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WT/BFA/ 203 
 
17 June 2022 
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Committee on Budget, Finance and Administration    
 
REPORT OF THE MEETING HELD ON 5 MAY 2022 
The Committee on Budget, Finance and Administration (CBFA) met on 5 May 2022. Her Excellency 
Ambassador Bettina Waldmann, German Ambassador to the WTO , welcomed Members to the 
meeting.  
1  ADOPTION OF THE AGENDA  
1.1.  The Chair noted that the agenda for the meeting had been released on 22 April, with the 
reference WTO/AIR/BFA/ 51, together with the annotated agenda bearing the reference JOB/BFA/ 60. 
1.2.  The agenda , as set out in document WTO/AIR/BFA/ 51, was adopted . 
2  ORAL REPORT FROM THE CHAIR ON ONGOING WORK  
2.1.  The Chair informed the Committee that, since the previous Committee meeting, she had 
informally met with several  delegations to gather information regarding their priorities with respect 
to future work and planning.  
2.2.  In those consultations, Members raised issues relate d to the CBFA's Work Plan for 2022, 
including the Secretariat transformation exercise, the question of long -term liabilities  and revisions 
to the F inancial Regulations. Questions were also raised regarding the consequences of the zero -
nominal growth budget and technical assistance activities.  
2.3.  The Chair underlined that there was considerable interest in particular in relation to the 
transformation proc ess, as it progresses and moves forward towards the second phase of 
implementation.  
2.4.  The Chair  recall ed that the Director -General ha d previously indicated that she would be 
assessing the needs of the Organization and may be consulting with Members at the mi d-term review 
of the budget  in September.  
2.5.  The Chair concluded her update by informing that she will continue this exercise to be able to 
better structure the work and make proposals on the way forward .  
3  SUMMARY REPORT BY CHAIR OF THE WORKING GROUP CONCERNING COHERENCE IN 
THE MANAGEMENT AND ADMINISTRATION OF VOLUNTARY CONTRIBUTIONS – 
WT/BFA/W/ 584 
3.1.  The Chair of the W orking Group thanked Members  of the Working Group  for their constructive 
engagement and spirit of cooperation  that culminated in the paper that was submitted for 
consideration by the Committee. She stated that t he objective of the recommendations is to improve 
the management, governance , and administrati on of voluntary contributions  by establishing 
principles to allow the Secretariat to ensure greater consistency in existing processes and to develop 
new guidelines and policies where necessary to address gaps in existing rules.  
3.2.  She noted that the recommend ations specif y a six-month target for the Secretariat to submit 
a proposal  to the CBFA , although she further noted that the date can be adjusted given MC12 and 
the upcoming summer break . WT/BFA/ 203 
 
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  3.3.  Speaking on behalf of the African Group, a Member expressed the view that it is beneficiaries 
who should define the needs and approach to how Trust Funds operate. He said the African Group 
would not anything to limit the scope or level of voluntary contributions to help developing Members.  
3.4.  Several delegations express ed appreciation to the Chair of the W orking Group and the process 
that led to th e constructive outcome.  
3.5.  A Member echoed the views expressed in paragraph 3.4. above and commended the Chair of 
the Working Group, as well as the Secretariat Official who facilitated t he Working Group's work, for 
having conducted meetings in an open and transparent way. He noted that Trust Fund Management 
has been an issue of great importance for his delegation as it has implications for all Members. The 
Member said that the process tha t was followed by the Working Group represents the best of how 
the WTO can operate when Members come together and have open exchanges. He said the outcome 
was an artful way that reflects the divergences that exist among Members whilst moving the WTO 
forwar d, acknowledging trends in the world and making sure that Trust Funds are created or 
managed in good manner.  
3.6.  The Member gave accolades to the Chair of the Working Group stating that this is not the first 
outcome that she has brokered to consensus. He cited  her stewardship of the Working Group for the 
Working Capital Fund and her ongoing and deep contribution to the CBFA.  
3.7.  Speaking on behalf of the LDC Group, a Member expressed the view that LDCs are particularly 
vulnerable because of the ongoing pandemic and  that it would be important to make sure that Trust 
Fund opportunities are improved and expanded to avoid leaving LDCs on the margins of the work of 
the WTO.  
3.8.  In response to a question posed by a Member, the Chair of the Working Group confirmed that  
the rec ommendations allow for the Secretariat to build on the policies and guidelines that are already  
in place and  working well and d o not imply starting from scratch to develop completely new rules.  
3.9.  The Working Group  made the following recommendations  to the CB FA: 
3.10.  The CBFA endorses the principles identified by the Working Group and directs the 
WTO Secretariat to immediately commence the process to develop the necessary policies 
and guidelines to ensure that the governance and management of WTO Trust Funds and 
Voluntary Contributions are brought in consistency with the principles recommended by 
the Working Group in a time bound manner.  
3.11.  In this regard, the Secretariat may also consider upholding, expanding and/or 
consolidating the existing policies, guidelines and practices, as deemed necessary in 
undertaking the above exercise.  
3.12.  The Secretariat should submit a proposal containing the necessary policies and 
guidelines to the CBFA within six months , with some flexibility in that timing,  and 
complete the process as per the guidance of the CBFA, including regular reports on the 
progress of work to the CBFA at its formal meetings, till this process is completed.  
3.13.  Until new policies and guidelines are adopted, existing rules and regulations w ill 
continue to apply.  
3.14.  The CBFA endorsed the recommendations contained in paragraphs 3.8 to 3.11 above.  
4  OFFICE OF INTERNAL OVERSIGHT – STATUS OF INTERNAL RECOMMENDATIONS  – 
WT/BFA/W/ 586 
4.1.  The ad interim  Head of the Office of Internal Oversight (OIO)  provided  an update on the status 
of recommendations made in internal audit reports  that were still outstanding as of the end of 2021. 
She stated  that as of 31 March 202 2, 90% of the internal audit recommendations had been 
implemented, remedial action was being take n for 8%, and only 2% remained open.  She noted that 
since the OIO's report to the CBFA in 2021, two recommendations , both in IT Security , were  closed.  WT/BFA/ 203 
 
