US embassy cable - 04THEHAGUE1106

UNCLAS SECTION 01 OF 03 THE HAGUE 001106 
 
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, IT, CWC 
SUBJECT:  CHEMICAL WEAPONS CONVENTION (CWC):  WEEKLY 
WRAP-UP FOR 30 APRIL 2004 
 
 
This is CWC-53-04. 
 
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SPECIAL MAY EC 
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1.  (SBU)  Prior to the April 28 Bureau meeting, Ambassador 
Javits spoke with DG Pfirter, EC Chairman Kubernat (Czech) 
and incoming EC Chairman Arrospide (Peru) to emphasize the 
need for a substantive special EC session in May.  The 
Ambassador highlighted the fact that this is especially 
important so that we can move ahead on Article IV/V and 
amendments to the Working Capital Fund, a point on which the 
DG and Arrospide agreed.  The Ambassador was subsequently 
informed that due to consideration of costs (translators, in 
particular) the decision was reached to have a procedural EC 
session.  We would note that such a session will still allow 
us to make the case on the need for action at the June EC on 
the WCF and also preview the importance of the Libyan and 
Albanian extension requests for consideration in June. 
 
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ARTICLE IV/V 
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2.  (SBU)  Johan Verboom (Netherlands) held an April 29 
consultation on Article IV/V and the Working Capital Fund 
(WCF).  Only a few issues in the draft decision remain under 
serious debate, although they are critical issues.  First and 
foremost, Italy continues to stand alone opposing the 
proposed WCF increase to 9.9 million Euros, which would 
require the cash surpluses from 2001 and from 2002 but 
nothing more.  The Italian delegate had no recommendation on 
another number, and simply reiterated once again Italy's view 
that they are not convinced on the need for a change to the 
existing WCF.  Ambassador Javits intends to raise this with 
the Italian MFA during his May 10 consultations in Rome. 
 
3.  (U)  OPCW Chief of Administration Schulz recommended 
repaying funds taken from the WCF within 24 months rather 
than the current proposal that specified that they be repaid 
by the end of the financial year following the year in which 
the borrowing occurred.  The U.S. and Canada supported having 
that proposal considered in capitals.  Verboom said he would 
include the alternative proposals in the next draft decision 
document.   The U.S., pursuant to a recommendation from 
Washington, suggested that the document should stipulate the 
amount by which the WCF is being increased (difference 
between new total and current level) and exactly the amounts 
coming from the 2001 and 2002 cash surpluses, in the 
interests of clarity.  There was no objection on substantive 
grounds, and the discussion was purely on the correct 
formulation of the 2002 surplus, which has not yet been 
certified.  The facilitator said he would circulate proposed 
language on that point. 
 
4.  (U)  Peter Beerwerth (Germany) proposed adding language 
specifying the beginning of 2005 as the effective date of the 
decision, but eventually agreed to the phrase "as of the date 
the decision is taken by the Conference."  It was not 
entirely clear why the FRG proposed that insertion in this 
particular draft decision document, since there is usually no 
such language specifying the specific point at which a 
decision becomes operative.  In any event, we highlight the 
FRG proposal for Washington's careful consideration as it 
will certainly have an immediate operational impact. 
 
5.  (U)  France, supported by Italy, stressed that States 
Parties need to pay their Article IV/V invoices within 30 
days and asked that this language be included in the text. 
The facilitator noted that this topic was being discussed 
under the financial regulations consultation and requested 
that debate of this topic be done there.  (Note: It is 
increasingly clear that the work on the WCF is becoming 
inextricably linked to the work on financial regulations.  In 
particular, the linkage is with the proposed requirement for 
repayment of Article IV/V invoices within 30 days of 
invoicing.  For many delegations, some type of prompt 
re-payment arrangement or commitment is a necessary 
supplement to agreeing on changes in the WCF.  Washington may 
wish to give prompt and serious consideration to what type of 
time-period or arrangement would be acceptable for payment of 
Article IV/V invoices in order to get the quickest possible 
adoption of the changes to the WCF.) 
 
