ite extension of the CWR and two possible sites in 
the Canton of Geneva, and that, afte r having studied the technical and financial aspects of each option, 
a detailed report would be presented to the CBFA and the General Council before the summer break. 
21. Several Members requested more information a bout the Serono building and the Avenue de 
France project and also asked if the Director-G eneral could provide a timetable.  One Member 
requested more information in due course in orde r to make a comprehensive examination of all 
options, without prejudging the conc lusion.  He highlighted that th e continuing close cooperation with 
the host country was essential. 
II. INACTIVE MEMBERS 
22. A member of the Secretariat presented document WT/BFA/W/154 which provided a list of 
Members which, as of 28 February 2007, had arrear s for three or more years commencing with the 
year 1989. WT/BFA/95 
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  23. In accordance with paragraph 7 (b) of document PC/7, L/7578, the Committee 
recommends to the General Council that the following  Members classified in Category IV of the 
Administrative Measures (Inactive Members)  be urged to liquidate their arrears:  
Burundi 
Central African Republic 
Chad 
Congo Côte d'Ivoire Democratic Republic of the Congo Djibouti 
Dominica 
Gabon Gambia 
Guinea 
Guinea-Bissau 
Malawi Mauritania Niger Paraguay 
Sierra Leone 
Togo 
III. DRAFT REVISION OF THE FINANCIAL RULES AND REGULATIONS 
24. Another member of the Secretariat presented document WT/BFA/W/155 and informed the 
Members that the External Auditor of the WTO ha d brought to the Secretariat's attention certain 
inconsistencies in the Financia l Rules and Regulations of the WTO concerning (i) the threshold 
amount of an intended purchase which called for co mpetitive bidding and (ii) the audit of the WTO 
accounts in the context of the biennial system. 
25. Therefore, the Committee, having examined document WT/BFA/W/155, recommends to
 
the General Council that the WTO Financial Ru les and the WTO Financial Regulations be 
amended to reflect the changes proposed for the documents WT/L/156/Rev.2 and 
WT/L/157/Rev.1 . 
IV. APPOINTMENT OF THE EXTERNAL AUDITOR 
26. Document WT/BFA/W/151 was presented to the Committee by a member of the Secretariat 
who recalled the following practice for the appointment of an external auditor: in the first place, the 
CBFA would address a letter to all WTO Members to ascertain whether the Member's National Audit 
Office would be in a position to consider appoint ment as External Auditor of the WTO with effect 
from the audit of the accounts for 2008.  Then, a working group of the CBFA would examine the 
offers, prepare a report and draft a recommendati on to the CBFA, which would then examine the 
report of the working group and forward its recommendation to the General Council. 
27. The Committee took note of the past practice and the draft letter included in document 
WT/BFA/W/151. 
V. SECRETARIAT VERSION.3 
28. The Director-General addressed the Committee on the issue of the reform programme, called 
Secretariat Version.3, explaining that Version.1 was the GATT Secretariat, Version.2 the WTO 1994, 
and Version.3 would be today's Secretariat.  
29. The Director-General outlined that the project  had started in 2006 with  consultations with 
staff, a survey and an internal report issued by the Joint Advisory Committee (JAC).  After another 
series of consultations and retreats with all DDGs and Directors, the Director-General presented the areas to work on in order to improve the effici ency of the Secretariat as well as to increase 
transparency and facilitate management.  He indicat ed that, among the issues he intended to tackle 
within the scope of the project were increasing in ternal mobility, creating a more flexible grading  WT/BFA/95 
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  structure, improving internal procedures for recr uitment and appointment and the introduction of 
"Activity-Based Budgeting" (ABB).   
30. The Director-General explained that ABB was a method of budgeting where costs were 
identified and tracked according to the WTO's core  functions and, on a more detailed level, by 
individual activities within each of these core functi ons.  Furthermore, costs could be monitored by 
type of activity, in order to identify clearly where resources were spent.  In this process, ABB would 
also permit the WTO to target areas where e fficiencies and economies could be achieved by 
quantifying the resources required to produce a given output. 
31. Finally, the Director-General indicated that he planned to implemen t ABB on a gradual basis 
in order to facilitate adaptation by staff and that he hoped that the system would be up and running by 
the time of the mid-term review at the end of 2008.  With respect to Version. 3, the Director-General 
stressed that consultations with staff would be held throughout the planni ng phase which he intended 
to complete by late Summer or Autumn 2007. 
VI. ACCESSION OF VIET NAM 
32. The Chairman introduced document WT/BFA/W/152 concerning the assessment of 
contribution on the Socialist Republic of Viet Nam. 
33. Consequent to the accession to the WTO of  the Socialist Republic of Vietnam on 
11 January 2007, the Committee decided to make  the following recommendation to the General 
Council:  The Committee recommends to the General Co uncil that a pro rata contribution to the 
2007 budget amounting to CHF 466,976 be assessed on the Socialist Republic of Viet Nam.  This 
assessment, calculated as from 11 January 2007, is  based on an annual contribution of 0.266 per 
cent, taking into account the international trad e figures (imports plus exports in goods, services 
and intellectual property rights) of Viet Nam for the years 2000-2004.  Furthermore, on the 
basis of the level of the Working Capital Fund of CHF 9,370,602, the Committee recommends to 
the General Council to assess an amount of CHF 46,853 on the Government of the Socialist 
Republic of Viet Nam as an advance to the Fund . 
VII. 2007 ADJUSTMENT OF WTO DEPENDENCY ALLOWANCES 
34. A member of the Secretariat introduced document WT/BFA/W/153 and recalled that the 
dependency allowances had been recalculated followi ng the 2007 adjustment to the WTO salary scale 
and applied provisionally as of 1 January 2007 pending approval by the General Council under Staff 
Regulation 13.2. 
35. Therefore, the Committee, bearing in mind that the methodology for adjusting 
dependency allowances was approved by the Ge neral Council in December 2004 (WT/GC/M/90, 
paragraph 158), recommends that the revised  allowances as set out in document 
WT/BFA/W/153_be incorporated into the WTO Staff Rules with effect from 1 January 2007 . 
VIII.  ELECTION OF CHAIRPERSON 
36. The Chairperson recalled that the Chairman of  the General Council had carried out informal 
consultations on the appointment of Chairpersons  to the various WTO standing bodies in accordance 
with the established guidelines for such officers.   On the basis of the understanding reached, 
Ambassador Juan Antonio March of Spain propos ed that the Committee on Budget, Finance and 
Administration formally elect Mr. Tony Lynch as chairperson of the Committee by acclamation.  The Committee so agreed. WT/BFA/95 
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  37. The elected Chairman assumed the Chair, thanked the Committee for its confidence and 
indicated that he looked forward to a fruitful year in 2007. 
IX. OTHER BUSINESS 
38. A Member of the Committee enquired whethe r there had been any follow up to the 
recommendation of the External Auditor in his last report concerning US Taxes. (WT/BFA/W/142, 
paragraph 111).  The Secretariat replied that (i) the increase in the receivables was, in part, due to both 
exchange rates, which gave a higher equivalent in  US dollars, as well as to the number of WTO staff 
which were concerned with the tax question; (ii) the Secretariat had been in contact with the US 
authorities to express the WTO's request to renegotia te the Tax Reimbursement Agreement, and (iii) 
after evaluation, there did not seem to be a need to hedge against currency fluctu ations related to this 
question.   
POINTS FOR DECISION: Paragraphs 23, 25, 33 and 35 
 
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