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  4.2.  A Member noted the importance placed by his delegation on the oversight function and 
expressed his delegation's continued interest in knowing the status of internal audit 
recommendations. The Member  said it would be useful for future OIO reports to provide more details 
on recommendations that remain open and tho se for which remedial action has commenced, 
including the prioritization of recommendations and any obstacles faced. The ad interim  Head of the 
OIO commented that she had taken note of the suggestions.  
4.3.  The Member expressed concern that his delegation did n ot have a clear understanding of the 
transformation process. He asked whether the transformation exercise was also taking account of 
the status of the implementation of the internal and external audit recommendations. The ad interim  
Head of the OIO respond ed that she had had an initial meeting with the Transformation Office and 
would request a follow -up meeting to encourage its team to consider the audit recommendations.  
4.4.  A Member requested more information about the implementation of the recommendation 
related to Home Leave Entitlements  and whether there is any indication of when the Joint Advisory  
Committee (JAC) will complete reviewing the policy and mak e appropriate recommendations to the 
Director -General.  
4.5.  A Member noted that her delegation does not have sufficient understanding of the audit 
guidelines followed or the approach taken by the internal and external auditors in conducting the 
audits or assessing the implementation status of the ensuing recommendations. She suggested 
sessions be organized to pro vide such information to any interested Members. The ad interim Head 
of the OIO noted the suggestion.  
4.6.  An Official of the Secretariat said  the concerned Divisions will provide more information on the 
status of the internal audit recommendations in time for the next quarterly update . She also 
observed that the three concerned  internal audit reports had made a total of 63 recommendations, 
56 of which were closed and 6  outstanding . 
4.7.  The Committee took note of the update provided by the ad interim Head of the Office of Internal 
Oversight . 
5  STRATEGIC FACILITIES PLAN  – WT/BFA/W/58 7 
5.1.  An Official of the Secretariat presented the Strategic Facilities Plan and said that the aim of the 
document  is to serve as a guide to plan short and medium -term capital project s and ensure efficient 
utilization  of the WTO facilities.  
5.2.  He showed a layout of the buildings o n the WTO premises , indicating that some are owned by 
the WTO whilst others are owned by the Foundation for Buildings for International Organizations  
(FIPOI ) and the Canton of Geneva.  
5.3.  The Official of the Secretariat briefe d the Committee on the notable capital projects undertaken 
in 2021  and covered the planned capital work s for the short - and medium -term and the sources of 
funding, that is, the regular budget, the Building Renovation Fund , and the FIPOI.  
5.4.  A Member complimented the Secretariat for the steps taken regarding  environmental matters  
and asked whether the Secretari at calculates its carbon footprint, and if there were any objectives 
to make the WTO completely carbon neutral.  The Official of the Secretariat  stated that the 
Secretariat does make calculat ions on emissions.  The Member asked for the internal Secretariat 
report on the carbon footprint, and the Chair said that she did not think it would be a problem to 
share the report.  
5.5.  A Member thanked the Secretariat for the efforts in making the WTO buildings safe and 
comfortable and asked  if, following the pandemic and t he new teleworking arrangements, the 
Secretariat is envisag ing creating flexible workspaces to meet current work trends . The Official of 
the Secretariat said that this was under discussion.  
5.6.  A Member thanked the Secretariat for its efforts in enhancing the audio -visual installations and 
increasing the video -conferencing capabilities in meeting rooms. H owever, h e added that is 
becoming more and more difficult to secure a communal meeting room for face -to-face meeting s WT/BFA/ 203 
 
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  between Members, as these r ooms are now constantly booked for virtual meetings  and cluttered 
with hardware and peripherals that make them less suitable for in -person meetings . 
5.7.  An Official of the Secretariat  responded that the installation of audio -visual equipment in 
additional meeting rooms was brought about by  reduced presence on site due to the pandemic and 
was necessary to enable more space for  virtual meetings. She said the Secretariat has taken the 
comments on board and will discuss them further  internally and with the Member . 
5.8.  The Committee took note of the Strategic Facilities Plan.  
6  WTO LONG TERM LIABILITIES  – WT/BFA/W/5 85 
6.1.  A Member of the Secretariat presented an overview of the basic concepts and context for 
understanding long term liabilities at the WTO. He reviewed the two p rincipal sources of long -term 
liabilities in the WTO: the Pension Plan and the After Service Health Insurance  (ASHI) . He discussed 
two approaches to estimating and reporting on those liabilities, and three approaches to financing 
them. 
6.2.  Next, he explained w hy much of the Committee's attention has been directed toward ASHI , 
noting that the situation of the Pension Plan is governed and monitored by a Management Board 
whereas no similar governance and oversight exist s for ASHI .  
6.3.  The Official of the Secretariat provided highlights of  the CBFA's work on ASHI from 2014 to 
2018 and the eventual decision to create an ASHI reserve account  to be funded through annual  
budgetary savings from the medical plan . He said that there  was a lack of consensus during that 
period to find a structural/systematic approach to funding ASHI.  
6.4.  Finally , he reviewed the liability situation as of 2021 and the readiness of the Secretariat to 
support Members ' interest in again working on long term liabilities in 2022.  
6.5.  Speaki ng on behalf of the European Union and its 27 Member States, a Member read the 
following statement: "T he European Union condemns, in the strongest possible terms, the military 
aggression in Ukraine by the Russian Federation which is inflicting terrible suf fering on the civilian  
population of Ukraine, destroying infrastructure and weaken ing its public finances and economy, as 
well as its ability to participate in global trade. It is also endangering stability and security on an 
international perspective and is having harmful effect on the global economy and food security. 
Russia should therefore immediately cease its aggression. The European Union and its Member 
States will continue tirelessly to support Ukraine and its people. " 
6.6.  Other Member s reaffirm ed that their delegation s also condemn Russia's aggression against 
Ukraine in the strongest possible terms , adding that t his is a f lagrant violation of international law.  
6.7.  Several Members expressed the view that the issue of long -term liabilities is important for 
them and should not be deferred to address in the future when the situation reaches a crisis point. 
They said  now is the time to responsibly take steps to prepare for the future. Some suggested that 
a better understanding of what other international organiz ations, especially in Geneva, are doing 
could be helpful.  
6.8.  One Member asked to what extent the long -term liabilities are simply a by -product of the 
adopti on of IPSAS by the WTO and if the resources in the Working Capital Fund  (WCF)  can be used 
to help alleviate some of the problems should extra resources be needed.  
6.9.  Several Members reiterated that the problem is real and not just an accounting construct.  
6.10.  A Member cautioned against comparing the WTO to other organizations , recall ing that such a 
comparison had already been done and that it was now up to the WTO Members to decide to start 
systematically funding  long term liabilities  so as to avoid unpleasant surprises in the future.  
6.11.  The Chair suggested that some of  the earlier  documentation on options could be recirculated 
to the Committee.  WT/BFA/ 203 
 
