US embassy cable - 05ROME1365

UNCLAS ROME 001365 
 
SIPDIS 
 
 
FROM THE U.S. MISSION TO THE UN AGENCIES IN ROME 
 
L/PIL FOR HAL BURMAN AND JEFF KOVAR 
IO/S FOR LISA SPRATT 
 
E.O. 12958: N/A 
TAGS: AORC, ABUD, UNIDROIT 
SUBJECT: MEETING OF UNIDROIT SUB-FINANCE COMMITTEE 
 
REF: STATE 65357 
 
1. Summary: the sub-Finance Committee of the 
International Institute for the Unification of Private 
Law (UNIDROIT) met on April 11 to consider the first 
estimates for the organization's 2006 budget.  Although a 
majority of participants favorably viewed the draft 
budget proposal of 2.03 million (a 2.4 percent increase 
over 2005, but with only a 1.25 percent increase in 
member states contributions), there was no clear 
consensus and several countries, including the U.S., did 
not join the majority.  Further discussion will take 
place at the meeting of the full Finance Committee, 
scheduled for October.  End Summary. 
 
2. U.S. Mission rep attended the April 11 meeting.  Per 
ref guidance, rep made the following points: while we 
value the organization's work, our policy for 
international organizations remains zero nominal growth. 
While we can abide a small increase as a one-time 
exception to ZNG policy in recognition of the 
organization's high priority work, we cannot join 
consensus on any increase over the current inflation rate 
for Italy (2.1 percent) and must continue to urge the 
organization to exercise maximum budget discipline.  Rep 
also made inquiries regarding staff salary increases as 
well as the 5,000-euro line item covering investments in 
IT infrastructure. 
 
3. Regarding staff salaries, UNIDROIT policy mirrors the 
increases given by the OECD and also includes the legally 
required Italian inflation increase.  However, the OECD 
increase is effectively halved per the organization's 
practice of delaying its effective date to July 1 of each 
year.  Regarding the investment in IT infrastructure, the 
SYG reported that the total needed to bring the 
organization's hardware and software up to 'minimal' 
standards is between 15,000 and 20,000 euro, spread out 
over the next three to four years.  The 5,000 euro figure 
for 2006 is the first tranche of that three to four year 
investment. 
 
4. It was clear from the secretariat's explanation that a 
budget increase of 2.42 percent would preclude the 
organization from carrying out many of the 
recommendations included in its strategic plan.  It will 
also require UNIDROIT to fill the Deputy Secretary 
General position from within.  Debate ensued regarding 
the future direction of the organization and whether the 
program of work should dictate the budget or whether it 
should function the other way around.  Noted was the 
clear disconnect between committee members who represent 
their governments in calling for budget discipline and 
Governing Council members who participate in their own 
capacity and approve the program of work.  The 
secretariat was requested to make this point to the GC 
 
SIPDIS 
during its meetings this week. 
 
5. Germany, Canada and the UK (in absentia) joined the 
U.S. in seeking additional clarity regarding the budget 
proposal and in disassociating from consensus on the 2006 
draft.  Other participants included Italy, Russia, Japan, 
Switzerland, France and Spain. 
 
HALL 
 
 
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 2005ROME01365 - Classification: UNCLASSIFIED