Proposal for a Council Decision on the signing and conclusion on behalf of the European Community of the 2006 International Tropical Timber Agreement presented by the Commission
Date: 2006-12-15
Institutions: European Commission
Subjects: UNO, forest conservation, international agreement, signature of an agreement, trade agreement, tropical wood

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 15.12.2006 
COM(2006) 807 final 

2006/0263 (ACC) 

Proposal for a 

COUNCIL DECISION 

on the signing and conclusion on behalf of the European Community of the 2006 
International Tropical Timber Agreement presented by the Commission 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

The  conference  set  up  within  UNCTAD  (United  Nations  Conference  on  Trade  and 
Development) to negotiate the text of the International Tropical Timber Agreement to replace 
the  1994  International  Tropical  Timber  Agreement,  as  extended,  concluded  its  work  on  27 
January 2006 with the adoption of a new Agreement. This Agreement was opened for signing 
at the United Nations in New York, which is the depositary of the agreement, on 3 April 2006 
and  will  remain  open  until  one  month  after  its  definitive  entry  into  force,  planned  for  1 
February 2008, or any subsequent date when all the conditions laid down in Article 39 of the 
Agreement have been met. 

In  the  discussions  the  Community  negotiated  on  the  basis  of  the  negotiating  directives 
proposed by the Commission and approved by the Council in June 20051. In the light of these 
discussions and the content of the new instrument, which reflects the Community's position, 
the  Commission  considers  the  International  Tropical  Timber  Agreement  2006  should  be 
signed and the instrument of approval deposited with the Treaty Section of the United Nations 
in New York. 

From a strictly legal viewpoint, it should be noted that, although tropical timber agreements 
are  trade  agreements  covered  by  Article  133  of  the  Treaty  establishing  the  European 
Community,  they  are  unconventional  commodity  agreements  covering  both  trade  and  the 
environment through sustainable management for the conservation of tropical tree species. 

In  this  case,  careful  examination  of  the  objectives  of  this  new  Agreement  shows  that  the 
commercial  provisions  are  intended  to  promote  sustainable  forest  management  and 
development.  The  organisation  set  up  under  the  Agreement  (ITTO)  occupies  an  unusual 
position  among  international  commodity  organisations  in  that  it  is  concerned  not  only  with 
trade and industry but also with the environment. For that reason, the Commission considers 
that the legal basis should be a dual one, linking Article 175 of the Treaty to Article 133. In 
this case, the new International Tropical Timber Agreement 2006 should also be approved by 
the Community. 

The  financial  provisions  are  noteworthy  for  the  fact  that  the  new  Agreement,  like  the  two 
instruments that preceded it, does not include financial clauses requiring market intervention 
involving  compulsory  financial  contributions  by  members  over  and  above  their  existing 
obligations in respect of contributions to the administrative budget. For practical management 
reasons,  given  enlargement  to  27  Member  States,  the  Commission  proposes  that  the 
Community  should  cover  the  compulsory  expenditure  inherent  in  the  administrative  budget 
account.  The  Member  States  of  the  European  Union  will  thus  be  able  to  make  voluntary 
contributions to the budget of the special account. In this way, the Commission aims to ensure 
shared management of the Agreement while also taking into account the individual interests 
of all Member States. 

The purpose of this proposal for a decision is therefore to approve the International Tropical 
Timber Agreement 2006 and authorise the Community to deposit the instrument of approval 
with the United Nations international treaties office. 

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Doc. 9773/05 EU Restricted of 17 June 2005. 

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2006/0263 (ACC) 

Proposal for a 

COUNCIL DECISION 

on the signing and conclusion on behalf of the European Community of the 2006 
International Tropical Timber Agreement presented by the Commission 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Articles 
133 and 175 thereof, read in conjunction with the first subparagraph of Article 300(2) thereof, 

Having regard to the proposal from the Commission, 

Whereas:  

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

On  27  January  2006  the  negotiating  conference  established  under  the  aegis  of 
UNCTAD (United Nations Conference on Trade and Development) approved the text 
of the International Tropical Timber Agreement, 2006. 

This  new  Agreement  was  negotiated  to  replace  the  International  Tropical  Timber 
Agreement 1994, as extended, which will remain in force until the entry into force of 
the 2006 Agreement. 

The International Tropical Timber Agreement 2006 is open for signing and deposit of 
the  instruments  of  ratification,  acceptance  or  approval  from  3  April  2006  and  will 
remain  so  until  one  month  after  its  final  entry  into  force,  scheduled  for 
1 February 2008, or any subsequent date. 

The  objectives  of  the  new  Agreement  are  consistent  with  both  the  common 
commercial policy and the environmental policy. 

The  European  Community  was  a  party  to  the  International  Tropical  Timber 
Agreement 1994. The new Agreement will continue to promote the European Union’s 
sustainable  development  objectives  and  it  is  therefore  in  its  interest  to  approve  the 
successor agreement. 

As  the  compulsory  contributions  by  the  consumer  members  of  the  International 
Tropical Timber Organisation are assessed primarily in terms of the volume of tropical 
timber they import, the European Community will provide financial contributions for 
the  administration  of  the  International  Tropical  Timber  Agreement  2006,  while  the 
Member  States  will  be  able  to  make  voluntary financial contributions to the  planned 
actions via the special account of the Agreement, 

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HAS DECIDED AS FOLLOWS: 

Article 1 

(1) 

The  Community  shall  sign  the  International  Tropical  Timber  Agreement  2006  (“the 
Agreement”), which is hereby approved on behalf of the Community.  

(2) 

The text of the Agreement is attached to this Decision. 

Article 2 

(1) 

(2) 

The President of the Council is hereby authorised to designate the person or persons 
empowered to sign the agreement and deposit the instrument of approval on behalf of 
the Community with the Secretary-General of the United Nations, in accordance with 
Article 36(1) and (2) of the Agreement. 

The President of the Council is hereby authorised to designate the person or persons 
empowered to deposit, on behalf of the Community, the declaration of competence 
set out in annex to this Decision, in accordance with Article 36(3) of the Agreement. 

Done at Brussels, 

For the Council 
The President 

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ANNEX 

Community Declaration in accordance with Article 36(3) of the Agreement 

In  accordance  with  Article  36(3)  of  the  International  Tropical  Timber  Agreement  2006,  this 
declaration indicates the powers transferred to the European Community by its Member States in 
the matters governed by the Agreement. 

The  Community  declares  that,  in  accordance  with  the  Treaty  establishing  the  European 
Community, and in particular Article 133 thereof, it has exclusive powers in the field of common 
commercial policy, and in particular the conclusion of agreements in relation to the international 
trade in goods. 

The  Community  declares  in  addition  that,  in  accordance  with  Article  175  of  the  Treaty 
establishing  the  European  Community,  it  is  competent  to  conclude  international  agreements  in 
the field of the environment which contribute to the pursuit of the following objectives: 

–  preserving, protecting and improving the quality of the environment; 

–  protecting human health; 

–  prudent and rational utilisation of natural resources; 

–  promoting  measures  at  international  level  to  deal  with  regional  or  worldwide  environmental 

problems. 

In environmental matters, the Community shares powers with its Member States. 

The  scope  and  the  exercise  of  Community  powers  are,  by  their  nature,  subject  to  continuous 
development,  and  the  Community  will  complete  or  amend  this  declaration,  if  necessary,  in 
accordance with Article 36 (3) of the Agreement. 

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THE 2006 INTERNATIONAL TROPICAL TIMBER AGREEMENT 

ANNEX  

The Parties to this Agreement, 

PREAMBLE 

(a)  Recalling the Declaration and the Programme of Action on the Establishment of a New 
International Economic Order; the Integrated Programme for Commodities; the New Partnership 
for Development; and the Spirit of São Paulo and São Paulo Consensus, as adopted by UNCTAD 
XI; 

(b)  Also  recalling 

the 
International  Tropical  Timber  Agreement,  1994,  and  recognizing  the  work  of  the  International 
Tropical  Timber  Organization  and  its  achievements  since  its  inception,  including  a  strategy  for 
achieving international trade in tropical timber from sustainably managed sources; 

the  International  Tropical  Timber  Agreement,  1983,  and 

(c)  Further recalling the Johannesburg Declaration and Plan of Implementation as adopted 
by  the  World  Summit  on  Sustainable  Development  in  September  2002,  the  United  Nations 
Forum  on  Forests  established  in  October  2000  and  the  associated  creation  of  the  Collaborative 
Partnership on Forests, of which the International Tropical Timber Organization is a member, as 
well  as  the  Rio  Declaration  on  Environment  and  Development,  the  Non-Legally  Binding 
Authoritative Statement of Principles for a Global Consensus on the Management, Conservation 
and Sustainable Development of All Types of Forests, and the relevant Chapters of Agenda 21 as 
adopted by the United Nations Conference on Environment and Development in June 1992, the 
United  Nations  Framework  Convention  on  Climate  Change,  the  United Nations  Convention  on 
Biological Diversity and the United Nations Convention to Combat Desertification; 

(d)  Recognizing that States have, in accordance with the Charter of the United Nations and 
the principles of international law, the sovereign right to exploit their own resources pursuant to 
their own environmental policies and have the responsibility to ensure that activities within their 
jurisdiction  and  control  do  not  cause  damage  to  the  environment  of  other  States  or  of  areas 
beyond  the  limits  of  national  jurisdiction,  as  set  forth  in  principle  1(a)  of  the  Non-Legally 
Binding  Authoritative  Statement  of  Principles  for  a  Global  Consensus  on  the  Management, 
Conservation and Sustainable Development of All Types of Forests; 

(e)  Recognizing  the  importance  of  timber  and  related  trade  to  the  economies  of  timber 

producer countries; 

(f)  Also  recognizing  the  importance  of  the  multiple  economic,  environmental  and  social 
benefits provided by forests, including timber and non-timber forest products and environmental 
services, in the context of sustainable forest management, at local, national and global levels and 
the  contribution  of  sustainable  forest  management  to  sustainable  development  and  poverty 
alleviation  and  the  achievement  of  internationally  agreed  development  goals,  including  those 
contained in the Millennium Declaration; 

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(g)  Further recognizing the need to promote and apply comparable criteria and indicators 
for  sustainable  forest  management  as  important  tools  for  all  members  to  assess,  monitor  and 
promote progress toward sustainable management of their forests; 

(h)  Taking  into  account  the  linkages  of  the  tropical  timber  trade  and  the  international 
timber  market  and  wider  global  economy  and  the  need  to  take  a  global  perspective  in  order  to 
improve transparency in the international timber trade; 

(i)  Reaffirming  their  commitment  to  moving  as  rapidly  as  possible  toward  achieving 
exports  of  tropical  timber  and  timber  products  from  sustainably  managed  sources  (ITTO 
Objective 2000) and recalling the establishment of the Bali Partnership Fund; 