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  6.12.  An Official of the Secretariat observed that the WTO is not alone in facing substantial liabilities 
and that there are no easy solutions to be found. He noted that several other internationa l 
organizations ha ve taken steps to begin systematically funding ASHI , often as a percentage of the 
total payroll amount . These approaches ten d to be very gradual , focusing on newly accruing liabilities 
rather than catching up on past liabilities. In that way over a period of 30 -40 years , the gap between 
the liabilities and required assets would be mitigated.   
6.13.  Another Official of the Secretariat commented on WCF , noting that while it is correct to 
consider that it could be used for long term liabilities, its amount is  nonetheless significantly lower 
than the overall liabilities. She cited that the balance in the Special Reserve Account funded from 
surpluses in the medical insurance budget and the W CF is approximate ly CHF 80 million as at 
31 December 2021 , whereas the total deficit in long -term liabilities is approximately CHF1 billion, of 
which CHF 300 million is the unfunded ASH liabilities.  She further noted that the WCF is to be used 
only in extraordinary circumstances to which the Members agree. She said the Secretariat supports 
efforts to create a dedicated structural approach to funding long-term liabilities.  
6.14.  The Committee took note of th e report and presentation and will return to the issue at a future 
meeting.  Furthermore, the chair underlined that the Secretariat keep the Committee informed at 
such meetings.  
7  UPDATE ON THE SECRETARIAT TRANSFORMATION EXERCISE  
7.1.  The Chair recalled that the S ecretariat had given updates to Members regarding the Secretariat 
Transformation Exercise in previous Committee meetings, including most recently at the meeting of 
the CBFA held on 17 March and on 4 May at the end of the meeting of the Trade Negotiations 
Committee.  
7.2.  DDG Ellard informed the Committee that her speaking notes would be circulated to Members 
after the meeting, in order to assist them in their work.  She covered the following aspects in her 
update:  
7.3.  She recalled that t he Transformation Office had be en established  in February to coordinate and 
drive forward the ongoing process of strengthening the Secretariat. She added that s taffing of the 
Transformation Office is now complete, with a Communications and Implementation Specialist, along 
with an Assist ant, all of whom were recruited from within the WTO Secretariat.  
7.4.  She stated that in early February , the Director -General had shared a summary of the timelines, 
the modalities , and the areas on which that the Secretariat is focusing and had provided an addi tional 
update to Members during her opening remarks at the informal TNC/HODs meeting.  
7.5.  DDG Ellard said that th e end of the first two waves of design work, deal ing with specific topics 
related to staff talent management and ways of working within the Secretariat , were coming to a 
close. With regard to the methodology, she said that for each topic , there is a core design  group 
composed of staff members who work closely with the Transformation Office and the external 
consultants. Members of each core design group gather information to supplement the facts that 
were collected during the diagnostic phase and rely on their own experience and expertise to ensure 
that they have a full understanding of the current state and challenges in the relevant area  as we ll 
as external best practices. Each core design group generates a range of possible design solutions 
and recommendations and then narrows these down to a set of concrete proposals.  
7.6.  Alongside each core design group  is an ad hoc group of staff stakeholders w ho have volunteered 
to give feedback on the proposals and help ensure that the solutions are fit for purpose. The 
proposals are then tested with the Transformation Advisory Committee  – comprised of all Directors  
– and then further refined before being pres ented to the Steering Committee , which is Chaired by 
the Director -General and includes the four Deputy Directors -General and the Chief of Staff.  
7.7.  DDG Ellard said that d esign proposals approved by the Steering Committee can then proceed 
to the implementation  phase. She emphasized that i mplementation will be driven by the 
Transformation Office and will respect existing processes and requirements that apply when changes 
are made to Secretariat rules and policies. For example, new policies and any changes to exi sting 
policies will go through the Joint Advisory Committee, which will make recommendations to the WT/BFA/ 203 
 
