MEETING OF UNIDROIT FINANCE COMMITTEE

UNCLAS ROME 004701

SIPDIS


FROM THE U.S. MISSION TO THE UN AGENCIES IN ROME

L/PIL FOR HAL BURMAN AND JEFF KOVAR
IO/S FOR LISA JACOBSON AND IO/EDA FOR SHARON KOTOK

E.0. 12958: N/A
TAGS: AORC ABUD UNIDROIT
SUBJECT: MEETING OF UNIDROIT FINANCE COMMITTEE

REF: A) STATE 287973 B) ROME 3361


1. SUMMARY: THE FINANCE COMMITTEE OF THE INTERNATIONAL
INSTITUTE FOR THE UNIFICATION OF PRIVATE LAW (UNIDROIT)
MET ON OCTOBER 9 TO CONSIDER THE ORGANIZATION'S 2004
BUDGET. THE U.S. WAS ALONE IN DISASSOCIATING WITH
CONSENSUS ON APPROVING THE BUDGET (AND ITS 3.61 PERCENT
INCREASE),BUT ASSURED THE COMMITTEE, PER REF A GUIDANCE,
THAT WE VALUE THE ORGANIZATION'S WORK. THE SECRETARIAT
AS WELL AS SEVERAL COUNTRY REPS NOTED WITH APPROVAL THE
RECENT U.S. VOLUNTARY CONTRIBUTION FOR THE CAPETOWN
CONVENTION DEPOSITARY FUNCTION. END SUMMARY.


2. U.S. MISSION REP ATTENDED THE OCTOBER 9 FINANCE
COMMITTEE MEETING. PER REF A GUIDANCE, U.S. MADE THE
FOLLOWING POINTS: WHILE WE VALUE THE ORGANIZATION'S WORK
(AND CAN CITE THE RECENT VOLUNTARY CONTRIBUTION FOR THE
DEPOSITARY FUNCTION AS AN EXAMPLE),OUR POLICY FOR
INTERNATIONAL ORGANIZATIONS IN GENERAL IS ZERO NOMINAL
GROWTH; THE BUDGET PRESENTED BY UNIDROIT, WITH ITS 3.61
PERCENT INCREASE, IS A REAL GROWTH BUDGET (THIS POINT WAS
ECHOED BY THE SPANISH REP); AND, WHILE WE CAN ABIDE A
SMALL INCREASE AS A ONE-TIME EXCEPTION TO ZNG POLICY IN
RECOGNITION OF THE ORGANIZATION'S HIGH PRIORITY WORK, WE
CANNOT APPROVE PROGRAM FUNDING FOR THE LEGAL COOPERATION
PROGRAM, WHICH WE BELIEVE SHOULD BE PAID WITH VOLUNTARY
CONTRIBUTIONS. IN THE END, THE U.S. WAS FORCED TO
DISASSOCIATE WITH CONSENSUS, WHILE AT THE SAME TIME
STATING THAT OUR BUDGET POSITION IN NO WAY CHANGES THE
HIGH REGARD IN WHICH WE HOLD THE ORGANIZATION.


3. COMMITTEE MEMBERS FROM AUSTRIA, FRANCE, GERMANY,
ITALY, JAPAN, MEXICO, SPAIN AND THE UK VOICED SUPPORT FOR
THE BUDGET AS STATED, WITH FEW RESERVATIONS AND
QUESTIONS. THE ITALIAN GOVERNMENT, THE LARGEST
CONTRIBUTOR AT E220,000 PER YEAR (THE U.S. CONTRIBUTION
IS HALF THAT AMOUNT) VOWED TO CLEAR THEIR ARREARS FROM
2002 BUT SAID THEIR CONTRIBUTION WOULD REMAIN AT A LOWER
LEVEL (E220,000 INSTEAD OF E258,000) FOR THE FORESEEABLE
FUTURE. THE REPS FROM SWITZERLAND AND RUSSIA REMAINED
SILENT THROUGHOUT.


4. THE JAPANESE REP, SUPPORTED BY SEVERAL OTHER
COUNTRIES, ARGUED THAT THE CAPETOWN CONVENTION DEPOSITARY
FUNCTION SHOULD BE FUNDED BY THE REGULAR PROGRAM BUDGET
IN FUTURE YEARS AND NOT FROM VOLUNTARY CONTRIBUTIONS. HE
REITERATED THE IMPORTANCE OF THE CONVENTION, ADDING THAT
IF THE ORGANIZATION IS TASKED TO PERFORM A FUNCTION, IT
MUST BE ABLE TO BUDGET FOR IT RATHER THAN RELY ON
VOLUNTARY FUNDS. THE RECENT U.S. VOLUNTARY CONTRIBUTION
OF USD 110,000 FOR THE DEPOSITARY FUNCTION WAS
HIGHLIGHTED BY THE SECRETARIAT AND NOTED WITH APPROVAL BY
SEVERAL REPRESENTATIVES.


5. A BRIEF DISCUSSION REGARDING THE LINK BETWEEN
STRATEGIC PLANNING AND BUDGET FORMULATION WAS INITIATED
BY THE SECRETARIAT AND GREETED WITH APPROVAL BY A
MAJORITY OF MEMBER STATES. THERE WAS GENERAL AGREEMENT,
INCLUDING FROM THE CONCLUSIONS OF THE APRIL 2003
BRAINSTORMING SESSION, THAT THE ORGANIZATION NEEDS TO DO
MORE STRATEGIC PLANNING AND TO LINK THAT PLANNING WITH
FUTURE BUDGET REQUESTS. THE SECRETARIAT PROPOSED THE
CREATION OF A SMALL WORKING GROUP TO EXAMINE THE ISSUE,
AND THE ITALIAN REPRESENTATIVE VOLUNTEERED TO BE A PART
OF THE WORKING GROUP. QUESTIONS OF HOW THIS GROUP WOULD
FUNCTION OR WHEN IT WOULD MEET REMAIN OPEN.

HALL




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2003ROME04701 - Classification: UNCLASSIFIED