(j)  Recalling the commitment made by consumer members in January 1994 to maintain or 

achieve the sustainable management of their forests; 

(k)  Noting the role of good governance, clear land tenure arrangements and cross-sectoral 

coordination in achieving sustainable forest management and legally sourced timber exports; 

(l)  Recognizing 

international 
organizations,  the  private  sector and  civil  society,  including  indigenous and  local  communities, 
and other stakeholders in promoting sustainable forest management; 

importance  of  collaboration  among  members, 

the 

(m)  Also  recognizing  the  importance  of  such  collaboration  for  improving  forest  law 

enforcement and promoting trade from legally harvested timber; 

(n)  Noting  that  enhancing  the  capacity  of  forest-dependent  indigenous  and  local 
communities, including those who are forest owners and managers, can contribute to achieving 
the objectives of this Agreement; 

(o)  Also noting the need to improve the standard of living and working conditions within 
the  forest  sector,  taking  into  account  relevant  internationally  recognized  principles  on  these 
matters, and relevant International Labour Organization Conventions and instruments; 

(p)  Noting that timber is an energy-efficient, renewable and environmentally friendly raw 

material compared with competing products; 

(q)  Recognizing  the  need  for  increased  investment  in  sustainable  forest  management, 
including  through  reinvesting  revenues  generated  from  forests,  including  from  timber-related 
trade; 

(r)  Also  recognizing  the  benefits  of  market  prices  that  reflect  the  costs  of  sustainable 

forest management; 

(s)  Further recognizing the need for enhanced and predictable financial resources from a 

broad donor community to help achieve the objectives of this Agreement; 

(t)  Noting the special needs of least developed tropical timber producer countries. 

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Have agreed as follows; 

CHAPTER I 
OBJECTIVES 

Article 1 

OBJECTIVES 

The objectives of the International Tropical Timber Agreement, 2006 (hereinafter referred to as 
"this  Agreement")  are  to  promote  the  expansion  and  diversification  of  international  trade  in 
tropical  timber  from  sustainably  managed  and  legally  harvested  forests  and  to  promote  the 
sustainable management of tropical timber producing forests by: 

(a) Providing an effective framework for consultation, international cooperation and policy 
development  among  all  members  with  regard  to  all  relevant  aspects  of  the  world  timber 
economy; 

(b)  Providing  a  forum  for  consultation  to  promote  non-discriminatory  timber  trade 

practices; 

(c)  Contributing to sustainable development and to poverty alleviation; 

(d)  Enhancing  the  capacity  of  members  to  implement  strategies  for  achieving  exports  of 

tropical timber and timber products from sustainably managed sources; 

(e)  Promoting  improved  understanding  of  the  structural  conditions  in  international 
markets,  including  long-term  trends  in  consumption  and  production,  factors  affecting  market 
access, consumer preferences and prices, and conditions leading to prices which reflect the costs 
of sustainable forest management; 

(f)  Promoting and supporting research and development with a view to improving forest 
management  and  efficiency  of  wood  utilization  and  the  competitiveness  of  wood  products 
relative to other materials, as well as increasing the capacity to conserve and enhance other forest 
values in timber producing tropical forests; 

(g)  Developing  and  contributing  towards  mechanisms  for  the  provision  of  new  and 
additional  financial  resources  with  a  view  to  promoting  the  adequacy  and  predictability  of 
funding  and  expertise  needed  to  enhance  the  capacity  of  producer  members  to  attain  the 
objectives of this Agreement;  

(h)  Improving  market 

the 
intelligence  and  encouraging 
international timber market with a view to ensuring greater transparency and better information 
on  markets  and  market  trends,  including  the  gathering,  compilation  and  dissemination  of  trade 
related data, including data related to species being traded; 

information  sharing  on 

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(i)  Promoting increased and further processing of tropical timber from sustainable sources 
in  producer  member  countries,  with  a  view  to  promoting  their  industrialization  and  thereby 
increasing their employment opportunities and export earnings; 

(j)  Encouraging members to support and develop tropical timber reforestation, as well as 
rehabilitation  and  restoration  of  degraded  forest  land,  with  due  regard  for  the  interests  of  local 
communities dependent on forest resources; 

(k)  Improving  marketing  and  distribution  of  tropical  timber  and  timber  product  exports 
from sustainably managed and legally harvested sources and which are legally traded, including 
promoting consumer awareness; 

(l)  Strengthening 

the  collection,  processing  and 
dissemination  of  statistics  on  their  trade  in  timber  and  information  on  the  sustainable 
management of their tropical forests; 

the  capacity  of  members  for 

(m)  Encouraging members to develop national policies aimed at sustainable utilization and 
conservation  of  timber  producing  forests,  and  maintaining ecological  balance, in  the  context  of 
the tropical timber trade; 

(n)  Strengthening  the  capacity  of  members  to  improve  forest  law  enforcement  and 

governance, and address illegal logging and related trade in tropical timber; 

(o)  Encouraging information sharing for a better understanding of voluntary mechanisms 
such  as,  inter  alia,  certification,  to  promote  sustainable  management  of  tropical  forests,  and 
assisting members with their efforts in this area; 

(p)  Promoting  access  to,  and  transfer  of,  technologies  and  technical  cooperation  to 
implement the objectives of this Agreement, including on concessional and preferential terms and 
conditions, as mutually agreed; 

(q)  Promoting better understanding of the contribution of non-timber forest products and 
environmental  services  to  the  sustainable  management  of  tropical  forests  with  the  aim  of 
enhancing the capacity of members to develop strategies to strengthen such contributions in the 
context  of  sustainable  forest  management,  and  cooperating  with  relevant  institutions  and 
processes to this end; 

(r)  Encouraging  members to recognize the role of forest-dependent indigenous and local 
communities in achieving sustainable forest management and develop strategies to enhance the 
capacity of these communities to sustainably manage tropical timber producing forests; and 

(s) 

Identifying and addressing relevant new and emerging issues. 

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CHAPTER II 
DEFINITIONS 

Article 2 

DEFINITIONS 

For the purposes of this Agreement: 

1. 
"Tropical  timber"  means  tropical  wood  for  industrial  uses,  which  grows  or  is  produced  in 
the countries situated between the Tropic of Cancer and the Tropic of Capricorn. The term covers 
logs, sawn wood, veneer sheets and plywood; 

“Sustainable  forest  management”  will  be  understood  according  to  the  Organization’s 

2. 
relevant policy documents and technical guidelines; 

3. 
"Member"  means  a  Government,  the  European  Community  or  any  intergovernmental 
organization referred to in article 5, which has consented to be bound by this Agreement whether 
it is in force provisionally or definitively; 

4. 
"Producer  member"  means  any  member  situated  between  the  Tropic  of  Cancer  and  the 
Tropic  of  Capricorn  with  tropical  forest  resources  and/or  a  net  exporter  of  tropical  timber  in 
volume terms which is listed in annex A and which becomes a party to this Agreement, or any 
member  with  tropical  forest resources  and/or a net  exporter  of  tropical timber  in  volume  terms 
which is not so listed and which becomes a party to this Agreement and which the Council, with 
the consent of that member, declares to be a producer member; 

"Consumer  member"  means  any  member  which  is  an  importer  of  tropical  timber  listed  in 
5. 
annex B  which  becomes  a  party  to  this  Agreement,  or  any  member  which  is  an  importer  of 
tropical  timber  not  so  listed  which  becomes  a  party  to  this  Agreement  and  which  the  Council, 
with the consent of that member, declares to be a consumer member; 

"Organization"  means  the  International  Tropical  Timber  Organization  established  in 

6. 
accordance with article 3; 

"Council" means the International Tropical Timber Council established in accordance with 

7. 
article 6; 

"Special  vote"  means  a  vote  requiring  at  least  two  thirds  of  the  votes  cast  by  producer 
8. 
members  present  and  voting  and  at  least  60  per  cent  of  the  votes  cast  by  consumer  members 
present and voting, counted separately, on condition that these votes are cast by at least half of 
the producer members present and voting and at least half of the consumer members present and 
voting. 

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9. 
"Simple distributed majority vote" means a vote requiring more than half of the votes cast 
by  producer  members  present  and  voting  and  more  than  half  of  the  votes  cast  by  consumer 
members present and voting, counted separately; 

10.  "Financial biennium" means the period from 1 January of one year to 31 December of the 
following year. 

11.  "Freely  convertible  currencies"  means  the  euro,  the  Japanese  yen,  the  pound  sterling,  the 
Swiss  franc,  the  United  States  dollar,  and  any  other  currency  which  has  been  designated  from 
time to time by a competent international monetary organization as being in fact widely used to 
make  payments  for  international  transactions  and  widely  traded  in  the  principal  exchange 
markets. 

12.  For purposes of the calculation of the distribution of votes under article 10, paragraph 2(b), 
"tropical forest resources" means natural closed forests and forest plantations located between the 
Tropic of Cancer and the Tropic of Capricorn. 

CHAPTER III 
ORGANIZATION AND ADMINISTRATION 

Article 3 

HEADQUARTERS AND STRUCTURE OF THE INTERNATIONAL  

TROPICAL TIMBER ORGANIZATION 

1.  The  International  Tropical  Timber  Organization  established  by  the  International  Tropical 
Timber Agreement, 1983 shall continue in being for the purposes of administering the provisions 
and supervising the operation of this Agreement. 

2.  The  Organization  shall  function  through  the  Council  established  under  article  6,  the 
committees and other subsidiary bodies referred to in article 26 and the Executive Director and 
staff. 

3.  The  headquarters  of  the  Organization  shall  at  all  times  be  located  in  the  territory  of  a 
member. 

4.  The headquarters of the Organization shall be in Yokohama, unless the Council, by special 
vote in accordance with article 12, decides otherwise. 

5.  Regional offices of the Organization may be established if the Council so decides by special 
vote in accordance with article 12. 

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Article 4 

MEMBERSHIP IN THE ORGANIZATION 

There shall be two categories of membership in the Organization, namely: 

(a) 

(b) 

Producer; and 

Consumer.  

Article 5 

MEMBERSHIP BY INTERGOVERNMENTAL ORGANIZATIONS 

1.  Any  reference  in  this  Agreement  to  "Governments"  shall  be  construed  as  including  the 
European  Community  and  other 
intergovernmental  organizations  having  comparable 
responsibilities  in  respect  of  the  negotiation,  conclusion  and  application  of  international 
agreements, in particular commodity agreements. Accordingly, any reference in this Agreement 
to signature, ratification, acceptance or approval, or to notification of provisional application, or 
to  accession  shall,  in  the  case  of  such  organizations,  be  construed  as  including  a  reference  to 
signature, ratification, acceptance or approval, or to notification of provisional application, or to 
accession, by such organizations.  