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  Director -General for her final approval. Furthermore, Members  will be engaged  with respect to any 
proposals with budgetary implications.  
7.8.  DDG Ellard further said the three initiatives from the first wave  – rewards outside promotion , 
risk management , and procurement – have gone through the full cycle of testing and refinement, 
including a review by the Steering Committee.  
7.9.  On staff rewards outside of promotion , DDG Ellard noted that there are three planned changes . 
The first is to launch a set of new or redesigned non -monetary awards that staff can receive, to 
recognize teamwork, innovation, and excellence in management . Second, the system for awarding 
annual per formance bonuses is to be relaunched to make it fairer and more transparent, ensuring 
clearer links between rewards and real performance. This redesign will not involve increasing the 
budget amount allocated for staff bonuses. In addition, the annual perfo rmance -related bonus will 
be split into two categories. Specifically, a smaller group of outstanding performers will receive a 
somewhat higher bonus as compared to a second group, identified as very strong performers.  Third, 
a stronger culture of ongoing "recognition and praise" within the Secretariat  is to be built , including 
through training and highlighting good practices and role models. All supervisors and managers  will 
be enlisted  to help motivate Secretariat staff, show them that they are va lued, and produce greater 
value for Members.  
7.10.  DDG Ellard noted that risk management  is an increasingly important function in today's world. 
Good risk management helps foresee and mitigate a range of potential negative developments that 
could put the Secreta riat and its Members at risk. The key proposals that have been approved by 
the Steering Committee are the development and implementation of a comprehensive and tailored 
Secretariat -wide risk taxonomy and an overarching risk management process with clearly defined 
responsibilities. These steps will strengthen risk awareness and the recognition, reporting , and 
managing of risk across the Secretariat. Finally, the currently vacant R isk Officer position will be 
filled. 
7.11.  On the subject of  procurement , DDG Ellard said that several proposals have been submitted 
to the Steering Committee to improve and make the  already good procurement processes more 
effective. The Steering Committee is considering whether to modify monetary thresholds , taking 
account of inflation an d of best practices among peer international organizations. She emphasized 
that a ny proposal for change s to the threshold for review by the Contracts Committee , which is 
currently set at CHF 50,000 , must be considered and approved by the CBFA as part of th e review of 
the Financial R ules. The Steering Committee is also considering proposals for increased use of digital 
tools to boost the efficiency and transparency of procurement processes.  
7.12.  DDG Ellard then informed the Committee that the four second wave ini tiatives  currently in 
progress  cover staff career pathways, mobility, recruitment , and promotions. She said c ore design 
groups have been actively discussing current policies and practices a s well as certain gaps and areas 
for improvement that have been ide ntified. These core design  groups have generated several 
proposals , and staff stakeholder groups and the Transformation Advisory Committee have been 
engaged to provide their input . The Steering Committee will soon receive the refined proposals for 
consider ation. Given the close links between these subjects, these four streams are being run 
simultaneously to ensure consistency and coherence among the proposals. The aim of these 
initiatives is  to provide the staff of the Secretariat with opportunities to prog ress and plan their 
careers, allow them to develop varied and deeper substantive and management skills , and 
encourage movement within the Secretariat that will enhance knowledge -sharing and collaborative 
work across the Secretariat. DDG Ellard also said th e speed of the recruitment processes will be 
improved and the Secretariat would improve its methods to  identify the best talent, whether internal 
or external, in the most efficient and cost -effective manner. The review  of the promotions policy is 
geared at making it more efficient and equitable and to  motivate and reward high -achieving staff.  
7.13.  In conclusion , DDG Ellard emphasize d that th e transformation process is designed to 
strengthen the Secretariat to better serve all Members. She stated that she will keep the Committee  
updated about further progress at each CBFA meet ing. 
7.14.  Commenting on the process for up dating Members on the Transformation Exercise, a Member 
said that there is a bit of confusion in message delivery, especially when the updates are made at 
the end of a Trade and Negotiations Committee meeting in a way where Members cannot engage. WT/BFA/ 203 
 
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  He expres sed appreciation that an update is being made to the CBFA as this is an appropriate place 
for this.  
7.15.  The Member said he cann ot digest DDG Ellard 's report and cannot ask thoughtful questions 
in this format. He requested that the DDG's remarks be circulate d so that Members can follow up 
under the same agenda item at the next  CBFA meeting . He said an alternative would be for a written 
update to be circulated to Members in advance of Committee meeting s so that they can prepare.  
7.16.  The Member said some a spects of the update touch on issues that the Committee has 
discussed before, such as how promotions connect to the decade -long work that had been done to 
reverse the  inverted  pyramid  of the staff . He said that the Committee previously had conversations 
on the budgetary overspending  on short-term staff and how it is connected to failures in the 
recruitment process. He said it would be useful to be able to find out whether problems are actually 
being s olved or if the external consultants came  with a template to fix problems that the Secretariat 
did not know it had. 
7.17.  The Member said that l ast year , Members had engaged on output reporting, strategic 
foresight, horizontal coordination , and other problems identified by Members in the Secretariat , 
which should support and serve Members . He said what had just been  provided through the update 
are concerns that good management would have already identified . He asked why it was necessary 
to have a  transformation unit to award pe ople or to encourage good work.  He said he is really 
confused as to what this transformation unit is doing , and he noted that it is not what he considers 
reform.  
7.18.  The Member said the Committee had just discussed long-term liabilities and that it is 
importan t that whatever this transformation achieves, the Committee needs to  understand what the 
long-term implications are. He hoped that  the process can be fixed to  provide more clarity because 
the Committee has  identified issues that connect Members to the Secr etariat but none of  those 
issues were mentioned in the update.  The Member said the update covered  things that were on the 
auditor's report from four or five years ago and left him  wondering  whether these are being 
addressed or whether  the consultants came  up with something completely different . He said the 
Committee had been engaged in a lot of these issues and that this  is not micro -management  but 
macro -accountability.  
7.19.  DDG Ellard  corrected the record to note that the Director -General 's comments at the 
TNC/HODs meeting the day before were at the end of her opening remarks , not the end of the 
meeting , and that t here was an opportunity to engage should Members want. She said she had 
heard the delegates' desire to get more information , and her statement was an effort to respond to 
that request. She highlighted that because the meetings related to the transformation exercise 
occur, giving the Committee  something in advance is difficult because the status of the 
transformation process is alwa ys chang ing. 
7.20.  DDG Ellard said she fully support s putting her report on the agenda  of the next Committee 
meeting so that Members can raise any issue after having reviewed her report. She also said her  
door is always open to discuss any of the issues before the next Committee meeting . 
7.21.  DDG Ellard reassure d the Committee  that she is  aware of all the work that the Committee  has 
done over the years to address the inverted pyramid . As to promotions , she said  she cannot give 
much detail because the subject has not yet reached the stage of consideration by  the Steering 
Committee . She said she understand s that  there are budgetary implications if the number of grade 
ten posts were to be suddenly increased and tha t the Secretariat would need to discuss this with the 
Committee . 
7.22.  DDG Ellard said this transformation exercise  was never intended as a reform exercise related 
to substantive trade policy issues, noting that such transformation would have  to emerge from 
Memb ers. She said the current exercise is instead aimed at making the Secretariat more fit for 
purpose .  She emphasized that the Director -General  and the DDGs have been in office for about a 
year and have observed some of the problems that staff experiences because ways of working do 
not really motivate them. She said the objective is to determine ways to address these matters , 
which had not been done adequately in the past . WT/BFA/ 203 
 
