1. The Japanese delegate has told USDel, confidentially,
that the supplemental budget recently approved by the Diet
does not include any funding for the 2007 assessment for the
Capital Master Plan (CMP). The GOJ hopes to include funding
in next year's supplemental budget (normally approved in
March), which means that Japan's 2007 contribution is likely
to be later than the U.S. contribution (included in the FY08
President's Budget). He did not indicate whether Japan was
seeking to pay its entire assessment in one payment or over
five years. He did, however, indicate that the Ministry of
Finance did not agree to submit a request in this most recent
supplemental budget and that the only vehicle for financing
the CMP assessment is through the supplemental budget, not
the regular cycle. The delegate also told USDel that the
regular budget cycle has begun, with the proposals to be
discussed by the Diet in coming weeks. They hope to receive
funding from this process that will allow them to at least
pay their share of the working capital reserve fund and of
the $42 million appropriation for 2007. He asked that this
information not be shared with other Member States or the
Secretariat, given the sensitivities regarding CMP financing.

SIPDIS
WOLFF