2. 
In  the  case  of  voting  on  matters  within  their  competence,  the  European  Community  and 
other  intergovernmental  organizations  referred  to  in  paragraph  1  shall  vote  with  a  number  of 
votes equal to the total number of votes attributable to their member States which are parties to 
the  Agreement  in  accordance  with  article  10.  In  such  cases,  the  member  States  of  such 
organizations shall not be entitled to exercise their individual voting rights. 

CHAPTER IV 
INTERNATIONAL TROPICAL TIMBER COUNCIL 

Article 6 

COMPOSITION OF THE INTERNATIONAL  

TROPICAL TIMBER COUNCIL 

1.  The  highest  authority  of  the  Organization  shall  be  the  International  Tropical  Timber 
Council, which shall consist of all the members of the Organization. 

2.  Each member shall be represented in the Council by one representative and may designate 
alternates and advisers to attend sessions of the Council. 

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3.  An alternate shall be empowered to act and vote on behalf of the representative during the 
latter's absence or in special circumstances. 

Article 7 

POWERS AND FUNCTIONS OF THE COUNCIL 

The Council shall exercise all such powers and perform or arrange for the performance of 
all such functions as are necessary to carry out the provisions of this Agreement. In particular, it 
shall: 

(a)  By special vote in accordance with article 12, adopt such rules and regulations as 
are necessary to carry out the provisions of this Agreement and as are consistent 
therewith,  including  its  own  rules  of  procedure  and  the  financial  rules  and  staff 
regulations  of  the  Organization.  Such  financial  rules  and  regulations  shall,  inter 
alia, govern the receipt and expenditure of funds under the accounts established in 
article  18.  The  Council  may,  in  its  rules  of  procedure,  provide  for  a  procedure 
whereby it may, without meeting, decide specific questions; 

(b)  Take  such  decisions  as  are  necessary  to  ensure  the  effective  and  efficient 

functioning and operation of the Organization; and 

(c)  Keep such records as are required for the performance of its functions under this 

Agreement. 

Article 8 

CHAIRMAN AND VICE-CHAIRMAN OF THE COUNCIL 

1.  The  Council  shall  elect  for  each  calendar  year  a  Chairman  and  a  Vice-Chairman,  whose 
salaries shall not be paid by the Organization. 

2.  The Chairman and the Vice-Chairman shall be elected, one from among the representatives 
of producer members and the other from among the representatives of consumer members. 

3.  These  offices  shall  alternate  each  year  between  the  two  categories  of  members,  provided, 
however,  that  this  shall  not  prohibit  the  re-election  of  either  or  both,  under  exceptional 
circumstances. 

4. 
In the temporary absence of the Chairman, the Vice-Chairman shall assume the functions of 
the Chairman. In the temporary absence of both the Chairman and the Vice-Chairman, or in the 
absence of one or both of them for the rest of the term for which they were elected, the Council 
may  elect  new  officers  from  among  the  representatives  of  the  producer  members  and/or  from 
among the representatives of the consumer members, as the case may be, on a temporary basis or 
for the rest of the term for which the predecessor or predecessors were elected. 

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Article 9 

SESSIONS OF THE COUNCIL 

1.  As a general rule, the Council shall hold at least one regular session a year. 

2.  The  Council  shall  meet  in  special  session  whenever  it  so  decides  or  at  the  request  of  any 
member  or  the  Executive  Director,  in  agreement  with  the  Chairman  and  Vice-Chairman  of  the 
Council, and: 

(a)  A majority of producer members or a majority of consumer members; or 

(b)  A majority of members.  

3.  Sessions  of  the  Council  shall  be  held  at  the  headquarters  of  the  Organization  unless  the 
Council,  by  special  vote  in  accordance  with  article  12,  decides  otherwise.  In  this  regard,  the 
Council shall seek to convene alternate sessions of the Council outside headquarters, preferably 
in a producer country. 

In  considering  the  frequency  and  location  of  its  sessions, the  Council  shall  seek  to  ensure 

4. 
the availability of sufficient funds. 

5.  Notice of any sessions and the agenda for such sessions shall be communicated to members 
by  the  Executive  Director  at  least  six  weeks  in  advance,  except  in  cases  of  emergency,  when 
notice shall be communicated at least seven days in advance. 

Article 10 

DISTRIBUTION OF VOTES 

1.  The  producer  members  shall  together  hold  1,000  votes  and  the  consumer  members  shall 
together hold 1,000 votes. 

2.  The votes of the producer members shall be distributed as follows: 

(a)  Four hundred votes shall be distributed equally among the three producing regions 
of  Africa,  Asia-Pacific  and  Latin  America  and  the  Caribbean.  The  votes  thus 
allocated  to  each  of  these  regions  shall  then  be  distributed  equally  among  the 
producer members of that region; 

(b)  Three  hundred  votes  shall  be  distributed  among  the  producer  members  in 
accordance with their respective shares of the total tropical forest resources of all 
producer members; and 

(c)  Three  hundred  votes  shall  be  distributed  among  the  producer  members  in 
proportion to the average of the values of their respective net exports of tropical 

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timber  during  the  most  recent  three-year  period  for  which  definitive  figures  are 
available. 

3.  Notwithstanding the provisions of paragraph 2 of this article, the total votes allocated to the 
producer  members  from  the  African  region,  calculated  in  accordance  with  paragraph  2  of  this 
article, shall be distributed equally among all producer members from the African region. If there 
are any remaining votes, each of these votes  shall be allocated to a producer member from the 
African region: the first to the producer member which is allocated the highest number of votes 
calculated  in  accordance  with  paragraph  2  of  this  article,  the  second  to  the  producer  member 
which  is  allocated  the  second  highest  number  of  votes,  and  so  on  until  all  the  remaining  votes 
have been distributed. 

4.  Subject  to  paragraph  5  of  this  article,  the  votes  of  the  consumer  members  shall  be 
distributed  as  follows:  each  consumer  member  shall  have  10  initial  votes;  the  remaining  votes 
shall be distributed among the consumer members in proportion to the average volume of their 
respective  net  imports  of  tropical  timber  during  the  five-year  period  commencing  six  calendar 
years prior to the distribution of votes. 

5.  The  votes  distributed  to  a  consumer  member  for  a  given  biennium  shall  not  exceed  5  per 
cent over and above the votes distributed to that member for the previous biennium. Excess votes 
shall be redistributed among the consumer members in proportion to the average volume of their 
respective  net  imports  of  tropical  timber  during  the  five-year  period  commencing  six  calendar 
years prior to the distribution of votes. 

6.  The  Council  may,  by  special  vote  in  accordance  with  article  12,  adjust  the  minimum 
percentage required for a special vote by consumer members if it deems it necessary. 

7.  The Council shall distribute the votes for each financial biennium at the beginning of its first 
session of that biennium in accordance with the provisions of this article. Such distribution shall 
remain in effect for the rest of that biennium, except as provided for in paragraph 8 of this article. 

8.  Whenever the membership of the Organization changes or when any member has its voting 
rights suspended or restored under any provision of this Agreement, the Council shall redistribute 
the votes within the affected category or categories of members in accordance with the provisions 
of  this  article.  The  Council  shall,  in  that  event,  decide  when  such  redistribution  shall  become 
effective. 

9.  There shall be no fractional votes. 

Article 11 

VOTING PROCEDURE OF THE COUNCIL 

1.  Each member shall be entitled to cast the number of votes it holds, and no member shall be 
entitled to divide its votes. A member may, however, cast differently from such votes any votes 
that it is authorized to cast under paragraph 2 of this article. 

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2.  By  written  notification  to  the  Chairman  of  the  Council,  any  producer  member  may 
authorize, under its own responsibility, any other producer member, and any consumer member 
may  authorize,  under  its  own  responsibility,  any  other  consumer  member,  to  represent  its 
interests and to cast its votes at any meeting of the Council. 

3.  When abstaining, a member shall be deemed not to have cast its votes. 

Article 12 

DECISIONS AND RECOMMENDATIONS OF THE COUNCIL 

1.  The  Council  shall  endeavour  to  take  all  decisions  and  to  make  all  recommendations  by 
consensus. 

If  consensus  cannot  be  reached,  the  Council  shall  take  all  decisions  and  make  all 
2. 
recommendations  by  a  simple  distributed  majority  vote,  unless  this  Agreement  provides  for  a 
special vote. 

3.  Where a member avails itself of the provisions of article 11, paragraph 2, and its votes are 
cast  at  a  meeting  of  the  Council,  such  member  shall,  for  the  purposes  of  paragraph  1  of  this 
article, be considered as present and voting. 

Article 13 

QUORUM FOR THE COUNCIL 

1.  The quorum for any meeting of the Council shall be the presence of a majority of members 
of each category referred to in article 4, provided that such members hold at least two thirds of 
the total votes in their respective categories.  

2. 
If there is no quorum in accordance with paragraph 1 of this article on the day fixed for the 
meeting and on the following day, the quorum on the subsequent days of the session shall be the 
presence of a  majority of  members of each category referred to in article 4, provided that such 
members hold a majority of the total votes in their respective categories.  

3.  Representation in accordance with article 11, paragraph 2, shall be considered as presence.  

Article 14 

EXECUTIVE DIRECTOR AND STAFF 

1.  The  Council  shall,  by  special  vote  in  accordance  with  article  12,  appoint  the  Executive 
Director. 

2.  The terms and conditions of appointment of the Executive Director shall be determined by 
the Council. 

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3.  The  Executive  Director  shall  be  the  chief  administrative  officer  of  the  Organization  and 
shall  be  responsible  to  the  Council  for  the  administration  and  operation  of  this  Agreement  in 
accordance with decisions of the Council. 

4.  The Executive Director shall appoint staff in accordance with regulations to be established 
by the Council. The staff shall be responsible to the Executive Director. 

5.  Neither the Executive Director nor any member of the staff shall have any financial interest 
in the timber industry or trade, or associated commercial activities. 

In the performance of their duties, the Executive Director and staff shall not seek or receive 
6. 
instructions  from  any  member  or  from  any  authority  external  to  the  Organization.  They  shall 
refrain from any action which might reflect adversely on their positions as international officials 
ultimately  responsible  to  the  Council.  Each  member  shall  respect  the  exclusively  international 
character of the responsibilities of the Executive Director and staff and shall not seek to influence 
them in the discharge of their responsibilities. 

Article 15 

COOPERATION AND COORDINATION WITH OTHER ORGANIZATIONS 

In  pursuing  the  objectives  of  the  Agreement,  the  Council  shall  make  arrangements  as 
1. 
appropriate  for  consultations  and  cooperation  with  the  United  Nations  and  its  organs  and 
specialized  agencies,  including  the  United  Nations  Conference  on  Trade  and  Development 
(UNCTAD) and other relevant international and regional organizations and institutions, as well 
as the private sector, non-governmental organizations and civil society. 