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  7.23.  DDG Ellard acknowledged tha t the C BFA has been talking about issues like long -term liabilities 
and how they fit into the transformation exercise. I n this regard she emphasized that one very 
important tool to address long -term liabilities is to enhanc e the risk management system in t he 
WTO. She said one of the key elements of risk management will focus on long-term liabilities and 
address budgetary issues relating to short term staff.  
7.24.  A Member t hanked DDG Ellard for providing information in addition to what the Director -
General had to uched upon at the TNC/HoDs meeting the previous day and said it is good to focus 
on this topic a bit more in the CBFA.  Appreciating the initiatives so far, the Member said Members 
and the Secretariat share the same objectives and that it is important to continue to improve the 
functioning of the Secretariat and the organization. He said  there is a bit of an overlap with the work 
in the CBFA . He said, aside from the budget implications, the CBFA also covers matters of 
administration . 
7.25.  The Member suggested that the Secretariat could provide Members with  a general written 
summary of activities undertaken and planning . He emphasized the need for a strategic plan . He 
said that such a written summary would enable t he Committee to keep track of all the different work 
streams , in addition to DDG Ellard 's regular reports to CBFA . 
7.26.  A Member echoed comments made by other delegation s on the c onflict in Ukraine. The 
Member further stated that, to ensure that the WTO is able  to function and support its Members in 
participating in the rule -based multilateral trading system, Members must remain cognizant of the 
precarious situation facing th e Organization. She said t he illegal military actions by the 
Russian  Federation against the sovereign country, territory , and people of Ukraine demonstrate a 
complete disregard for the rule -based international order and trust in all Members . She said Russia 
has destroyed much of Ukraine's ability to supply the world with food and has undermined Ukraine's 
ability to participate in the multilateral trading system . She noted that Russia's actions fundamentally 
call into question the disciplines and norms of to all international institutions. The Member said her 
delegation continue s to cal l on Russia to live up to its responsibility to maintain international peace 
and security.  
7.27.  The Member then said her delegation appreciates the Secretariat's t ransparency efforts to 
inform Members about the transformation exercise and asked that exchanges w ith Members 
continue.  
7.28.  Several Members echoed the request to receive written reports before Committee meetings 
and the importance of Members being able to prepar e in advance . 
7.29.  A Member asked DDG Ellard  to give some information pertaining to  the second phase of the 
transformation exercise on elements linked to possible changes in the structure and strategic 
planning of the Secretariat.  
7.30.  A Member asked t o add specific numerical data in the reports for Members to get  a better 
understanding  of the rationale behind each activity being undertaken  as this would give Members a 
clearer  understanding of what is going on.  
7.31.  A Member said t here are three levels of the so-called "reform", "review"  or "transformation" . 
One is reform in the sense in which it i s discuss ed at TNC  or General Council  meetings in the context 
of the multilateral trading system. The third level is the transformation in the Organization itself, 
which is what is being discussed by the Committee . The piece in the middle , which is not under 
discussi on, is the objectives and the purpose of the Organization , which should be driving the 
transformation.  
7.32.  The Member said DDG Ellard had mentioned that the purpose of the  transformation  exercise 
is to make the organization fit for purpose . He said that presumes the purpose is known . The Member 
said that, however, the conversation regarding the purpose had not taken place. He said the 
Members have to take some of the blame  for this . He said that in the past , the Committee had 
discussed things li ke strategic foresight and enhanced indicators and , for some reason , they have 
not been maintained or Members  did not have substantive discussion s on them. He said the 
Committee ought to put these topics back on  the agenda because they drive the organizati on, the 
activities , and the budget and should be driving the transformation exercise.  WT/BFA/ 203 
 
