CHEMICAL WEAPONS CONVENTION (CWC): WRAP-UP FOR

UNCLAS SECTION 01 OF 03 THE HAGUE 000467

SIPDIS

SENSITIVE

STATE FOR AC/CB, NP/CBM, VC/CCB, L/ACV, IO/S
SECDEF FOR OSD/ISP
JOINT STAFF FOR DD PMA-A FOR WTC
COMMERCE FOR BIS (GOLDMAN)
NSC FOR CHUPA
WINPAC FOR LIEPMAN

E.O. 12958: N/A
TAGS: PARM PREL CWC
SUBJECT: CHEMICAL WEAPONS CONVENTION (CWC): WRAP-UP FOR
WEEK ENDING 20 FEBRUARY

REF: A. (A) 2003 HAGUE 2944

B. (B) STATE 17041

C. (C) HAGUE 195

This is CWC-24-04.

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SCIENTIFIC ADVISORY BORD CHAIR ADDRESSES WEOG
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1. (U) Dr. Tom Inch (UK),Chairman of the Scientific
Advisory Board (SAB),participated in the Western European
Group (WEOG) meeting on Feb 17 to field questions from WEOG
delegations on SAB priorities as well as scientific and
technological developments. Inch noted that the SAB, as the
technical advisory arm of the Director-General of the OPCW,
is in a unique position to analyze how scientific and
technological developments in the chemical industry and
destruction affect OPCW verification activities, quite apart
from the political concerns that often drive States Party
debate.


2. (U) Not one to mince words, Inch complained that a focus
on procedural debates, rather than substantive issues,
hampers OPCW institutional progress. He observed that
delegates lost sight of the object and purpose of the
Convention. In particular, he cited "legalistic"
interpretations by States Parties regarding non-inclusion of
chemically identical salts of treaty-monitored bases in
verification as a prime example of States Parties not
fulfilling the purpose of the Convention by creating a
verification loophole. He also noted the migration of States
Parties towards an emphasis on schedules and verification of
monitored, known chemicals, rather than attention to the
General Purpose Criterion. Having such a focus on schedules
for verification and associated prohibitions undermines the
object and purpose of the treaty.


3. (U) Inch commented that declarations and inspections were
intended to be confidence-building measures, not the end-all,
be-all of verification, and that novel agents, scientific and
technological developments, and inspection tools such as
on-site sampling and analysis are critical to effective
verification. Inch suggested that increased participation of
the SAB as a "peer review" partner in OPCW inspector
training, policy development and implementation could be
useful in ensuring technological and scientific developments
continue to play a prominent role in the execution of the
Convention.

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ARTICLE IV/V CONSULTATIONS LAUNCHED
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4. (U) The first round of consultations on stabilizing the
funding of verification activities under Articles IV and V
was launched February 19 by facilitator Johan Verboom of the
Netherlands. Seventeen delegations participated in the
discussion, which went into overtime and continued follow-on
discussions in the halls. Verboom opened the meeting by
seeking confirmation that all delegations were prepared to
enter discussions on the basis of the proposal put forward by
the Advisory Body on Administrative and Financial Matters
(ABAF) in November (REF A). While a few (Mexico, Brazil,
Italy) said they were still awaiting confirmation from their
governments, all agreed to focus discussion on the ABAF
proposal. Japan noted that as a matter of policy, budget
surpluses should be returned to States Parties, but that it
nevertheless was prepared to support the ABAF proposal.
Given that this approach had supposedly been agreed to in
advance, the discussions covered a surprisingly wide range of
views.


5. (U) Verboom distributed a draft decision at the meeting
(e-mailed to AC/CB) that, like the ABAF recommendation,
centered on expanding the Working Capital Fund (WCF) and
extending the repayment period. However, the draft differed
in important respects from the ABAF proposal by not spelling
out how the fund would be replenished and placing few
restrictions on its use. Verboom explained that this
language was drawn from other UN-affiliated organizations'
regulations concerning WCFs rather than focusing on the
unique funding needs that Article IV and V activities impose
on the OPCW. The UK led a number of delegations urging that
the decision hew more closely to the ABAF line. OPCW
Director of Administration Herb Schulz sought to retain
maximum flexibility in using an expanded WCF. U.S. Del
stressed that the size of the WCF, measures to capitalize it,
and regulations governing its drawdown and replenishment
would have to be carefully delineated (per REF B).