2.  The Organization shall, to the maximum extent possible, utilize the facilities, services and 
expertise  of  intergovernmental,  governmental  or  non-governmental  organizations,  civil  society 
and the private sector in order to avoid duplication of efforts in achieving the objectives of this 
Agreement and to enhance the complementarity and the efficiency of their activities. 

3.  The  Organization  shall  take  full  advantage  of  the  facilities  of  the  Common  Fund  for 
Commodities.  

Article 16 

ADMISSION OF OBSERVERS 

The Council may invite any member or observer State of the United Nations which is not party to 
this  Agreement,  or  any  organization  referred  to  in  article  15  interested  in  the  activities  of  the 
Organization, to attend as observers the sessions of the Council. 

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CHAPTER V 
PRIVILEGES AND IMMUNITIES 

Article 17 

PRIVILEGES AND IMMUNITIES 

1.  The  Organization  shall  have  legal  personality.  It  shall  in  particular  have  the  capacity  to 
contract,  to  acquire  and  dispose  of  movable  and  immovable  property,  and  to  institute  legal 
proceedings. 

2.  The status, privileges and immunities of the Organization, of its Executive Director, its staff 
and experts, and of representatives of members while in the territory of Japan shall continue to be 
governed by the Headquarters Agreement between the Government of Japan and the International 
Tropical Timber Organization signed at Tokyo on 27 February 1988, with such amendments as 
may be necessary for the proper functioning of this Agreement. 

3.  The Organization may conclude, with one or more countries, agreements to be approved by 
the  Council  relating  to  such  capacity,  privileges  and  immunities  as  may  be  necessary  for  the 
proper functioning of this Agreement. 

4. 
If the headquarters of the Organization is moved to another country, the member in question 
shall,  as  soon  as  possible,  conclude  with  the  Organization  a  headquarters  agreement  to  be 
approved by the Council. Pending the conclusion of such an Agreement, the Organization shall 
request the new host Government to grant, within the limits of its national legislation, exemption 
from  taxation  on  remuneration  paid  by  the  Organization  to  its  employees,  and  on  the  assets, 
income and other property of the Organization. 

5.  The  Headquarters  Agreement  shall  be  independent  of  this  Agreement.  It  shall,  however, 
terminate: 

(a)  By agreement between the host Government and the Organization; 

(b) 

In the event of the headquarters of the Organization being moved from the country 
of the host Government; or 

(c) 

In the event of the Organization ceasing to exist. 

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CHAPTER VI 
FINANCE 

Article 18 

FINANCIAL ACCOUNTS 

1.  There shall be established: 

(a)  The Administrative Account, which is an assessed contribution account; 

(b)  The  Special  Account  and  The  Bali  Partnership  Fund,  which  are  voluntary 

contribution accounts; and 

(c)  Other accounts that the Council might consider appropriate and necessary. 

2.  The  Council  shall  establish,  in  accordance  with  article  7,  financial  rules  that  provide 
transparent  management  and  administration  of  the  accounts,  including  rules  covering  the 
settlement of accounts on termination or expiry of this Agreement. 

3.  The  Executive  Director  shall  be  responsible  for,  and  report  to  the  Council  on  the 
administration of the financial accounts. 

Article 19 

ADMINISTRATIVE ACCOUNT 

1.  The expenses necessary for the administration of this Agreement shall be brought into the 
Administrative Account and shall be met by annual contributions paid by members in accordance 
with  their  respective  constitutional  or  institutional  procedures  and  assessed  in  accordance  with 
paragraphs 4, 5 and 6 of this article. 

2.  The Administrative Account shall include: 

(a)  Basic  administrative  costs  such  as  salaries  and  benefits,  installation  costs,  and 

official travel; and  

(b)  Core  operational  costs  such  as  those  related  to  communication  and  outreach, 
expert  meetings  convened  by  the  Council  and  preparation  and  publication  of 
studies and assessments pursuant to articles 24, 27 and 28 of this Agreement. 

3.  The expenses of delegations to the Council, the committees and any other subsidiary bodies 
of the Council referred to in article 26 shall be met by the members concerned. In cases where a 
member requests special services from the Organization, the Council shall require that member to 
pay the costs of such services. 

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4.  Before  the  end  of  each  financial  biennium,  the  Council  shall  approve  the  budget  for  the 
Administrative  Account  of  the  Organization  for  the  following  biennium  and  shall  assess  the 
contribution of each member to that budget. 

5.  Contributions to the Administrative Account for each financial biennium shall be assessed 
as follows: 

(a)  The costs referred to in paragraph 2(a) of this article shall be shared equally among 
producer  and  consumer  members  and  assessed  in  the  proportion  the  number  of 
each member's votes bears to the total votes of the member's group; 

(b)  The  costs  referred  to  in  paragraph  2(b)  of  this  article  shall  be  shared  among 
members  in  the  proportions  of  20  per  cent  for  producers  and  80  per  cent  for 
consumers  and  assessed  in  the  proportion  the  number  of  each  member's  votes 
bears to the total votes of the member's group; 

(c)  The costs referred to in paragraph 2(b) of this article shall not exceed one third of 
the  costs  referred  to  in  paragraph  2(a)  of  this  article.  The  Council  may,  by 
consensus, decide to vary this limit for a specific financial biennium; 

(d)  The  Council  may  review  how  the  Administrative  Account  and  the  voluntary 
accounts contribute to the efficient and effective operation of the Organization in 
the context of the evaluation referred to in article 33; and 

(e) 

In  assessing  contributions,  the  votes  of  each  member  shall  be  calculated  without 
regard  to  the  suspension  of  any  member's  voting  rights  or  any  redistribution  of 
votes resulting therefrom. 

6.  The initial contribution of any member joining the Organization after the entry into force of 
this Agreement shall be assessed by the Council on the basis of the number of votes to be held by 
that member and the period remaining in the current financial biennium, but the assessment made 
upon other members from the current financial biennium shall not thereby be altered. 

7.  Contributions  to  the  Administrative  Account  shall  become  due  on  the  first  day  of  each 
financial year. Contributions of members in respect of the financial biennium in which they join 
the Organization shall be due on the date on which they become members. 

If  a  member  has  not  paid  its  full  contribution  to  the  Administrative  Account  within  four 
8. 
months  after  such contribution  becomes  due  in accordance with  paragraph  7  of  this  article, the 
Executive  Director  shall  request  that  member  to  make  payment  as  quickly  as  possible.  If  that 
member has still not paid its contribution within two months after such request, that member shall 
be  requested  to  state  the  reasons  for  its  inability  to  make  payment.  If  at  the  expiry  of  seven 
months  from  the  due  date  of  contribution,  that  member  has  still  not  paid  its  contribution,  its 
voting rights shall be suspended until such time as it has paid in full its contribution, unless the 
Council,  by  special  vote  in  accordance  with  article  12,  decides  otherwise.  If  a  member  has  not 
paid  its  contribution  in  full  for  two  consecutive  years,  taking  into  account  the  provisions 
contained  in  article  30,  that  member  shall  become  ineligible  to  submit  project  or  pre-project 
proposals for funding consideration under article 25, paragraph 1. 

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9. 
If a member has paid its full contribution to the Administrative Account within four months 
after such contribution becomes due in accordance with paragraph 7 of this article, that member's 
contribution shall receive a discount as may be established by the Council in the financial rules of 
the Organization. 

10.  A member whose rights have been suspended under paragraph 8 of this article shall remain 
liable to pay its contribution. 

Article 20 

SPECIAL ACCOUNT 

1. 

The Special Account shall comprise two sub-accounts: 

(a)  The Thematic Programmes Sub-Account; and 

(b)  The Project Sub-Account. 

2. 

The possible sources of finance for the Special Account shall be: 

(a)  The Common Fund for Commodities; 

(b)  Regional and international financial institutions; 

(c)  Voluntary contributions from members; and 

(d)  Other sources. 

3.  The  Council  shall  establish  criteria  and  procedures  for  the  transparent  operation  of  the 
Special  Account.  Such  procedures  shall  take  into  account  the  need  for  balanced  representation 
among members, including contributing members, in the operation of the Thematic Programmes 
Sub-Account and the Project Sub-Account. 

4.  The  purpose  of  the  Thematic  Programmes  Sub-Account  shall  be  to  facilitate  unearmarked 
contributions  for  the  financing  of  approved  pre-projects,  projects  and  activities  consistent  with 
Thematic Programmes established by the Council on the basis of the policy and project priorities 
identified in accordance with articles 24 and 25. 

5.  The  donors  may  allocate  their  contributions  to  specific  Thematic  Programmes  or  may 
request the Executive Director to make proposals for allocating their contributions. 

6.  The  Executive  Director  shall  report  regularly  to  the  Council  on  the  allocation  and 
expenditure of funds within the Thematic Programmes Sub-Account and on the implementation, 
monitoring and evaluation of pre-projects, projects and activities and the financial needs for the 
successful implementation of the Thematic Programmes. 

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7.  The  purpose  of  the  Project  Sub-Account  shall  be  to  facilitate  earmarked  contributions  for 
the financing of pre-projects, projects and activities approved in accordance with articles 24 and 
25. 

8.  Earmarked contributions to the Project Sub-Account shall be used only for the pre-projects, 
projects and activities for which they were designated, unless otherwise decided by the donor in 
consultation  with  the  Executive  Director.  After  the  completion  or  termination  of  a  pre-project, 
project or activity, the use of any remaining funds shall be decided by the donor.  

9.  To  ensure  the  necessary  predictability  of  funds  for  the  Special  Account,  taking  into 
consideration the voluntary nature of contributions, members shall strive to replenish it to attain 
an adequate resource level to fully carry out the pre-projects, projects and activities approved by 
Council. 

10.  All receipts pertaining to specific pre-projects, projects and activities under the Project Sub-
Account  or  the  Thematic  Programmes  Sub-Account  shall  be  brought  into  the  respective  Sub-
Account.  All  expenditures  incurred  on  such  pre-projects,  projects  or  activities,  including 
remuneration and travel expenses of consultants and experts, shall be charged to the same Sub-
Account. 

11.  No  member  shall  be  responsible  by  reason  of  its  membership  in  the  Organization  for  any 
liability arising from any actions by any other member or entity in connection with pre-projects, 
projects or activities. 

12.  The  Executive  Director  shall  provide  assistance  in  the  development  of  proposals  for  pre-
projects, projects and activities in accordance with articles 24 and 25 and endeavour to seek, on 
such terms and conditions as the Council may decide, adequate and assured finance for approved 
pre-projects, projects and activities. 