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  7.33.  The Member said the CBFA work plan, in his view,  is not a work plan  but a set of agendas into 
the futur e. He said the fact that it does not include issues such as strateg ic foresight or enhanced 
output indicators is the fault of the Members  because they agreed to that agenda. He said some 
responsibility lies with Members to drive particular issues and , in turn , the rationale and purpose for 
the transformation taking place.  
7.34.  DDG Ellard thanked Members and said their comments  and the discussion are very helpful  in 
enabl ing her to make her presentation s more in line with  what Members  want. She said what she is 
hearing from Members is a need to focus on things like strategic planning  and purpose . She added 
that these are  definitely part of this transformation exercise as reflected in  the documentation that 
had been  shared with Members. She said these aspects would be considered at the end  of the 
process , because there is a lot of foundational work that do first. 
7.35.  DDG Ellard  said that when she stated that the Members would be engaged on matters that 
have budgetary implications, she was not r eading that narrowly  and knows that Members will take 
a very broad view  on this issue. For example, things like promotions  have a budgetary implication 
as well as  effects on the inverted pyramid  concept . She noted that, at the same time , there is  a very 
serious situation that has developed within the Secretariat in which there is  a large number of very 
senior staff who have been here for many years and who operate at a very high level but have not 
been able to be promoted . She said this situation affects the Secretariat's  ability to retain the best 
people possible.  
7.36.  Responding to the question about specific numerical data , DDG Ellard said the Secretariat 
would provide data in particular instances when that data is available and relevant . 
7.37.  With regard to the status of recruitment for recently published vacancy notices f or Directors, 
DDG Ellard said the vacancies are in LDSD, CTNC, HRD, IERD , and ERSD. She stated that the LDSD 
vacancy notice closed in December  and the selection process is at the final stage. The deadline for 
applications for the CTNC post has closed and t he selection process is underway. The HRD and IERD 
vacancy notices were posted during the previous week , with a deadline four weeks from the date of 
the vacancy notice. The position in ERSD will be advertised shortly. DDG Ellard said, as she had 
mentioned before , that the Secretariat is  using search firms to help identify candidates for some of 
the vacancies , in addition to the vacancy notices.  
7.38.  The Chair said she  notes a vast interest of delegations to receive information, not only orally 
but also in writin g, and their wish to be an active part of the discussion and to give input. She said 
she will  engage with the Secretariat to see how to improve and to be as transparent as possible . 
The Committee took note of the statements made and will revert to the issu e at its next meeting.  
8  INDIA'S REVISED PROPOSAL ON FINANCIAL REGULATION 19  – WT/BFA/W/5 64/REV.1  
8.1.  India presented its revised proposal , which is co -sponsored by the United States. The delegate 
of India  gave a brief history of the revisions  that had been proposed for Financial Regulation 19 since 
2019.  
8.2.  He thank ed Members for their constructive feedback on previous versions of the proposal and 
expressed hope that the latest proposal contains solutions to earlier concerns. In particular : the 
definition of cost has been narrowed to focus only on additional direct costs  because any reference 
to indirect cost could create complexity ; a threshold of 20% of a staff member 's time has been 
proposed to define when support for a specific Trust Fund would become material ; and an alignment 
of the notification of new Trust Funds  with normal CBFA meeting cycles and timeframes  has been 
proposed , thus replacing the previous suggestion of 60 working days . 
8.3.  He said the propos al does not alter the existing manner in which voluntary contributions are 
reviewed by the CBFA, but simply ensures transparency . The decision -making authority to receive 
voluntary contributions will still be with the Director -General when such contributio ns do not create 
additional direct costs to the WTO regular budget. He said their proposal seeks only to require 
transparency about such contributions through CBFA meetings. Therefore , neither any Member nor 
the Committee can block the receipt of any volun tary contributions that do not result in additional 
direct costs for the regular budget . This transparency, he emphasized, will remove distrust about 
trust funds.  WT/BFA/ 203 
 
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  8.4.  The United States thanked India for having outlined the proposal and noted that it narrow s 
down many issues and clarifies the process for accepting voluntary contributions . 
8.5.  The U nited States clarified that the cost assessment would be applied at the point of the 
decision to accept a new Trust Fund and would be based on AGSD's credible assessmen t of what is 
intended/expected in terms of regular budget staff resources , if any . The proposal does not suggest 
that staff time on Trust Funds would be policed on an  on-going basis  and simply provides a threshold 
analysis of design at the inception of the fund . In addition, the proposal would not prohibit pulling 
in regular budget staff to support a big project under the Trust Fund. Instead, the proposal is meant 
to cover the situation in which a new Trust Fund is designed to utilize several staff for which the 
donor has no intention of funding. The United States concluded by saying that the consent of other 
Members  would be required only if additional direct costs from the regular budget are  projected to 
be higher than the threshold  of 20%  at the outset.  
8.6.  A Member asked if the 20 % threshold is  based on an existing practice and whether the payroll 
system is adapted to accommodate paying part of a staff member' s salary from the regular budget 
and the other part from a Trust Fund. The Member also asked if there are different rules governing 
the contracts of r egular staff versus staff hired to work fully or part -time on Trust Fund  activitie s. 
8.7.  A Member said his delegation associates itself with comments made by other delegations 
referencing Russia's unjust invasion of Ukraine.  The Member said his delegation does  not have 
specific questions to raise at this stage because it is awaiting instructions from its capital.  
8.8.  After thanking the co -sponsors , a Member said her delegation is  still examining the revised 
proposal . The Member made several comments . Referenc ing additional direct costs  to the regular 
budget of the WTO , the Member said that the current Financial Regulation made reference only to 
financial liability . She said th ere is a footnote defining  additional direct cost s, but no  definition is 
given  for financial liability. Accordingly, the Member sought clarification  whether this  mean s that the 
co-sponsors prefer  to maintain the reference to financial liability as it is in the current 
Financial  Regulation 19.  
8.9.  The Member said her delegation believe s that Trust Funds are compl ementary to the regular 
budget , but she expressed concern that comments by other Members give the impression that they 
see Trust Funds as potential rivals to the regular WTO Secretariat work . The Member said her 
delegation is  open to discuss ing how to improve the management of Trust Fund s and to enhance 
their transparency. Referring to the 20% threshold, the Member observed that this could be difficult 
to calculate on daily operations . 
8.10.  With r egard to Trust Funds that will not have any additional direct costs or additional financial 
liabilities , the Member said her delegation agrees that the CBFA needs to be informed of such new 
Trust Funds. She asked how the CBFA would be expected to focus its discussions , given that the 
Director -General would have already made the assessment that the Trust Fund will be consistent 
with the policies, aims , and activities of the WTO . She said the mandate of the CBFA is to discuss 
budget matters and not p olicy matters.  
8.11.  The Member raised the concern that, even if no Member were to block a Trust Fund that has 
neither additional direct costs nor additional financial liability, there may be very strong voice s 
against the Trust Fund , even from one Member,  that may say the Trust Fund is inconsistent with 
WTO policies, aims , and activities or raise questions as to the budget . She asked if there would be 
a limit to the number of CBFA meetings at which such discussions could be h eld because otherwise 
there could be undue delays in the establishment of the Trust Fund , particularly if a Member does 
not like the purpose of a Trust Fund . She said the absence of time limits for discussions could result 
in uncertainty. She said her delegation is open to discuss ing ways to address the se concerns with 
the sponsors of the  proposal  as certainty  and predictability  are very important  to pre -empt prolonged 
discussions that could hinder the establishment of Trust Funds and deny developing countries and 
LDCs resources to address some of their needs . 
8.12.  A Member expressed shock  at the reminder that the revision of Financial Regulation 19 has 
been under discussion since  November 2019. He said it is important for the Committee to conclude 
and agree on a clear regulation . The Member said  there is  proper distinction between Trust Fund 
administration and finance and the regular work of the Secretariat . He stated that the aim ought not WT/BFA/ 203 
 
