RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/BFA/108 
8 December 2008 
 (08-6054) 
 
  
ANNUAL REPORT 2008 OF THE COMMITTEE ON BUDGET, 
FINANCE AND ADMINISTRATION 
 
 
1. In accordance with the proce dures for an annual overview of WTO activities and for reporting 
under the WTO, adopted by the General Council on 15 November 1995 (WT/GC/M/8, item 11), a 
report on the activities of the WTO Committee on Budget, Finance and Administration in 2008 is 
hereby submitted.  2. It will be recalled that the Committee met fo rmally and informally on a number of occasions 
and has presented reports to the General Council on a regular basis
1. 
 
I. ON-GOING RESPONSIBILITIES 
3. The Committee monitored on a re gular basis the fina ncial and budgetary situation of the 
Organization, the receipt of contributions includ ing the implementation of the related schemes and 
measures pertaining to the receipt of  contributions.  It considered el ements related to human resources 
management and heard progress re ports on the WTO Pension Plan and on the building needs of the 
WTO.  It also examined:  (i) the Director-Gener al’s Budgetary and Financial Report for 2007 and 
Report of the External Auditors thereon;  (ii)  the Report on Extra-Budgetary Funds for 2007;  and 
(iii) the Mid-term Review for the Bi ennium 2008-2009.  At the time of fi nalizing this report, the General 
Council is scheduled to act on the recommendations contained in the report of the meetings of the 
Committee on 17 , 25 November, 1 and 5 December 2008 (WT/BFA/107). 
 
II. MAJOR AREAS OF ACTIVITIES 
A. BUILDING NEEDS OF THE WTO 
4. In May 2008, the Committee recommended to the Ge neral Council that the Director-General be 
authorized to sign the 'Agreement between the Swiss Confederation and the WTO on the long-term 
housing needs of the WTO' (WT/BFA/ W/170), which spelt out in certain detail the renovation, the intra-
mural extension, the extra-mural exte nsion, transitional measures such as  the rental of office premises, 
parking space, the densification of  the conference room and others. 
 5. A first cost estimate with respect to the planned renova tion and relocation had also been 
provided in May, but had been revi sed in October due to the fact th at negotiations had still been ongoing 
in May and therefore more reliable figures had not been available.  The total difference with regard to 
the May estimates consisted mainly of costs for the move of the IT data ce ntre, the installation of 
telephones and electricity, structural modifications , cabling, work on additional space and a back-up 
generator (WT/BFA/W/177).  However, the Secretariat recalled that these costs could be absorbed within the existing budget for 2008. 
                                                     
 
1 Reports: WT/BFA/102 covering the meeting held on 26 February 2008;  WT/BFA/103 covering the 
meeting held on 27 May 2008;  WT/BFA/104 covering the meeting on 9 July 2008;  WT/BFA/105 covering the report of the meeting on 9 October 2008,  WT/BFA/106 covering the meeting on 23 October 2008 and 
WT/BFA/107 covering the meetings of 17, 25 November, 1 and 5 December 2008. WT/BFA/108 
Page 2  
 