Article 21 

THE BALI PARTNERSHIP FUND 

1.  A  Fund  for  sustainable  management  of  tropical  timber  producing  forests  is  hereby 
established  to  assist  producer  members  to  make  the  investments  necessary  to  achieve  the 
objective of article 1 (d) of this Agreement. 

2.  The Fund shall be constituted by: 

(a)  Contributions from donor members;  

(b)  Fifty  per  cent  of  income  earned  as  a  result  of  activities  related  to  the  Special 

Account; 

(c)  Resources  from  other  private  and  public  sources  which  the  Organization  may 

accept consistent with its financial rules; and 

d)  Other sources approved by the Council.  

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3.  Resources of the Fund shall be allocated by the Council only for pre-projects and projects 
for the purpose set out in paragraph 1 of this article and that have been approved in accordance 
with articles 24 and 25. 

In allocating resources of the Fund, the Council shall establish criteria and priorities for use 

4. 
of the Fund, taking into account: 

(a)  The  needs  of  members  for  assistance  in  achieving  exports  of  tropical timber  and 

timber products from sustainably managed sources;  

(b)  The  needs  of  members  to  establish  and  manage  significant  conservation 

programmes in timber producing forests; and 

(c)  The needs of members to implement sustainable forest management programmes. 

5.  The Executive Director shall provide assistance in the development of project proposals in 
accordance with article 25 and endeavour to seek, on such terms and conditions as the Council 
may decide, adequate and assured finance for projects approved by the Council.  

6.  Members shall strive to replenish the Bali Partnership Fund to an adequate level to further 
the objectives of the Fund. 

7.  The Council shall examine at regular intervals the adequacy of the resources available to the 
Fund and endeavour to obtain additional resources needed by producer members to achieve the 
purpose of the Fund. 

Article 22 

FORMS OF PAYMENT 

1.  Financial  contributions  to  accounts  established  under  article  18  shall  be  payable  in  freely 
convertible currencies and shall be exempt from foreign-exchange restrictions. 

2.  The  Council  may  also  decide  to  accept  other  forms  of  contributions  to  the  accounts 
established  under  article  18,  other  than  the  administrative  account,  including  scientific  and 
technical equipment or personnel, to meet the requirements of approved projects.  

Article 23 

AUDIT AND PUBLICATION OF ACCOUNTS 

1.  The Council shall appoint independent auditors for the purpose of auditing the accounts of 
the Organization. 

Independently audited statements of the accounts established under article 18 shall be made 
2. 
available to members as soon as possible after the close of each financial year, but not later than 
six months after that date, and be considered for approval by the Council at its next session, as 
appropriate. A summary of the audited accounts and balance sheet shall thereafter be published. 

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CHAPTER VII 
OPERATIONAL ACTIVITIES 

Article 24 

POLICY WORK OF THE ORGANIZATION 

In order to achieve the objectives set out in article 1, the Organization shall undertake policy 

1. 
work and project activities in an integrated manner.  

2.  The  policy  work  of  the  Organization  should  contribute  to  achieving  the  objectives  of  this 
Agreement for ITTO members broadly. 

3.  The Council shall establish on a regular basis an action plan to guide policy activities and 
identify  priorities  and  the  thematic  programmes  referred  to  in  article  20,  paragraph  4,  of  this 
Agreement.  Priorities  identified  in  the  action  plan  shall  be  reflected  in  the  work  programmes 
approved  by  the  Council.  Policy  activities  may  include  the  development  and  preparation  of 
guidelines, manuals, studies, reports, basic communication and outreach tools, and similar work 
identified in the Organization’s action plan. 

Article 25 

PROJECT ACTIVITIES OF THE ORGANIZATION 

1.  Members  and  the  Executive  Director  may  submit  pre-project  and  project  proposals  which 
contribute to the achievement of the objectives of this Agreement and one or more of the priority 
areas  for  work  or  thematic  programmes  identified  in  the  action  plan  approved  by  the  Council 
pursuant to article 24. 

2.  The  Council  shall  establish  criteria  for  approving  projects  and  pre-projects,  taking  into 
account  inter  alia  their  relevance  to  the  objectives  of  this  Agreement  and  to  priority  areas  for 
work  or  thematic  programmes,  their  environmental  and  social  effects,  their  relationship  to 
national forest programmes and strategies, their cost effectiveness, technical and regional needs, 
the need to avoid duplication of efforts, and the need to incorporate lessons learned. 

3.  The Council shall establish a schedule and procedure for submitting, appraising, approving 
and prioritizing pre-projects and projects seeking funding from the Organization, as well as for 
their implementation, monitoring and evaluation. 

4.  The  Executive  Director  may  suspend  disbursement  of  the  Organization's  funds  to  a  pre-
project  or  project  if  they  are  being  used  contrary  to  the  project  document  or  in  cases  of  fraud, 
waste, neglect or mismanagement. The Executive Director will provide to the Council at its next 
session a report for its consideration. The Council shall take appropriate action. 

5.  The  Council  may  establish,  according  to  agreed  criteria,  limits  on  the  number  of  projects 
and  pre-projects  that  a member  or  the  Executive  Director may  submit  in  a  given project  cycle. 

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The  Council  may  also  take  appropriate  measures,  including  suspension  or  termination  of  its 
sponsorship of any pre-project or project, following the report of the Executive Director. 

Article 26  

COMMITTEES AND SUBSIDIARY BODIES 

1.  The  following  are  hereby  established  as  Committees  of  the  Organization,  which  shall  be 
open to all members:  

(a)  Committee on Forest Industry; 

(b)  Committee on Economics, Statistics and Markets; 

(c)  Committee on Reforestation and Forest Management; and 

(d)  Committee on Finance and Administration. 

2.  The  Council  may,  by  special  vote  in  accordance  with  article  12,  establish  or  dissolve 
committees and subsidiary bodies as appropriate.  

3.  The Council shall determine the functioning and scope of work of the committees and other 
subsidiary bodies. The Committees and other subsidiary bodies shall be responsible to and work 
under the authority of the Council. 

CHAPTER VIII 
STATISTICS, STUDIES AND INFORMATION 

Article 27 

STATISTICS, STUDIES AND INFORMATION 

1.  The  Council  shall  authorize  the  Executive  Director  to  establish  and  maintain  close 
relationships with relevant intergovernmental, governmental and non-governmental organizations 
in order to help ensure the availability of recent and reliable data and information, including on 
production  and  trade  in  tropical  timber,  trends  and  data  discrepancies,  as  well  as  relevant 
information  on  non-tropical  timber  and  on  the  management  of  timber  producing  forests.  As 
deemed necessary for the operation of this Agreement, the Organization, in cooperation with such 
organizations, shall compile, collate, analyse and publish such information. 

2.  The  Organization  shall  contribute  to  efforts  to  standardize  and  harmonize  international 
reporting on forest-related matters, avoiding overlapping and duplication in data collection from 
different organizations. 

3.  Members shall, to the fullest extent possible not inconsistent with their national legislation, 
furnish, within the time specified by the Executive Director, statistics and information on timber, 

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its trade and activities aimed at achieving sustainable management of timber producing forests, as 
well as other relevant information as requested by the Council. The Council shall decide on the 
type  of  information  to  be  provided under  this  paragraph  and  on  the  format  in  which  it  is  to  be 
presented.  

4.  Upon  request  or  where  necessary,  the  Council  shall  endeavour  to  enhance  the  technical 
capacity of member countries, in particular developing member countries, to meet the statistics 
and reporting requirements under this Agreement. 

5. 
If  a  member  has  not  furnished,  for  two  consecutive  years,  the  statistics  and  information 
required  under  paragraph  3  and  has  not  sought  the  assistance  of  the  Executive  Director,  the 
Executive  Director  shall  initially  request  an  explanation  from  that  member  within  a  specified 
time.  In  the  event  that  no  satisfactory  explanation  is  forthcoming,  the  Council  shall  take  such 
action as it deems appropriate. 

6.  The Council shall arrange to have any relevant studies undertaken of the trends and of short 
and  long-term  problems  of  the  international  timber  markets  and  of  the  progress  towards  the 
achievement of sustainable management of timber producing forests. 

Article 28 

ANNUAL REPORT AND BIENNIAL REVIEW 

1.  The Council shall publish an annual report on its activities and such other information as it 
considers appropriate. 

2.  The Council shall biennially review and assess: 

(a)  The international timber situation; and 

(b)  Other  factors,  issues  and  developments  considered  relevant  to  achieving  the 

objectives of this Agreement.  

3.  The review shall be carried out in the light of: 

(a) 

Information supplied by members in relation to national production, trade, supply, 
stocks, consumption and prices of timber; 

(b)  Other statistical data and specific indicators provided by members as requested by 

the Council;  

(c) 

Information  supplied  by  members  on  their  progress  towards  the  sustainable 
management of their timber-producing forests;  

(d)  Such other relevant information as may be available to the Council either directly 
or through the organizations in the United Nations system and intergovernmental, 
governmental or non-governmental organizations; and 

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26 

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(e) 

Information supplied by  members on their progress towards the establishment of 
control and information mechanisms regarding illegal harvesting and illegal trade 
in tropical timber and non-timber forest products. 

4.  The Council shall promote the exchange of views among member countries regarding: 

(a)  The  status  of  sustainable  management  of  timber-producing  forests  and  related 

matters in member countries; and 

(b)  Resource flows and requirements in relation to objectives, criteria and guidelines 

set by the Organization. 

5.  Upon  request,  the  Council  shall  endeavour  to  enhance  the  technical  capacity  of  member 
countries,  in  particular  developing  member  countries, to  obtain  the  data necessary  for  adequate 
information-sharing, including the provision of resources for training and facilities to members. 

6.  The results of the review shall be included in the corresponding Council session reports. 

CHAPTER IX 
MISCELLANEOUS 

Article 29 

GENERAL OBLIGATIONS OF MEMBERS 

1.  Members shall, for the duration of this Agreement, use their best endeavours and cooperate 
to promote the attainment of its objectives and avoid any action contrary thereto. 

2.  Members  undertake  to  accept  and  carry  out  the  decisions  of  the  Council  under  the 
provisions of this Agreement and shall refrain from implementing measures that would have the 
effect of limiting or running counter to them. 

Article 30 

RELIEF FROM OBLIGATIONS 

1.  Where  it  is  necessary  on  account  of  exceptional  circumstances  or  emergency  or  force 
majeure  not  expressly  provided  for  in  this  Agreement,  the  Council  may,  by  special  vote  in 
accordance  with  article  12,  relieve  a  member  of  an  obligation  under  this  Agreement  if  it  is 
satisfied by an explanation from that member regarding the reasons why the obligation cannot be 
met. 

2.  The  Council,  in  granting  relief  to  a  member  under  paragraph  1  of  this  article,  shall  state 
explicitly the terms and conditions on which, and the period for which, the member is relieved of 
such obligation, and the reasons for which the relief is granted. 