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FINANCIAL REGULATIONS 
--------------------- 
 
6.  (U) On April 29, facilitator Peter van Brakel (Canada) 
chaired the latest round of consultations on amendments to 
the financial regulations. 
 
7.  (U) On Regulation 6.2, the Delegation made a strong case 
for the use of the term "provisional cash surplus or deficit" 
to replace "provisional cash balance," stressing that the 
former term is more precise.  Van Brakel replied that 
 
1) the ABAF had used the term "cash balance," 
2) delegations wanted to avoid use of the word "surplus" as 
that could lead delegations to try to make a grab for any 
"surplus," and 
3) all other delegations were agreed on the exiting text, and 
U.S. insistence on the language change could lead to a 
re-opening of agreement on this regulation. 
 
In view of the points made by the facilitator, we said that 
the existing language was acceptable. 
 
8.  (U) On Regulation 6.3, we made the point that we could 
not accept the word "arrears" in subparas (a) and (c) and 
suggested use of the word "receipts."  The facilitator and 
Beerwerth said that in this particular sub-regulation, the 
intention is indeed to discuss "arrears" and this is the 
accurate term.  This led to a general discussion of the 
proposed change to Regulation 5.4 (payment of Article IV/V 
invoices), and it was quite clear that the proposal for 6.3 
is linked to 5.4. 
 
9.  (U) On Regulation 5.4, the Delegation stated that it does 
not accept the proposed language that Article IV/V payments 
will be made within 30 days and that the entire issue is 
under consideration in Washington.  The Russian delegation 
made the point that due to the restructuring that affected 
the Russian Munitions Agency, there was still consideration 
in Moscow of whether payment could be made within 30 days or 
whether 60 days would be required.  Russia therefore asked 
for more time to get an official response from Moscow. 
(Note: the Russian delegation subsequently asked about 
Washington's preferred time-period, and we replied that we 
would seek a response.)  Responding to the U.S. reluctance to 
commit to a 30-day requirement for payment of these invoices, 
other delegations highlighted Financial Rule 4.12.01 (e) and 
(f). 
 
(e) states: 
 
"The invoice together with the original list of services 
received and signed by the Team Leader shall be forwarded by 
the State Party to the Technical Secretariat for 
reimbursement within 60 days from the completion date of the 
inspection." 
 
(f) states: 
 
"The invoice, after being checked and certified for 
correctness, shall be paid by the Technical Secretariat not 
later than 30 days after receipt from the State Party." 
 
10.  (U) Schulz made the pitch for payment by possessor 
states for everything that is not in dispute.  Items which 
are under dispute should be separated and clarified, but 
should not prevent payment of items for which there is no 
disagreement.  The FRG noted that the U.S. had made its 
position clear on this issue, but recommended that the 
facilitator make an effort to craft language that might be 
able to address U.S. concerns as well as delegations that 
wanted this particular change.  Van Brakel said he would 
endeavor to do so. 
 
11.  (U) On Regulation 2.2, Delegation noted that the U.S. 
could not accept the proposed definition of "provisional cash 
balance" and the facilitator ultimately decided to remove the 
proposed definition.  However, on the proposed new language 
on "contributions," the Delegation noted the U.S. objection 
and emphasized that the change in the definition could have 
an impact on other financial regulations which are not under 
consideration.  The facilitator said he appreciated the point 
of avoiding unintended consequences from a new definition, 
and asked the U.S. to cite areas where such a change in 
definition has had such an impact, or cite areas where the 
new definition of "contribution" will have such an impact. 
Brazil stated that it wanted to avoid definitions applicable 
only to specific regulations or parts of regulations.  Johan 
Verboom (Netherlands) raised the point that 2.2 was connected 
to the efforts under way regarding 5.1, 6.2 and 6.3. 
 
12.  (U) On Regulation 3.7, there was no objection to the 
proposed amendment. 
 
13.  (U) On Regulation 4.7, there was no objection to the 
proposed amendment. 
 
14.  (U)  Javits sends. 
RUSSEL