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  to be a full split  or complete segregation of Trust Fund activities from regular budget activities , which 
could be  ineffective, given that Trust Funds are multilaterali zed within the WTO. He said the current 
proposal is drawing the perfect balance.  
8.13.  The Member said that the 20% threshold is not meant to micromanage  and that it provides a 
clear indication to the Secretariat, the recipients , and the donors  as to how determinations should 
be made. He said the role of the CBFA would  clearly be that when there is a demand for significant 
resources from the regular budget, the CBFA  must make a decisi on. He added that  when the 
threshold is not crossed , bearing in mind the assumption  that the Director -General accepts only 
those Trust Funds that are within the objectives of the WTO , then simpl e notification to the CBFA 
would suffice  and thus the  Committee would not be required to make any decisions.  
8.14.  A Member asked the frequency  and format in which the time spent on Trust Funds would be 
calculated to assess their standing relative to the 20% threshold . The Member also asked for 
clarification of the meaning of the following wording, in Annex C, "in accordance with the agreed 
rules of procedure for distributing CBFA meeting documents. " 
8.15.  A Member pointed to the fact that in one part of the document, reference was made to "direct 
costs" whereas in other places the reference was to "additional direct costs". She asked if there is a 
difference. India respon ded that t his would be corrected to ensure consistency of wording.  
8.16.  The United States , as co -sponsor,  thanked Members for their valuable questions and rich 
discussion. He said this issue is moving in a positive direction . He thanked the Chair of the Working 
Group on Trust Funds and the Member s that had been active in that Working Group for having 
contributed to a much better understanding of the issues pertaining to Trust Funds . 
8.17.  The United States then responded to questions as reflected in paragraphs 8.18 to 8.24 below.  
8.18.  The United States said that the definition of additional direct costs is intended to add clarity  
instead of redefining  financial liability in a way that might deviate from the definition that exists in 
international accounting practices. He said that the spons ors are open to discussing whether an 
additional definition would be  needed  or could be included.  
8.19.  On the tracking of partial funding of salaries when the threshold of 20% is surpassed,  the 
United States said some of the  existing trust funds share some  costs, so mechanisms to do so 
therefore exist in the Secretariat.  
8.20.  In response to concerns about tension within the C ommittee and the ways in which Members 
could obstruct agendas , the United States said there is no Financial Regulation that can prevent any 
Member  from obstructing , which already occurs . The United States said the  proposal is aimed at 
provid ing upfront clarity within Financial R egulation  19 to avoid acrimony. He said upfront 
transparency  is beneficial and would also give an opportunity to Memb ers to present and be proud 
of their contribution s and to explain to other Members what the Trust Funds  are intended to do. It 
would also encourage beneficiaries to know about the Trust F und and other Members to contribute 
money for the Trust Fund.  
8.21.  The upfront transparency , he added,  would also address much of the historical backlash 
caused when Members  did not know a Trust Fund was created until it appeared , fully formed and 
operational . 
8.22.  The United States said that the phrase "in accordance with the agr eed rules of procedure for 
distributing CBFA meeting documents" will not create additional procedural rules  because these were 
already agreed by the Committee in early 2021 . 
8.23.  The United S tates said if a T rust Fund is to be placed in ITTC, perhaps there will be  no concerns 
about regular budget staffing because staff in ITTC largely work on Trust Funds . However, i f a Trust 
Fund is to be placed within a Division such as ERSD, there could be a  different threshold  because it 
matter s where the Trust Fund lands  in the Organization and who is staffing it.  
8.24.  The United States explained that the threshold of 20%  translates to one day a week. Another 
perspective whe ther contributors to a Trust Fund  that is paying an employee's full salary to work on WT/BFA/ 203 
 
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  activities for the  Trust Fund  would find it  acceptable for the person to then work mainly on areas 
funded from the regular budget , which would mean that the Trust Fund is subsidizing the regular 
budget, without the express approval of contributors to the Trust Fund.  
8.25.  India thanked Members for their comments and questions , adding that the United States had 
answered all the  questions.  He said the proposal is intended to give guideline s to AGSD  because  
AGSD, not the Members, would determin e what c onstitutes  additional  direct cost s and whether a 
Trust Fund is in the overall objectives of the Organization.  
8.26.  India said the sponsors do not view T rust Fund contributions as being in competit ion with the 
regular budget  because both sources of funding are complementary. India said the sponsors will 
continue to engage with Members after the meeting , and before the next Committee meeting,  to 
reach a  landing zone . 
8.27.  India concluded by expressing hope that Members will appreciate the sincerity in the efforts 
of the sponsors and asked for the Chair's support to reach finality on this Financial Regulation.  
8.28.  An Official of the Secretariat thank ed India and the U nited States for the updated proposal 
and said the text is very reasonable. She thank ed Members  for thei r questions and the responses 
that were given, saying that th e explanation that the 20% threshold would be assessed once, at the 
beginning of the establishment of a Trust Fund , had aided her understanding  and addressed her 
concern . Furthermore, the Secreta riat's concern regarding definitions was addressed.  
8.29.  The Official of the Secretariat said the Secretariat is very  eager for the full set of revised 
Financial Regulations to be endorsed by the CBFA for approval by the General Council, as they are 
now three years overdue , as stipulated in Financial Regulation 4 . She expressed the hope that , given 
the very good progress made during the Committee meeting, Financial Regulation 19 would be 
concluded and endorsed by the Committee during the next meeting or two.  
8.30.  The Chair said the Committee w ould revert  to this topic at the next meeting. She said that 
this schedule would  give Members  time to engage in bilateral or trilateral discussions amongst 
themselves  to further advance the issue of Trust Funds and Financial Regulation 19.  
9  PROPOSED FINANCIAL REGULATION FOR CONTINUATION OF OPERATIONS PENDING 
THE APPROVAL OF THE WTO BUDGET  
9.1.  The Chair introduced the agenda item by recalling th at the Committee had discussed possible 
revisions to Financial Regulation 10 in early 2020 . She added that in 2021, Mexico and the 
United  States had suggested a revision to Financial Regulation 6  in lieu of Financial Regulation 10 . 
9.2.  The Chair stated that sh e held consultations with interested delegations on 11 and 
14 June 2021, but there had not seem ed to be much interest in pursuing this topic.  
9.3.  The Chair noted that, at the meeting of the CBFA held on 17 March 2022, some delegations 
briefly commented on the matter when the 2022 CBFA Work Plan was being discussed.  
9.4.  The Chair asked Members whether the issue of continuity of operations is still a priority and if 
Members wish to pursue the topic further, either on the basis of a revision to Financial Regulation 6 
or Financial Regulation 10. The Chair added that she is a vailable to meet with Members to facilitate 
discussions, if there is sufficient interest among Members.  
9.5.  Several Members that said  this is an important matter and should not be closed.  
9.6.  A Member said that his delegation is considering whether the next steps could be to address 
the matter th rough Financial Regulation 6 or  Financial Regulation  10 or another Financial Regulation. 
He said as Members have not been able to achieve consensus around any of the proposals, it is 
worthwhile to continue discussing the matter at a later date.  
9.7.  A Member said that, at the Committee meeting in March 2022, an  inconsistency of the proposed  
revision to F inancial Regulation  10 with Article VII of the Marrake sh Agreement  had been raised . He WT/BFA/ 203 
 