6. (U) Peter Beerwerth (Germany) argued that revising
Financial Regulations was preferable to Verboom's draft
language "notwithstanding Financial Regulation 6.3 and 6.4"
to expand the WCF. Yu Dunhai (China) noted that the draft
decision made no provision for replenishing the WCF for
drawdowns of inspector salaries if planned inspections were
not carried out (the "ficticious income" problem). Gianpaolo
Malpaga (Italy) was not convinced that the current size of
the WCF was not sufficient, despite Schulz's explanation that
the current, approximate one-month's operating expenses that
is the standard for international organizations, needed to be
expanded because of the additional layouts required to cover
costs of verification under Article IV/V.


7. (U) COMMENT: Notwithstanding the many questions and
objections raised at the initial round of consultations,
Verboom expressed satisfaction that the groundwork had been
laid for more detailed discussion in coming weeks. While
that process will obviously re-write much of the draft text,
we agree that the initial session was useful for putting down
U.S. markers and helping to narrow the scope of future
consultations. We are cautiously optimistic that the talks
will ultimately result in an EC decision that stabilizes
Article IV/V funding while meeting USG requirements for
rigorous accounting. The "ficticious income" problem,
however, will continue to bedevil OPCW budget planning.

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SOME PROGRESS ON FINANCIAL REGULATIONS
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8. (U) Facilitator Peter van Brakel (Canada) resumed
consultations on outstanding revisions to OPCW Financial
Regulations (REF C) by circulating new language (e-mailed to
AC/CB) on Regulations 4.11, 6.2, 6.3, and 10.5. Participants
in the February 19 discussion succeeded in working through
that entire agenda, although several points will be
revisited, as many delegations (including possessor state
India) did not have instructions, and others (including
Russia) were not present. With the caveat that we too did
not have final guidance, USDel drew on standing guidance and
consultations with AC/CB to steer the discussion in a
positive direction.


9. (U) Participants did not reach agreement on revised
language for Regulation 6.2 (a),which cites "miscellaneous
income received during the financial period" as a budget
credit referring to Article IV and V contributions by
possessor states. Beerwerth suggested replacing
"miscellaneous income" with a reference to "contributions as
specified under 5.1 actually received in the financial
period," but Ali Ashgar (Technical Secretariat) was adamant
that for accounting purposes Article IV and V payments must
be counted as "miscellaneous income" or "miscellaneous income
- other" rather than as any kind of "contributions." Finding
deadlock on that point, facilitator van Brakel asked whether
the U.S. would be willing to propose alternate language.


10. (U) At Del's urging, participants supported retaining
the formulation "cash surplus" instead of van Brakel's
proposed "cash balance" in references to the final (audited)
budget in Regulation 6.3., but agreed to use the term "cash
balance" in references to the provisional balance during the
course of a given financial period. On the margins of the
discussion, Arya Sandeep (India) asked whether USDel could
accept van Brakel's proposed change to Article 6.3, which
stipulates that cash surplus credits are to be applied first
against arrears of assessed contributions (current practice)
and then against any arrears of Article IV and V payments (a
change) before being applied as a credit against future
assessments. We said that Washington was still studying that
issue, and guessed that Russia, if it were present, would
object. Sandeep said he did not know where Delhi would come
out on that point.


11. (SBU) Following the consultations, Van Brakel promised
to provide DelOff with an advance look at further proposed
revisions that he plans to distribute for the next round of
discussions, scheduled for March 4. This language, which he
asked us not to share with other delegations until he had a
chance to consult with them, will include a change to the
Financial Rule defining the role of the Office of Internal
Oversight as well as proposed modifications to Regulations
12.1, 12.3, 12.4, and 12.7.


12. (U) Javits sends.



SOBEL