SEEKING CREATIVE FUNDING FOR THE TOP U.S. INTERNATIONAL

1. (SBU) Mission advises flexibility and creativity in current
negotiations to create a new mechanism for reviewing implementation
of the UN Convention Against Corruption (UNCAC), particularly
relating to the issue of how the new mechanism will be funded. As
negotiations reach the final stages, we are finding ourselves
increasingly isolated in our position that the mechanism can only be
funded by voluntary contributions (even from budget hawk Japan).
Promoting implementation of UNCAC is the top priority for U.S.
international anticorruption efforts, and, thus, it makes sense to
entertain creativity in ensuring an effective and stable mechanism,
including the ability to consider funding options that include a mix
of UN Regular Budget funding and voluntary contributions or a
binding scale of assessments. This request is consistent with
UNVIE's vision in reftel to ensure the U.S. in Vienna adequately
supports the professional work of UNODC, an organization which
significantly furthers U.S. anti-drug and anti-crime priorities.
END SUMMARY.



--------------------------


NEGOTIAIONS IN FINAL STAGES


--------------------------





2. (SBU) Over 130 States Parties to UNCAC, including the U.S., are
poised to adopt terms of reference for a new UNCAC review mechanism
during the 3rd Conference of the States Parties in Doha on November
9-13. Negotiations are in the final stages. The U.S., led by INL
with input and support from the U.S. Office of Government Ethics,
USAID and the Departments of Justice, Commerce and Treasury, is
attempting to design an effective review process that will help
identify weaknesses and best practices in UNCAC implementation and
establish effective targets for technical assistance.



--------------------------


INCREASING ISOLATION
ON FUNDING ISSUE


--------------------------





3. (SBU) As the characteristics of the review process slowly take
shape, the U.S. has found itself increasingly isolated on the issue
of how reviews should be funded. We have followed the traditional
U.S. guidance of opposing the use of UN Regular Budget funding or
any mandatory assessments, and, as such, are advocating only the use
of voluntary contributions to fund the mechanism. This position has
met with serious opposition from many G-77 and non-G-77 countries,
which believe voluntary contributions are not a stable or consistent
source of funding and might lead to an inherent bias favoring donor
states in the operation of the mechanism. The EU and other
like-minded countries which support us on many substantive issues
relating to the mechanism have expressed their desire to see the
review process funded entirely through the UN Regular Budget. Even
Japan, usually our strongest ally on UN funding issues, has recently
expressed an openness to support a mix of UN Regular Budget funding
and voluntary contributions.



--------------------------


FLEXIBILITY FOR A TOP
ANTI-CRIME PRIORITY


--------------------------





4. (SBU) There are strong arguments to consider more flexibility in
the U.S. position on funding methods. UNCAC is the most
comprehensive set of international commitments relating to the fight
against corruption, and has become the cornerstone for U.S.
government international anticorruption efforts. It is also the
most globally applicable anticorruption treaty, with 136 States
Parties to date, including the U.S. The U.S. played a major role
during the negotiations for UNCAC, and has been a subsequent leader
in promoting its implementation. U.S. NGO's and various private
sector coalitions supported U.S. ratification of UNCAC in 2004,
underscoring their desire to see an international review mechanism
created to ensure that other countries would meet their commitments
under UNCAC, thereby leveling the playing field for U.S. business
and promoting integrity worldwide. At the July G-8 Summit in
L'Aquilla, President Obama and other G-8 leaders called for "the
development of an effective, transparent and inclusive review
mechanism" for UNCAC.



5. (SBU) Mission believes considering a mix of UN Regular Budget
funding and voluntary contributions for the UNCAC review mechanism
would not undermine the general principle that the operations of
treaty bodies should not be funded from the UN Regular Budget. This
would not be the first time such an exception has been made. As an
example, UN treaty work related to the elimination of discrimination
against women and other core human rights treaties has been funded,

at least in part, via the UN Regular Budget. In the end, the
principle of restricting the use of UN Regular Budget funding for
the work of treaty bodies remains in place.



6. (SBU) Furthermore, the current U.S. position is inconsistent with
the existing arrangement for funding activities of the UNCAC
Conference of the States Parties (COSP). The current operations of
the UNCAC Conference of the States Parties, created pursuant to
Article 63 of UNCAC and which would be the governing authority for
any new review mechanism, already is funded by a mix of UN Regular
Budget and voluntary contributions. The UNODC Secretariat, via UN
Regular Budget resources, provides administrative support for
regularly scheduled sessions of the COSP and its working groups,
while Member States provide voluntary contributions to support
expert group meetings, model legislation, technical assistance and
other efforts that promote substantive implementation. Given that
the creation of a new mechanism might lead to the dismantling of one
or more of its working groups, we may be able to devise a funding
mix for the new mechanism that minimizes any need to increase what
is already sought for COSP operations in UNODC's biennium budget.



--------------------------


COMMENT


--------------------------





7. (SBU) Reftel outlined the Mission's vision for transforming the
U.S. role in Vienna, particularly in the context of a new financial
and governance (FINGOV) process, to ensure that we adequately
support UNODC's work which significantly furthers U.S. anti-drug and
anti-crime priorities. The creation and operation of an effective
UNCAC review mechanism is a prime example of such work. UNCAC
implementation is a top anti-crime priority for the U.S. UNODC's
role in developing UNCAC and promoting its implementation has been
innovative, professional and responsive to U.S. concerns and needs.
Mission requests that Washington consider supporting negotiating
flexibility to allow for alternative funding schemes, including a
mix of UN Regular Budget and voluntary contributions, or, in the
alternative, a binding scale of assessments. Funding via voluntary
contributions would remain the U.S. position and objective, and
negotiators would consider alternatives only in the case that
agreement on voluntary contributions cannot be secured. Negotiating
flexibility would ensure that we avoid a situation during the COSP
where the U.S. delegation must stand alone and deny financing for a
mechanism that the U.S. government, U.S. NGO's and the U.S. private
sector actively support. END COMMENT.


PYATT