EN 

27 

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Article 31 

COMPLAINTS AND DISPUTES 

Any  member  may  bring  to  the  Council  any  complaint  that  a  member  has  failed  to  fulfil  its 
obligations under this Agreement and any dispute concerning the interpretation or application of 
this  Agreement.  Decisions  by  the  Council  on  these  matters  shall  be  taken  by  consensus, 
notwithstanding any other provision of this Agreement, and be final and binding. 

Article 32 

DIFFERENTIAL AND REMEDIAL MEASURES AND SPECIAL MEASURES 

1.  Consumer members that are developing countries whose interests are adversely affected by 
measures taken under this Agreement may apply to the Council for appropriate differential and 
remedial  measures.  The Council  shall  consider  taking  appropriate  measures  in  accordance  with 
section III, paragraphs 3 and 4, of resolution 93 (IV) of the United Nations Conference on Trade 
and Development. 

2.  Members in the category of least developed countries as defined by the United Nations may 
apply  to  the  Council  for  special  measures  in  accordance  with  section  III,  paragraph  4,  of 
resolution  93  (IV)  and  with  paragraphs  56  and  57  of  the  Paris  Declaration  and  Programme  of 
Action for the Least Developed Countries for the 1990s. 

Article 33 

REVIEW 

The  Council  may  evaluate  the  implementation  of  this  Agreement,  including  the  objectives  and 
financial mechanisms, five years after its entry into force. 

Article 34 

NON-DISCRIMINATION 

Nothing in this Agreement authorizes the use of measures to restrict or ban international trade in, 
and in particular as they concern imports of, and utilization of, timber and timber products. 

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CHAPTER X 
FINAL PROVISIONS 

Article 35 

DEPOSITARY 

The  Secretary-General  of  the  United  Nations  is  hereby  designated  as  the  depositary  of  this 
Agreement. 

Article 36 

SIGNATURE, RATIFICATION, ACCEPTANCE AND APPROVAL 

1.  This  Agreement  shall  be  open  for  signature,  at United  Nations  Headquarters  from  3  April 
2006 until one month after the date of its entry into force, by Governments invited to the United 
Nations Conference for the Negotiation of a Successor Agreement to the International Tropical 
Timber Agreement, 1994. 

2.  Any Government referred to in paragraph 1 of this article may: 

(a)  At the time of signing this Agreement, declare that by such signature it expresses 

its consent to be bound by this Agreement (definitive signature); or 

(b)  After  signing  this  Agreement,  ratify,  accept  or  approve  it  by  the  deposit  of  an 

instrument to that effect with the depositary. 

3.  Upon  signature  and  ratification,  acceptance  or  approval,  or  accession,  or  provisional 
application, the European Community or any intergovernmental organization referred to in article 
5,  paragraph  1,  shall  deposit  a  declaration  issued  by  the  appropriate  authority  of  such 
organization  specifying  the  nature  and  extent  of  its  competence  over  matters  governed  by  this 
Agreement,  and  shall  inform  the  depositary  of  any  subsequent  substantial  change  in  such 
competence. Where such organization declares exclusive competence over all matters governed 
by this Agreement, the member States of such organization shall not take the actions under article 
36,  paragraph  2,  article  37  and  article  38,  or  shall  take  the action  under  article  41  or  withdraw 
notification of provisional application under article 38. 

Article 37 

ACCESSION 

1.  This Agreement shall be open for accession by Governments upon conditions established by 
the Council, which shall include a time-limit for the deposit of instruments of accession. These 
conditions  shall  be  transmitted  by  the  Council  to  the  Depositary.  The  Council  may,  however, 

EN 

29 

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grant extensions of time to Governments which are unable to accede by the time-limit set in the 
conditions of accession. 

2.  Accession shall be effected by the deposit of an instrument of accession with the depositary. 

Article 38 

NOTIFICATION OF PROVISIONAL APPLICATION 

A  signatory  Government  which  intends  to  ratify,  accept  or  approve  this  Agreement,  or  a 
Government for which the Council has established conditions for accession but which has not yet 
been able to deposit its instrument may, at any time, notify the depositary that it will apply this 
Agreement  provisionally in accordance with its  laws  and regulations, either when it enters into 
force in accordance with article 39 or, if it is already in force, at a specified date. 

Article 39 

ENTRY INTO FORCE 

1.  This  Agreement  shall  enter  into  force  definitively  on  1 February  2008  or  on  any  date 
thereafter, if 12 Governments of producers holding at least 60 per cent of the total votes as set out 
in  Annex  A  to  this  Agreement  and  10  Governments  of  consumers  as  listed  in  annex  B  and 
accounting for 60 per cent of the global import volume of tropical timber in the reference year 
2005 have signed this Agreement definitively or have ratified, accepted or approved it pursuant to 
article 36, paragraph 2, or article 37. 

2. 
If this Agreement has not entered into force definitively on 1 February 2008, it shall enter 
into  force  provisionally  on  that  date  or  on  any  date  within  six  months  thereafter  if  10 
Governments of producers holding at least 50 per cent of the total votes as set out in Annex A to 
this Agreement and seven Governments of consumers as listed in annex B and accounting for 50 
per  cent of the global import volume of tropical timber in the reference year 2005 have signed 
this  Agreement  definitively  or  have  ratified,  accepted  or  approved  it  pursuant  to  article  36, 
paragraph 2, or have notified the depositary under article 38 that they will apply this Agreement 
provisionally. 

3. 
If the requirements for entry into force under paragraph 1 or paragraph 2 of this article have 
not been met on 1 September 2008, the Secretary-General of the United Nations shall invite those 
Governments  which  have  signed  this  Agreement  definitively  or  have  ratified,  accepted  or 
approved  it  pursuant  to  article  36,  paragraph  2,  or  have  notified  the  depositary  that  they  will 
apply this Agreement provisionally, to meet at the earliest time practicable to decide whether to 
put this Agreement into force provisionally or definitively among themselves in whole or in part. 
Governments which decide to put this Agreement into force provisionally among themselves may 
meet from time to time to review the situation and decide whether this Agreement shall enter into 
force definitively among themselves. 

4.  For any Government which has not notified the depositary under article 38 that it will apply 
this  Agreement  provisionally  and  which  deposits  its  instrument  of  ratification,  acceptance, 

EN 

30 

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approval or accession after the entry into force of this Agreement, this Agreement shall enter into 
force on the date of such deposit. 

5.  The Executive Director of the Organization shall convene the Council as soon as possible 
after the entry into force of this Agreement. 

Article 40 

AMENDMENTS 

1.  The Council may, by special vote in accordance with article 12, recommend an amendment 
of this Agreement to members. 

2.  The  Council  shall  fix  a  date  by  which  members  shall  notify  the  depositary  of  their 
acceptance of the amendment. 

3.  An amendment shall enter into force 90 days after the depositary has received notifications 
of  acceptance  from  members  constituting  at  least  two  thirds  of  the  producer  members  and 
accounting  for  at  least  75  per  cent  of  the  votes  of  the  producer  members,  and  from  members 
constituting at least two thirds of the consumer members and accounting for at least 75 per cent 
of the votes of the consumer members. 

4.  After  the  depositary  informs  the  Council  that  the  requirements  for  entry  into  force  of  the 
amendment  have  been  met,  and  notwithstanding  the  provisions  of  paragraph  2  of  this  article 
relating  to  the  date  fixed  by  the  Council,  a  member  may  still  notify  the  depositary  of  its 
acceptance of the amendment, provided that such notification is made before the entry into force 
of the amendment. 

5.  Any member which has not notified its acceptance of an amendment by the date on which 
such amendment enters into force shall cease to be a party to this Agreement as from that date, 
unless such member has satisfied the Council that its acceptance could not be obtained in time 
owing to difficulties in completing its constitutional or institutional procedures and the Council 
decides  to  extend  for  that  member  the  period  for  acceptance  of  the  amendment.  Such  member 
shall not be bound by the amendment before it has notified its acceptance thereof. 

6. 
If the requirements for the entry into force of the amendment have not been met by the date 
fixed  by  the  Council  in  accordance  with  paragraph  2  of  this  article,  the  amendment  shall  be 
considered withdrawn. 

Article 41 

WITHDRAWAL 

1.  A member may withdraw from this Agreement at any time after the entry into force of the 
Agreement  by  giving  written  notice  of  withdrawal  to  the  depositary.  That  member  shall 
simultaneously inform the Council of the action it has taken. 

EN 

31 

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2.  Withdrawal shall become effective 90 days after the notice is received by the depositary. 

3.  Financial obligations to the Organization incurred by a member under this Agreement shall 
not be terminated by its withdrawal. 

Article 42 

EXCLUSION 

If the Council decides that any member is in breach of its obligations under this Agreement and 
decides further that such breach significantly impairs the operation of this Agreement, it may, by 
special  vote  in  accordance  with  article  12,  exclude  that  member  from  this  Agreement.  The 
Council  shall  immediately  so  notify  the  depositary.  Six  months  after  the  date  of  the  Council's 
decision, that member shall cease to be a party to this Agreement. 

Article 43 

SETTLEMENT OF ACCOUNTS WITH WITHDRAWING OR EXCLUDED MEMBERS 
OR MEMBERS UNABLE TO ACCEPT AN AMENDMENT 

1.  The Council shall determine any settlement of accounts with a member that ceases to be a 
party to this Agreement owing to: 

(a)  Non-acceptance of an amendment to this Agreement under article 40;  

(b)  Withdrawal from this Agreement under article 41; or  

(c)  Exclusion from this Agreement under article 42. 

2.  The  Council  shall  retain  any  assessments  or  contributions  paid  to  the  financial  accounts 
established under article 18 by a member that ceases to be a party to this Agreement. 

3.  A member that has ceased to be a party to this Agreement shall not be entitled to any share 
of the proceeds of liquidation or the other assets of the Organization. Nor shall such member be 
liable for payment of any part of the deficit, if any, of the Organization upon termination of this 
Agreement. 

Article 44 

DURATION, EXTENSION AND TERMINATION 

1.  This Agreement shall remain in force for a period of 10 years after its entry into force unless 
the  Council,  by  special  vote  in  accordance  with  article  12,  decides  to  extend,  renegotiate  or 
terminate it in accordance with the provisions of this article. 

2.  The  Council  may,  by  special  vote  in  accordance  with  article  12,  decide  to  extend  this 
Agreement for two periods, an initial period of five years and an additional one of three years. 

EN 

32 

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3. 
If, before the expiry of the 10-year period referred to in paragraph 1 of this article, or before 
the expiry of an extension period referred to in paragraph 2 of this article, as the case may be, the 
new Agreement to replace this Agreement has been negotiated but has not yet entered into force 
either definitively or provisionally, the Council may, by special vote in accordance with article 
12,  extend  this  Agreement  until  the  provisional  or  definitive  entry  into  force  of  the  new 
Agreement. 