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  said his delegation would like the Secretariat to share its legal opinion on this  before proceeding 
further with discussions on the topic . 
9.8.  A Member said  that after many discussions and comments on Financial Regulation 10, 
complexities emerged. These i nclude suggestions to give interim authority to the Director -General 
with a time limit , quarterly contributions , and listing permissible expenses. The Member recalled 
that her delegation and another delegation had made a proposal for revisions to be made t o Financial 
Regulation 6, with the aim of simplifying things and allowing an extension of the biennial budget by 
one more year. She said this would be consistent with Article VII of the Marrakesh Agreement.  
9.9.  The Member said the Committee  had not really had the opportunity to give enough 
consideration to the proposed changes to Financial Regulation 6 and added that her delegation and 
the co -sponsor of the proposal remain open to meet ing bilaterally with any Member that wishes to 
discuss the proposal further.  
9.10.  A Member said that his delegation would support any Financial Regulation that would assure 
the continuity of operations pending the approval of the budget.  
9.11.  The co -sponsor of the proposed revision of Financial Regulation 6  said that  a process that 
ensures t he continuity of operations already exists, as drafted in the Marrakesh Agreement. He 
added that he recognizes that some Members may not want to use it  and hence the conversations 
are really about a second or alternate mechanism as a backup.  He said that h is proposal is a 
compromise solution,  instead of revising Financial Regulation 10 . He added that two delegations that 
had previously been more inclined to the Financial Regulation 10 proposal had expressed their 
readiness to endorse changes to Financial Regulation 6 during their earlier interventions during the 
Committee meeting. He reiterated that revisions to the Financial Regulations should not undermine  
the Marrakesh Agreement.  
9.12.  The Chair as ked if any delegation would like to respond to the suggestion that had been made 
by another Member for a legal opinion to be provided regarding the implications of revising 
Financial  Regulation 10  or Financial Regulation 6 given the Marrakesh Agreement.  
9.13.  In response, a Member said that their delegation  is, as a systemic matter, very s keptical of 
any requests made for legal opinions that are non -binding. He said that the Marrakesh Agreement 
clearly sets out that Members approve the budget, which the proposed  revision to 
Financial  Regulation 6 maintain s, whereas the proposed revision of Financial Regulation 10 is 
inconsistent with this aspect.  
9.14.  A Member said the approval of the budget by the General Council also flows to the approval 
of assessed contributions t o be paid by each Member and is the basis on which bills are sent to 
Members asking for contributions. The Member said their delegation does not see the need for a 
legal interpretation  and is not at all in support of any such legal opinion being in writing  or being 
submitted to the Committee. The Member stated that the Member that requested the legal opinion 
could ask for it directly, not through the Committee. The Member added that several delegations 
had previously asked their capitals for legal interpret ations , and they came to the same conclusion . 
9.15.  An Official of the Secretariat thanked Members for the comments. She recalled that the 
Financial Regulation 10 proposal was made by the Secretariat and added that the Secretariat is keen 
to hear Members ' determ ination on how to proceed. She said the Secretariat does not have anything 
else to add and is mindful not to detract from the focus on a resolution  by Members.  
9.16.  DDG Ellard stated that one of the options would effectively mean having three -year budgeting. 
She posed a series of questions for Members to consider. She said that one question is how that 
option would work in practice . She asked whether this proposal could send an unintended signal 
when the Secretariat is putting forward a budget request that the  Secretariat is implying that there 
may be a crisis situation  at the end of the period . She asked whether stating in the regulation that 
the Director -General has the authority to ask for a third year creates an implication that the Director -
General would n ot have the authority otherwise to request a third year. She noted that the rationale 
behind the Secretariat's initial request was merely to make sure that the emergency obligations of 
the Organization can be fulfilled if there is a budget crisis, such as building management costs, WT/BFA/ 203 
 
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  insurance, security , and staff remuneration. DDG Ellard concluded by saying she is  more than  willing 
to talk to delegations about their views on this issue.  
9.17.  The Chair proposed that the Committee  revert to this matter at a future Committee meeting.  
9.18.  A Member requested that, as this agenda item had originally been tabled by the Secretariat, 
more context  be provided through a document prepared by the Secretariat , ahead of the next 
meeting when the CBFA is to discuss the topic.  
9.19.  A Membe r said his delegation is sympathetic to the position of the Secretariat because the 
Secretariat had initially put the topic on the agenda  and sought guidance from Members.  
10  CLOSING REMARKS  
10.1.  The Chair thank ed Members for their active participation during the meeting.  
10.2.  Before closing the meeting, she informed the Committee that t he next formal meeting will 
take place on 24 May.  
__________  