Identifier
Created
Classification
Origin
04ROME3992
2004-10-18 04:31:00
UNCLASSIFIED
Embassy Rome
Cable title:  

MEETING OF UNIDROIT FINANCE COMMITTEE

Tags:  AORC ABUD UNIDROIT 
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180431Z Oct 04
UNCLAS ROME 003992 

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

L/PIL FOR HAL BURMAN AND JEFF KOVAR
IO/S FOR CHRIS VAN FOSSAN AND IO/EDA FOR SHARON KOTOK

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

REF: a) STATE 214239 b) ROME 2391

UNCLAS ROME 003992

SIPDIS


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

L/PIL FOR HAL BURMAN AND JEFF KOVAR
IO/S FOR CHRIS VAN FOSSAN AND IO/EDA FOR SHARON KOTOK

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

REF: a) STATE 214239 b) ROME 2391


1. Summary: the Finance Committee of the International
Institute for the Unification of Private Law (UNIDROIT)
met on October 8 to consider the organization's 2005
budget. A draft resolution on arrears was considered but
eventually dropped after lengthy discussion. U.S. did
not block consensus on the proposed budget of 1.979
million euros, which represents a 4.2 percent increase
over 2004 (assessed contributions for almost all member
states, including the U.S., increased only 1.65 percent
due to a re-valuation of units of account). As most
issues had been resolved in the June committee meeting,
very little budget discussion took place. End summary.


2. U.S. Mission rep attended the October 8 Finance
Committee meeting. Per ref a) guidance, U.S. made the
following points: while we value the organization's work,
our policy for international organizations remains zero
nominal growth. 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 must continue to
urge the organization to exercise maximum budget
discipline. The U.S. made one of only two interventions
on the budget, since most differences had been aired and
issues resolved during the June committee meeting. The
Canadian delegate made the other budget intervention,
echoing the U.S. statement on ZNG and adding a call for
private funding of certain projects.


3. A draft resolution on arrears was discussed at some
length but eventually dropped, primarily because of a
controversial provision that several nations, including
the U.S., did not support. That provision stated that if
a member nation accumulated five or more years of
arrears, its contribution would no longer be included as
part of the organization's annual budget calculations.
The U.S. (along with the UK, Canada, Japan and Mexico)
opposed the provision on several grounds, but primarily
because simply eliminating arrears from budget
calculations is not an acceptable means of combating non-
payment of dues and would send the wrong message to those
non-payers.


4. To clarify questions raised in ref a) para 3, nations
who have accumulated two or more years of arrears already
lose their right to vote in the General Assembly. The
possibility of stricter sanctions was considered, but the
Secretariat advised against a more harsh type of

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suspension or outright expulsion. The Secretariat argued
that it is better to keep as many nations as possible as
members and to continue to approach the arrears issue on
a case-by-case basis. The committee agreed that a "tool
box" approach, or a combination of carrots and sticks,
would be best and the resolution was sent back to the
Secretariat for additional work. The issue will not be

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formally presented before the General Assembly next
month.


5. The SYG appealed once again for a more realistic view
by member nations of the resources necessary to keep the
organization running and accomplish its goals. Since
1998 the Deputy SYG, who retired on September 30, has
worked full-time hours for half-time pay. In addition,
all of the SYG's pension costs have been and are being
paid by the German university from whom he is on extended
leave. Add the depositary function of the Cape Town
Convention, a mandatory task for which there have been
only voluntary contributions thus far, the SYG argued,
and it is easy to see that the current level of activity
cannot be sustained by the current level of resources.


6. Comment: Mission wholeheartedly agrees with the SYG's
sentiments expressed in para 5. The organization spends
less than two million euros annually and the Department,
particularly the Legal Advisor's office, has made no
secret of the fact that UNIDROIT's work is not only

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important for U.S. industry, but is a bargain. The
Deputy SYG's retirement and interim replacement, the
Capetown Convention depositary function, and the need for
an electronic document library are all chronicled in ref
b) and present additional examples the organization's
inability to carry out its core functions at its present
level of funding. Given the above, Mission reiterates
its previous statement that the organization is worth
considering as an exception to the mantra of zero nominal
growth.

HALL


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2004ROME03992 - Classification: UNCLASSIFIED