4. 
If the new Agreement is negotiated and enters into force during any period of extension of 
this  Agreement  under  paragraph  2  or  paragraph  3  of  this  article,  this  Agreement,  as  extended, 
shall terminate upon the entry into force of the new Agreement. 

5.  The  Council  may  at  any  time,  by  special  vote  in  accordance  with  article  12,  decide  to 
terminate this Agreement with effect from such date as it may determine. 

6.  Notwithstanding the termination of this Agreement, the Council shall continue in being for a 
period  not  exceeding  18  months  to  carry  out  the  liquidation  of  the  Organization,  including  the 
settlement  of  accounts,  and,  subject  to  relevant  decisions  to  be  taken  by  special  vote  in 
accordance with  article 12,  shall  have  during  that  period  such  powers  and  functions  as  may  be 
necessary for these purposes. 

7.  The Council shall notify the depositary of any decision taken under this article. 

Article 45 

RESERVATIONS 

Reservations may not be made with respect to any of the provisions of this Agreement. 

Article 46 

SUPPLEMENTARY AND TRANSITIONAL PROVISIONS 

1.  This  Agreement  shall  be  the  successor  to  the  International  Tropical  Timber  Agreement, 
1994. 

2.  All  acts  by  or  on  behalf  of  the  Organization  or  any  of  its  organs  under  the  International 
Tropical  Timber  Agreement,  1983,  and/or  the  International  Tropical  Timber  Agreement,  1994, 
which are in effect on the date of entry into force of this Agreement and the terms of which do 
not provide for expiry on that date shall remain in effect unless changed under the provisions of 
this Agreement. 

DONE at Geneva on 27 January 2006, the texts of this Agreement in the Arabic, Chinese, English, 
French, Russian and Spanish languages being equally authentic. 

EN 

33 

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ANNEX A 

List of Governments attending the United Nations Conference for the Negotiation of a Successor Agreement 
to the International Tropical Timber Agreement, 1994 that are potential producer members as defined in 
article 2 (Definitions) and indicative allocation of votes as per article 10 (Distribution of Votes) 

Members 

Total votes 

AFRICA 

249 

Angola 

Benin 

Cameroon* 

Central African Republic* 

Cote d'Ivoire* 

Democratic Republic of the Congo* 

Gabon* 

Ghana* 

Liberia* 

Madagascar 

Nigeria* 

Republic of Congo* 

Rwanda 

Togo* 

18 

17 

18 

18 

18 

18 

18 

18 

18 

18 

18 

18 

17 

17 

EN 

34 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ASIA-PACIFIC 

389 

Cambodia* 

Fiji* 

India* 

Indonesia* 

Malaysia* 

Myanmar* 

Papua New Guinea* 

Philippines* 

Thailand* 

Vanuatu* 

LATIN AMERICA AND THE CARIBBEAN 

362 

Barbados 

Bolivia* 

Brazil* 

Colombia* 

Costa Rica 

Dominican Republic 

Ecuador* 

Guatemala* 

Guyana* 

Haiti 

Honduras* 

Mexico* 

Nicaragua 

Panama* 

15 

14 

22 

131 

105 

33 

25 

14 

16 

14 

7 

19 

157 

19 

7 

7 

11 

8 

12 

7 

8 

15 

8 

8 

EN 

35 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Paraguay 

Peru* 

Suriname* 

Trinidad & Tobago* 

Venezuela* 

TOTAL: 

* Member of the International Tropical Timber Agreement, 1994 

10 

24 

10 

7 

18 

1000 

EN 

36 

   EN 

 
 
 
 
 
 
ANNEX B 

List of Governments attending the United Nations Conference for the Negotiation of a 
Successor Agreement to the International Tropical Timber Agreement, 1994 that are 
potential consumer members as defined in article 2 (Definitions) 

Albania 
Algeria 
Australia* 
Canada* 
China* 
Egypt* 
European Community* 

Austria* 
Belgium* 
Czech Republic 
Estonia 
Finland* 
France* 
Germany* 
Greece* 
Ireland* 
Italy* 
Lithuania 
Luxembourg* 
Netherlands* 
Poland 
Portugal* 
Slovakia 
Spain* 
Sweden* 
United  Kingdom  of  Great  Britain  and 

Northern Ireland* 
Iran (Islamic Republic of) 
Iraq 
Japan* 
Lesotho 
Libyan Arab Jamahiriya 
Morocco 
Nepal* 
New Zealand* 
Norway* 
Republic of Korea* 
Switzerland* 
United States of America* 

* Member of the International Tropical Timber Agreement, 1994 

EN 

37 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LEGISLATIVE FINANCIAL STATEMENT 

This document is intended to accompany and complement the Explanatory Memorandum. As 
such,  when  completing  this  Legislative  Financial  Statement,  and  without  prejudice  to  its 
legibility,  an  attempt  should  be  made  to  avoid  repeating  information  contained  in  the 
Explanatory  Memorandum.  Before  filling  in  this  template,  please  refer  to  the  specific 
Guidelines that have been drafted to provide guidance and clarification for the items below.  

1. 

2. 

NAME  OF  THE  PROPOSAL  :  Proposal  for  a  Council  Decision  regarding  the 
signature and conclusion of the International Tropical Timber Agreement 2006.  

ABM / ABB FRAMEWORK 

Policy Area(s) concerned and associated Activity/Activities: 

External  Relations, Development and  relations with ACP  countries. Obligations  vis à  vis of 
the International Commodities organisations 

3. 

BUDGET LINES 

3.1. 

Budget  lines  (operational  lines  and  related  technical  and  administrative  assistance 
lines (ex- B..A lines)) including headings : 

21 07 04 Commodities agreement 

3.2. 

Duration of the action and of the financial impact: 

Ten years unless the Agreement is renegotiated or extended. 

3.3. 

Budgetary characteristics (add rows if necessary) : 

Budget 
line 

Type of expenditure 

New 

EFTA 
contribution 

Contributions 
from applicant 
countries 

Heading in 
financial 
perspective 

Comp 

Diff2/ 

 YES 

NO 

NO 

No [ 4 ] 

4. 

SUMMARY OF RESOURCES 

4.1. 

Financial Resources 

4.1.1.  Summary of commitment appropriations (CA) and payment appropriations (PA) 

2 

Differentiated appropriations 

EN 

38 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Section 
no. 

Expenditure type 

n + 1 

n + 2 

n + 3 

n + 4 

Year 
n 

n + 5 
and 
later 

Total 

EUR million (to 3 decimal places) 

Operational expenditure3 

Year  (n)  represents  the  year  when 
the  obligation  is  supposed  to  start. 
One  can  predict  that  it  could  be  in 
2008. 

Commitment 
Appropriations (CA) 

8.1 

Payment  Appropriations 
(PA) 

a 

b 

1,532  1,609 

1,689 

1,773 

1,862 

1,532  1,609 

1,689 

1,773 

1,862 

13,29
7 

13,29
7 

21,762* 

21,762* 

*  Given  the  changes  in  trade  from  year  to  year  (notably  by 
China)  this  can  result  in  changes  to  the  votes  of  those 
countries that receive more than the 10 basic votes (Art. 10 § 
4) in ways that are impossible to predict now. The calculation 
of  the  EC  proportion  is  based  on  the  provisions  of  the  ITTA 
2006 (Art. 19). The budget for 2008 will be decided in 2007 so 
these  figures  are  just  an  estimation  based  on  the  current 
budget. The calculation takes into account an annual average 
of increase equal to 5%. 
Administrative expenditure within reference amount4 

& 
Technical 
administrative  assistance 
(NDA) * 

8.2.4 

c 

**  NNoo  nneeeedd  ffoorr  tteecchhnniiccaall  aanndd  aaddmmiinniissttrraattiivvee  
aassssiissttaannccee  

TTOOTTAALL  RREEFFEERREENNCCEE  AAMMOOUUNNTT  

Commitment 
Appropriations 

Payment 
Appropriations 

1,532  1,609 

1,689 

1,773 

1,862 

1,532  1,609 

1,689 

1,773 

1,862 

a+c 

b+c 

13,29
7 

13,29
7 

21,762*

21,762*

Administrative expenditure not included in reference amount5 

**  NNoo  nneeeedd  ffoorr  tteecchhnniiccaall  aanndd  aaddmmiinniissttrraattiivvee  aassssiissttaannccee 

Human 
associated 
(NDA) 

resources 

and 
expenditure 

8.2.5 

d 

3 
4 
5 

Expenditure that does not fall under Chapter xx 01 of the Title xx concerned. 
Expenditure within article xx 01 04 of Title xx. 
Expenditure within chapter xx 01 other than articles xx 01 04 or xx 01 05. 

EN 

39 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Administrative  costs,  other 
than  human  resources  and 
associated 
not 
included in reference amount 
(NDA) 

costs, 

8.2.6 

e 

Total indicative financial cost of intervention  

TOTAL  CA 
including  cost 
Human 
of 
Resources 

TOTAL  PA 
including  cost 
Human 
of 
Resources 

a+c+d+e 

b+c+d+
e 

1,532  1,609  1,689  1,773  1,862  13,29

21,726** 

7 

1,532  1,609  1,689  1,773  1,862  13,29

21,762** 

7 

** See note (*) on page 2 for item 4.1.1 

Co-financing details 

On the basis of a conclusion by the sole Community, there will be not a financial involvement 
or co-financing by Member States, or other bodies. Otherwise, the level of this contribution 
will be determined by the Council. 

EUR million (to 3 decimal places) 

n + 1 

n + 2 

n + 3 

n + 4 

Year 
n 

n  +  5 
and 
later 

Total 

Co-financing body 

…………………… 

TOTAL CA including co-
financing 

f 

a+c
+d+
e+f 

4.1.2.  Compatibility with Financial Programming 

X 

Proposal is compatible with existing financial programming. 

(cid:133) 

(cid:133) 

Proposal  will  entail  reprogramming  of  the  relevant  heading  in  the  financial 
perspective. 

Proposal  may  require  application  of  the  provisions  of  the  Interinstitutional 
Agreement6 (i.e. flexibility instrument or revision of the financial perspective) 

4.1.3.  Financial impact on Revenue 

X 

Proposal has no financial implications on revenue 

6 

See points 19 and 24 of the Interinstitutional agreement. 

EN 

40 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
(cid:133) 

Proposal has financial impact – the effect on revenue is as follows: 

NB: All details and observations relating to the method of calculating the effect on 
revenue should be shown in a separate annex. 