   
B. F
OLLOW -UP OF THE AUDITOR 'S COMMENTS ON THE ACCOUNTS FOR 2006 
6. Upon the request of a Member, the Committee w as presented with a follow-up of the points 
raised by the External Auditor in his report on th e 2006 accounts.  The Committee further noted that a 
complete follow-up of all points raised by the External Auditor during his 5-year mandate was 
included in the Director-General's Report for 2007. 
 C. A
DMINISTRATIVE MEASURES  
7. The Committee had been informed about a mandate, issued in 20062, to review the 
application of Administrative Measures by March 2008.  The Chair of the CBFA had subsequently 
sent out faxes to Members from category II to IV alerting them to the sums they owed, to the 
members of the CBFA to hold consultations to co nsider possible measures to extend the existing 
administrative measures and to encourage the particip ation of Members in arrears in the proceedings 
of the CBFA. Some positive responses  had been received.  The review  of the administrative measures 
had been postponed to the beginning of 2009. 
D. ACCESSION OF NEW MEMBERS  
8. The Committee noted the accession of two new Memb ers: (i) the Government of Ukraine on 
16 May 2008 (WT/BFA/103) and (ii) the Republic of Cape Verde on 23 July 2008 (WT/BFA/104) 
and made the corresponding recommendation to the General Council.  E. WTO
 INTERNAL AUDIT  
9. The Secretariat presented the new Head of the Office of Internal Audit to the Members and 
explained that this new position had been created following the approval of the General Council of a 
recommendation by the External Auditor.  Members were informed that the Office of Internal Audit reported directly to the Director-Gen eral and that its role was to execute the Internal Audit Charter, to 
liaise with the External Auditor and to provide recommendations to improve operations.  Members 
would have the opportunity to contribute to the aud it planning, and an annual summary report would be 
provided to the Committee.  F. S
ECRETARIAT VERSION .3 
10. The Committee was briefed by the Director-G eneral about the outcome of the project 
'Secretariat Version.3' and noted that the Trade Facilitation and Trade and Finance Division would be 
discontinued as of 1 January 2009 with its activiti es re-distributed to other divisions. The DDA 
Special Duties Division would also be discontinued,  and the External Relations Division would join 
the Information and Media Relations Division.  In addition, the Procurement Unit would be 
transformed into a new Procurement Section and a temporary Renovation Project Logistics Office would be created; the Budget and Finance Secti ons would be consolidated and the Technical 
Assistance Logistics Unit transferre d to the Institute for Training and Technical Cooperation.  The 
Committee was also informed that several early re tirement packages had been negotiated, generating 
long-term savings as the respective posts would be  filled at lower grades and two Director posts 
would not be re-filled.  
11. With respect to grading and classification th e Committee was informed that it had been 
decided to keep the current struct ure with the exception of the intr oduction of new entry-level grades 
for professionals (grade 6) and support staff (grade s 1-2) as well as the opening-up of grade 11 for a 
                                                     
 
2 WT/BFA/W/141/Rev.1.  WT/BFA/108 
 Page 3 
 
 
 very limited number of non-Directors.  The Committee also noted that the Director-General had 
decided to terminate the current financial bonus system as from 2009 and to replace it by a new system of rewards, both financial and non-financial,  such as scholarship grants for high-performing 
staff.  Regarding career development, training and mobility, it was pointed out that the training budget had been significantly increased in the biennium 2008-2009. 
G. M
ID-TERM REVIEW FOR THE BIENNIUM 2008-2009 
12. The Committee recommended that the General Council approve the revision for the budget 
2009 in the amount of CHF 189.3 million (WT/BFA/107).  H. 
USE OF 2007  SURPLUS  
13. The Committee recommended that the 2007 ov erall surplus be utilized as follows:  
(i) CHF 4,000,000 to be used in accordance with Fi nancial Regulation 26, para graph 3, in application 
as income against the budget for 2009, thereby re ducing Members' contributions (WT/BFA/107);  and 
(ii) CHF 8,051,716 to establish a Members' transition operating fund, whereby the use of the fund is subject to the Committee's approval until the project is completed on 31 December 2013. 
 
I. A
CTUARIAL POSITION OF THE PENSION PLAN 
14. The Committee noted that, as a result of amendmen ts to the assumptions u sed in the actuarial 
valuation with respect to mortality and salary evolut ion, the contribution rate required to maintain the 
actuarial balance of the Plan in the long term had increased from 23.1 per cent as of 31 December 2004 to 27 per cent as of 31 December  2007.  As corrective actions, the Management 
Board recommended:  (i) an increase in the retir ement age from 62 to 65 for new entrants and the 
choice for existing staff to stay until the age of 65;  and (ii) an increase of the contribution rate, setting 
the participant contribution rate at 8.1 per cen t and the WTO contribution rate at 16.2 per cent
3.  The 
Committee noted those recommendations and agreed to  resume its consideration of the matter in 
2009.  
 
J. OTHER ITEMS  
15. The Committee also discussed and/or was informed  about the following points in the various 
meetings:  (i) the 2009 revised budget of the Interna tional Trade Centre UNCTAD/WTO,  and (ii) the 
situation of contributions for the Doha De velopment Agenda Global Trust Fund (DDAGTF). 
 
 
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3 Document WT/BFA/W/179.