US embassy cable - 04THEHAGUE856

UNCLAS THE HAGUE 000856 
 
SIPDIS 
 
DEPARTMENT FOR IO/S - ABRAHAMS/JACOBSON, L - BETTAUER, 
L/UNA - KIINGI 
 
E.O. 12958: N/A 
TAGS: ABUD, AFIN, AORC, IBPCA 
SUBJECT: PCA: REQUEST FOR GUIDANCE FOR ADMINISTRATIVE 
COUNCIL MEETING 
 
1. (U) Summary: The Administrative Council of the Permanent 
Court of Arbitration (PCA) will be holding its Spring Meeting 
on Monday, April 19.  Embassy legal officer will represent 
the USG at the Council meeting and seeks guidance from the 
Department with respect to a proposal of the PCA Secretary 
General to deal with the problem of chronic nonpayment of 
assessed contributions.  End summary. 
 
2. (U) On April 19, the PCA's Administrative Council will 
hold its annual Spring Meeting.  The Agenda includes a 
variety of financial and administrative matters (agenda and 
related package/resolution faxed to IO/S - Jacobson and L/UNA 
- Kiingi).  Embassy expects that the Secretary General, Tjaco 
van den Hout, will emphasize the deteriorating financial 
situation of the PCA, notwithstanding the budgetary increase 
approved by the Council last year.  Van den Hout attributes 
the budgetary shortfall "mainly to the weakening US dollar 
and its related impact on income from registry services," as 
a result of which the PCA has instituted a number of 
"austerity measures."  The Council meeting will also consider 
a proposal of the Council President to renew Van den Hout's 
mandate for a period of five years.  Given Van den Hout's 
strong support of and sensitivity toward USG equities in the 
PCA, Embassy representative expects to join a consensus in 
favor of his renewed mandate. 
 
3. (U) The fifth agenda item for the Council meeting 
addresses the issue of chronic failure of some PCA Member 
States to make their assessed contributions.  According to a 
report of the Secretary General, "some 15 percent of the 
organization's regular budget is not realized in 
contributions received during the financial year in which 
they come due, leaving the regular budget chronically 
under-funded.  Moreover," the report continues, "several 
Member States have arrears of more than three years, and the 
amount overdue from previous years of more than 90,000 Euros 
in total represents a significant sum for an organization the 
size of the PCA."  The PCA considered but rejected various 
options undertaken by other international organizations in 
similar positions, including the imposition of interest on 
unpaid dues.  Instead, and more modestly, the PCA is 
proposing that the Council adopt a resolution that would do 
the following: (1) ask the States in arrears to pay owed 
monies on an urgent basis; (2) request the Council President 
to contact governments of Member States that have not paid 
contributions for seven years or more whether they wish to 
remain parties to the relevant Hague Conventions; (3) adopt a 
Regulation that would require Member States in two years or 
more arrears to conclude an amortization schedule with the 
PCA; and (4) should the Member fail to agree to such an 
amortization, it would lose the right to nominate and 
maintain Members of the Court and specialized panels or to 
apply for access to the PCA financial assistance fund.  Such 
"sanctions" could be waived by the Council under certain 
conditions. 
 
4. (U) Guidance request: Embassy believes that the PCA draft 
resolution makes sense as a modest effort to encourage Member 
States in substantial arrears to begin the process of making 
contributions.  While it is by no means assured that such a 
step will in fact result in better payment of assessed 
contributions, the PCA's difficult financial situation 
demands some effort in that direction.  Indeed, an even 
stronger response to chronic nonpayment may be warranted. 
Embassy therefore requests Department concurrence in its 
intention to join the consensus in favor of the subject 
resolution.  End guidance request. 
SOBEL