REPORT OF 56TH UNIDROIT FINANCE COMMITTEE

UNCLAS ROME 005491 SIPDIS L/PIL FOR HAL BURMAN AND JEFF KOVARS; IO/EDA FOR WINNICK IO/S FOR LISA JACOBSON FROM FODAG E.O. 12958: N/A TAGS: AORC ABUD UNIDROIT SUBJECT: REPORT OF 56TH UNIDROIT FINANCE COMMITTEE REF: A) ROME 4415, B) SECSTATE 190770, C) ROME 4389, D) SECSTATE 196873, E) ROME 04940 ¶1. SUMMARY. THE 56TH SESSION OF THE INTERNATIONAL INSTITUTE FOR THE UNIFICATION OF INTERNATIONAL PRIVATE LAW (UNIDROIT) FINANCE COMMITTEE APPROVED A 2003 ORDINARY UNCLASSIFIED PAGE 02 ROME 05491 120655Z BUDGET LEVEL OF EURO 1,802,550.00, A NOMINAL INCREASE OF 19,673 EUROS OVER THE 2002 LEVEL. USDEL DID NOT BLOCK CONSENSUS BUT STATED THAT THE U.S. POSITION CONTINUED TO BE ZERO NOMINAL GROWTH. THE BUDGET PROPOSAL WILL BE SENT TO THE DECEMBER 6, 2002 GENERAL ASSEMBLY FOR FINAL APPROVAL. END SUMMARY. ¶2. THE 56TH SESSION OF THE UNIDROIT FINANCE COMMITTEE MET ON OCTOBER 22, 2002. AS REPORTED IN REFTEL E, THE 55TH SESSION OF THE COMMITTEE HAD BEEN UNABLE TO APPROVE A BUDGET DUE TO MEMBER CONCERNS (JAPAN, ITALY, FRANCE, SWITZERLAND) ABOUT A LAST-MINUTE INCREASE IN THE BUDGET PROPOSAL (TO ALLOW UNIDROIT TO CARRY OUT ITS FUNCTIONS AS DEPOSITARY FOR THE RECENTLY CONCLUDED CAPETOWN CONVENTION ON INTERNATIONAL INTERESTS IN MOBILE EQUIPMENT) AND THE ANNOUNCEMENT OF THE GOVERNMENT OF ITALY THAT IT WAS REDUCING ITS CONTRIBUTION. ¶3. AS A RESULT, THE SECRETARIAT WAS OBLIGED TO WITHDRAW THE PROPOSAL AND REDRAFT THE BUDGET TO TAKE INTO ACCOUNT THE LOWER ITALIAN CONTRIBUTION. AT EURO 1,802,550.00 (FOR ORDINARY EXPENDITURES) THE RE-DRAFTED BUDGET PRESENTED TO THE 56TH SESSION CAME IN SLIGHTLY BELOW THE ORIGINAL PROPOSED BUDGET LEVEL (REFTEL A) AND REPRESENTED A NOMINAL INCREASE OF ONLY 19,673 EUROS. (NONETHELESS, THE U.S. CONTRIBUTION REMAINS THE SAME (EURO 110,000) AS IN THE ORIGINAL BUDGET LEVEL.) WHILE FUNDING FOR SCHOLARSHIPS FOR DEVELOPING COUNTRY RESEARCHERS AND FOR CONSULTANTS WAS REDUCED, THE RE-DRAFTED BUDGET DOES NOT PROVIDE THE MEANS FOR UNIDROIT TO CARRY OUT THE FUNCTIONS OF DEPOSITARY FOR THE CAPETOWN CONVENTION. IN PRESENTING UNCLASSIFIED PAGE 03 ROME 05491 120655Z THE RE-DRAFTED BUDGET UNIDROIT SECRETARY GENERAL HERBERT KRONKE CALLED THE PROPOSAL ONE "BORN OUT OF DESPAIR" WHICH COULD BE TOLERATED FOR ONE YEAR, BUT WHICH, AFTER THAT, WOULD BE "UNSUSTAINABLE." ¶4. THE FINANCE COMMITTEE APPROVED THE OVERALL BUDGET LEVEL. USDEL STATED THAT, WHILE THE U.S. WOULD NOT BLOCK CONSENSUS, THE U.S. POSITION WAS AND REMAINED ZERO NOMINAL GROWTH. ¶5. IN DISCUSSION OF THE RE-DRAFTED BUDGET, MEXICO, FRANCE, GERMANY, SPAIN, SWITZERLAND AND AUSTRIA EXPRESSED DIFFICULTIES WITH THE SECRETARIAT'S PROPOSAL TO REDUCE "LEGAL ASSISTANCE TO DEVELOPING COUNTRIES" (PRIMARILY SCHOLARSHIPS FOR RESEARCH). USDEL STATED THAT THIS WAS AN APPROPRIATE LINE ITEM FROM WHICH TO SEEK SAVINGS, AND ENCOURAGED COUNTRIES TO CONSIDER VOLUNTARY CONTRIBUTIONS FOR SUCH SCHOLARSHIPS INSTEAD. AS A RESULT OF THESE CONCERNS THE SECRETARIAT WILL JUGGLE SOME OF THE INTERNAL LINE ITEMS WITH A VIEW TO PROVIDING MORE FUNDING FOR SCHOLARSHIPS WHILE STAYING WITHIN THE APPROVED BUDGET ENVELOPE. THE REVISED PROPOSAL WILL BE SUBMITTED TO THE DECEMBER 6 GENERAL ASSEMBLY. ¶6. CONCERNING THE DEPOSITARY FUNCTIONS, JAPAN AND AUSTRIA ALSO EXPRESSED SUPPORT FOR UNIDROIT CARRYING OUT THESE FUNCTIONS, BUT STATED THAT THE PROPOSAL HAD COME IN TOO LATE FOR CONSIDERATIONS IN CAPITALS. THESE COUNTRIES SAID THAT THE NEED TO SUPPORT THE DEPOSITARY FUNCTION WOULD BE GIVEN MORE SYMPATHETIC CONSIDERATION IN NEXT YEAR'S BUDGET PROPOSAL. UNCLASSIFIED PAGE 04 ROME 05491 120655Z ¶7. THE FINANCE COMMITTEE ACCEPTED THE FINAL MODIFICATIONS TO THE BUDGET AND THE APPROVAL OF THE ACCOUNTS FOR THE 2001 FINANCIAL YEAR (ALSO OUTSTANDING FROM THE 55TH SESSION.) HALL UNCLASSIFIED > 2002ROME05491 - Classification: UNCLASSIFIED