Budget line 

Revenue 

EUR million (to one decimal place) 

Situation following action 

[Yea
r n] 

[n+1] [n+2] [n+3

] 

[n+4]  [n+5]

7

Prior to
action 
[Year 
n-1] 

a) Revenue in absolute terms 

b) Change in revenue 

 Δ 

(Please specify each revenue budget line involved, adding the appropriate number 
of rows to the table if there is an effect on more than one budget line.) 

4.2. 

Human Resources FTE (including officials, temporary and external staff) – see detail 
under point 8.2.1. 

The  needs  for  human  and  administrative  resources  shall  be  covered  within  the 
allocation  granted  to  the  managing  DG  in  the  framework  of  the  annual  allocation 
procedure. 

Annual requirements 

Year n 

n + 1 

n + 2 

n + 3 

n + 4 

n + 5 
and 
later 

Total 
number 
human resources 

of 

2 

2 

2 

2 

2 

2 

5. 

CHARACTERISTICS AND OBJECTIVES 

Details  of  the  context  of  the  proposal  are  required  in  the  Explanatory  Memorandum. 
This section of the Legislative Financial Statement should include the following specific 
complementary information: 

5.1. 

Need to be met in the short or long term.  

This membership was recommended by the conclusions of the impact assessment of 
the ITTO carried on in view of the renegotiation, for continuing the presence of the 
EU in this important international forum. The Community' membership will be also 
necessary to strengthen the status of the EC in order to let the Commission to play a 
key  role  within  the  Organisation.  In  addition,  the  responsibility  to  fulfil  the 

7 

Additional columns should be added if necessary i.e. if the duration of the action exceeds 6 years 

EN 

41 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
mandatory  financial  obligations  will  entail  a  major  control  of  the  general 
management. 

5.2. 

Value-added  of  Community  involvement  and  coherence  of  the  proposal  with  other 
financial instruments and possible synergy. 

The present membership derives from the broader approach always followed by the 
Community  in  signing  and  concluding  international  commodity  agreements  once 
negotiated.  This  facilitates  also  the  achievement  of  the  major  goal  of  development. 
As it derives from an accurate analysis of the objectives of this new agreement, the 
major aims seem to be focused on trade but also on environment. The Community' 
participation  will  be  then  essential  for  playing  together  with  major  international 
actors, a coordinated and coherent policy on forestry, trade and development. 

The  proposal  is  coherent  with  other  financial  instruments  ensuring  the  EC 
participation  to  international  organisations.  No  synergies  possible  at  the  present 
stage. 

5.3. 

Objectives, expected results and  related indicators of  the proposal in the context of 
the ABM framework 

Within the ABM framework, the present proposal has the objective to respond to the 
objective  of  developing  the  Commission’s  role  as  an  intellectual  focal  point  for 
development and ensures effective participation in the international policy debate.  

The  main  output  indicator  could  be  considered  the  EU  positions  for  major 
international  initiatives,  conventions,  fora  and  platforms.  The  impact  indicator  may 
be  considered  the  reflection  of  the  EU  positions  in  international  partnership  and 
funds as well as international multilateral fora, as ITTO.  

The proposal will allow the Commission, acting on behalf of the Community.  

Method of Implementation (indicative) 

Show below the method(s)8 chosen for the implementation of the action. 

ٱ Centralised Management 
X 

Directly by the Commission 

ٱ 

Indirectly by delegation to: 

ٱ 
ٱ 

Executive Agencies 
Bodies set up by the Communities as referred to 
in art. 185 of the Financial Regulation 
National  public-sector  bodies/bodies  with 

ٱ 
public-service mission 

ٱ 

ٱ 

Shared or decentralised management 

ٱ 
ٱ 

With Member states 
With Third countries 

Joint  management  with  international  organisations  (please 

8 

If  more  than  one  method  is  indicated  please  provide  additional  details  in  the  "Relevant  comments" 
section of this point 

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specify) 

Relevant comments: 

6. 

MONITORING AND EVALUATION 

6.1. 

Monitoring system 

The  Commission  Services  attend  regularly  the  Council  sessions  as  well  as  the 
Administrative/financial Committee of the International Timber Organisation. These 
two bodies are mandated to propose and approve the administrative budget and the 
inherent contributions. The administrative budget, its utilisation, the financial status 
of the expenditures and accounts of the International Tropical Timber Organisation 
are at the disposal of the members. 

6.2. 

Evaluation 

6.2.1.  Ex-ante evaluation 

Evaluation  of  the  compatibility  of  the  annual  proposal  with  our  financial  policy  is 
carried  out  for  all  commodity  agreements  where  the  European  Community  is 
contracting party. 

6.2.2.  Measures  taken  following  an  intermediate/ex-post  evaluation  (lessons  learned  from 

similar experiences in the past) 

This exercise is carried out, if necessary, at the moment of a future renegotiation at 
the end of the validity of the ITTA 2006. At the moment, the proposal for conclusion 
is in conformity with the recommendations contained in the evaluation carried out by 
an external consultancy before starting the negotiating Conference within UNCTAD 
(United  Nations  Conference  on  Trade  and  Development).  This  international 
multilateral forum, by virtue of its mandate, represents the natural "umbrella" under 
which the major international commodity organisations act.  

6.2.3.  Terms and frequency of future evaluation 

There  is  not  an  evaluation  scheduled;  however  a  mid  term  review  of  the 
implementation  and  achievements  of  the  agreement  will  be  probably  carried  out 
within the Organisation itself. 

7. 

ANTI-FRAUD MEASURES  

The Commission will ensure the constant monitoring of the administrative management of the 
financial resources of the International Tropical Timber Organisation. 

If so required, the International Tropical Timber Organisation is willing to grant the access to 
its records and books to OLAF as well as to all other financial and audit services when and if 
requested by the Commission. 

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8. 

DETAILS OF RESOURCES 

8.1. 

Objectives of the proposal in terms of their financial cost 

(Headings  of  Objectives, 
actions and outputs should 
be provided) 

Type of output 

Av. 
cost 

Year n 

Year n+1 

Year n+2 

Year n+3 

Year n+4 

Year n+5 and 
later 

TOTAL 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

Commitment appropriations in EUR million (to 3 decimal places) 

OPERATIONAL 
OBJECTIVE No.1 9……… 

Contributions 
International 
Commodities 
Organisations 

to 

the 

1 

1,532 

 1 

1,609 

 1 

1,689 

 1 

1,773 

 1 

1,862 

5 

13,297 

10 

21,762 

TOTAL COST 

1 

1 

1,532 

 1 

1,609 

 1 

1,689 

 1 

1,773 

 1 

1,862 

5 

13,297 

10 

21,762 

9 

As described under Section 5.3 

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8.2. 

Administrative Expenditure 

8.2.1.  Number and type of human resources 

The  needs  for  human  and  administrative  resources  shall  be  covered  within  the 
allocation  granted  to  the  managing  DG  in  the  framework  of  the  annual  allocation 
procedure.  The  staff  and  the  administrative  expenditure  are  included  in  the  normal 
allocation of the DG 

Types of 
post 

Staff to be assigned to management of the action using existing and/or additional 
resources (number of posts/FTEs) 

Year n 

Year n+1 

Year n+2 

Year n+3 

Year n+4 

Year n+5 

A*/AD 

B*, 
C*/AST 

Officials 
or 
temporary 
staff10 
(XX 01 
01) 

Staff  financed11  by 
art. XX 01 02 

staff12 
Other 
financed  by  art.  XX 
01 04/05 

TOTAL * 

8.2.2.  Description of tasks deriving from the action 

Attendance to meetings, study of documents, discussion with Member States and finally 
negotiations within the International Tropical Timber Organisation.  

8.2.3.  Sources of human resources (statutory) 

(When more than one source is stated, please indicate the number of posts originating from each 
of the sources) 

Posts currently allocated to the management of the programme to be replaced or 

(cid:133) 
extended 

(cid:133) 

Posts pre-allocated within the APS/PDB exercise for year n 

10 
11 
12 

Cost of which is NOT covered by the reference amount 
Cost of which is NOT covered by the reference amount 
Cost of which is included within the reference amount 

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45 

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(cid:133) 

Posts to be requested in the next APS/PDB procedure 

Posts  to  be  redeployed  using  existing  resources  within  the  managing  service 

(cid:133) 
(internal redeployment) 

Posts  required  for  year  n  although  not  foreseen  in  the  APS/PDB  exercise  of  the 

(cid:133) 
year in question. 

8.2.4.  Other  Administrative  expenditure  included  in  reference  amount  (XX  01  04/05  – 

Expenditure on administrative management) 

EUR million (to 3 decimal places) 

Budget line 

(number and heading) 

Year 
n 

Year 
n+1 

Year 
n+2 

Year 
n+3 

Year 
n+4 

Year 
n+5  

and 
later 

TOTAL 

Technical 

and 
1 
assistance (including related staff costs) 

administrative 

Executive agencies13 

Other 

technical 

and 

administrative 

assistance 

- intra muros  

- extra muros 

Total  Technical  and  administrative 
assistance 

8.2.5.  Financial  cost  of  human  resources  and  associated  costs  not  included  in  the  reference 

amount. 

The needs for human and administrative resources shall be covered within the allocation granted 
to  the  managing  DG  in  the  framework  of  the  annual  allocation  procedure.  The  staff  and  the 
administrative expenditure are included in the normal allocation of the DG. 

Type of human resources 

Year n 

Year n+1  Year n+2  Year n+3  Year n+4  Year n+5 

EUR million (to 3 decimal places) 

13 

Reference  should  be  made  to  the  specific  legislative  financial  statement  for  the  Executive  Agency(ies) 
concerned. 

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46 

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and later 

Officials and temporary staff (XX 01 01) 

financed  by  Art  XX  01  02 

Staff 
(auxiliary, END, contract staff, etc.) 

(specify budget line) 

Total cost of Human Resources and 
associated costs (NOT in reference 
amount) 

Calculation– Staff financed under art. XX 01 02 

Reference should be made to Point 8.2.1, if applicable 

8.2.6.  Other administrative expenditure not included in reference amount 

EUR million (to 3 decimal places) 

Year 
n+1 

Year 
n+2 

Year 
n+3 

Year 
n+4 

Year 
n 

Year 
n+5 

and 
later 

TOTAL 

XX 01 02 11 01 – Missions 

XX 01 02 11 02 – Meetings & Conferences 

XX 01 02 11 03 – Committees14  

XX 01 02 11 04 – Studies & consultations 

XX 01 02 11 05 - Information systems 

2 Total Other Management Expenditure 

(XX 01 02 11) 

3 

Other 

expenditure 

administrative 
including reference to budget line) 

nature 

of 

an 
(specify 

14 

Specify the type of committee and the group to which it belongs. 

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Total Administrative expenditure, other 
than human resources and associated 
costs (NOT included in reference 
amount) 

Calculation - Other administrative expenditure not included in reference amount 

EN 

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