US embassy cable - 02ROME5491

UNCLAS ROME 005491 
 
SIPDIS 
 
L/PIL FOR HAL BURMAN AND JEFF KOVARS; IO/EDA FOR WINNICK 
IO/S FOR LISA JACOBSON 
 
FROM FODAG 
 
E.O. 12958:  N/A 
TAGS: AORC, ABUD, UNIDROIT 
SUBJECT:  REPORT OF 56TH UNIDROIT FINANCE COMMITTEE 
 
REF:  A) ROME 4415, B) SECSTATE 190770, C) ROME 4389, D) 
 
SECSTATE 196873, E) ROME 04940 
 
1. SUMMARY.  THE 56TH SESSION OF THE INTERNATIONAL 
INSTITUTE FOR THE UNIFICATION OF INTERNATIONAL PRIVATE 
LAW (UNIDROIT) FINANCE COMMITTEE APPROVED A 2003 ORDINARY 
                       UNCLASSIFIED 
 
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BUDGET LEVEL OF EURO 1,802,550.00, A NOMINAL INCREASE OF 
19,673 EUROS OVER THE 2002 LEVEL.  USDEL DID NOT BLOCK 
CONSENSUS BUT STATED THAT THE U.S. POSITION CONTINUED TO 
BE ZERO NOMINAL GROWTH.  THE BUDGET PROPOSAL WILL BE SENT 
TO THE DECEMBER 6, 2002 GENERAL ASSEMBLY FOR FINAL 
APPROVAL.  END SUMMARY. 
 
2.  THE 56TH SESSION OF THE UNIDROIT FINANCE COMMITTEE 
MET ON OCTOBER 22, 2002.  AS REPORTED IN REFTEL E, THE 
55TH SESSION OF THE COMMITTEE HAD BEEN UNABLE TO APPROVE 
A BUDGET DUE TO MEMBER CONCERNS (JAPAN, ITALY, FRANCE, 
SWITZERLAND) ABOUT A LAST-MINUTE INCREASE IN THE BUDGET 
PROPOSAL (TO ALLOW UNIDROIT TO CARRY OUT ITS FUNCTIONS AS 
DEPOSITARY FOR THE RECENTLY CONCLUDED CAPETOWN CONVENTION 
ON INTERNATIONAL INTERESTS IN MOBILE EQUIPMENT) AND THE 
ANNOUNCEMENT OF THE GOVERNMENT OF ITALY THAT IT WAS 
REDUCING ITS CONTRIBUTION. 
 
3.  AS A RESULT, THE SECRETARIAT WAS OBLIGED TO WITHDRAW 
THE PROPOSAL AND REDRAFT THE BUDGET TO TAKE INTO ACCOUNT 
THE LOWER ITALIAN CONTRIBUTION.  AT EURO 1,802,550.00 
(FOR ORDINARY EXPENDITURES) THE RE-DRAFTED BUDGET 
PRESENTED TO THE 56TH SESSION CAME IN SLIGHTLY BELOW THE 
ORIGINAL PROPOSED BUDGET LEVEL (REFTEL A) AND REPRESENTED 
A NOMINAL INCREASE OF ONLY 19,673 EUROS.   (NONETHELESS, 
THE U.S. CONTRIBUTION REMAINS THE SAME (EURO 110,000) AS 
IN THE ORIGINAL BUDGET LEVEL.)  WHILE FUNDING FOR 
SCHOLARSHIPS FOR DEVELOPING COUNTRY RESEARCHERS AND FOR 
CONSULTANTS WAS REDUCED, THE RE-DRAFTED BUDGET DOES NOT 
PROVIDE THE MEANS FOR UNIDROIT TO CARRY OUT THE FUNCTIONS 
OF DEPOSITARY FOR THE CAPETOWN CONVENTION.  IN PRESENTING 
                       UNCLASSIFIED 
 
PAGE 03        ROME  05491  120655Z 
THE RE-DRAFTED BUDGET UNIDROIT SECRETARY GENERAL HERBERT 
KRONKE CALLED THE PROPOSAL ONE "BORN OUT OF DESPAIR" 
WHICH COULD BE TOLERATED FOR ONE YEAR, BUT WHICH, AFTER 
THAT, WOULD BE "UNSUSTAINABLE." 
 
4.  THE FINANCE COMMITTEE APPROVED THE OVERALL BUDGET 
LEVEL.  USDEL STATED THAT, WHILE THE U.S. WOULD NOT BLOCK 
CONSENSUS, THE U.S. POSITION WAS AND REMAINED ZERO 
NOMINAL GROWTH. 
 
5.  IN DISCUSSION OF THE RE-DRAFTED BUDGET, MEXICO, 
FRANCE, GERMANY, SPAIN, SWITZERLAND AND AUSTRIA EXPRESSED 
DIFFICULTIES WITH THE SECRETARIAT'S PROPOSAL TO REDUCE 
"LEGAL ASSISTANCE TO DEVELOPING COUNTRIES" (PRIMARILY 
SCHOLARSHIPS FOR RESEARCH).  USDEL STATED THAT THIS WAS 
AN APPROPRIATE LINE ITEM FROM WHICH TO SEEK SAVINGS, AND 
ENCOURAGED COUNTRIES TO CONSIDER VOLUNTARY CONTRIBUTIONS 
FOR SUCH SCHOLARSHIPS INSTEAD.  AS A RESULT OF THESE 
CONCERNS THE SECRETARIAT WILL JUGGLE SOME OF THE INTERNAL 
LINE ITEMS WITH A VIEW TO PROVIDING MORE FUNDING FOR 
SCHOLARSHIPS WHILE STAYING WITHIN THE APPROVED BUDGET 
ENVELOPE.  THE REVISED PROPOSAL WILL BE SUBMITTED TO THE 
DECEMBER 6 GENERAL ASSEMBLY. 
 
6.  CONCERNING THE DEPOSITARY FUNCTIONS, JAPAN AND 
AUSTRIA ALSO EXPRESSED SUPPORT FOR UNIDROIT CARRYING OUT 
THESE FUNCTIONS, BUT STATED THAT THE PROPOSAL HAD COME IN 
TOO LATE FOR CONSIDERATIONS IN CAPITALS.  THESE COUNTRIES 
SAID THAT THE NEED TO SUPPORT THE DEPOSITARY FUNCTION 
WOULD BE GIVEN MORE SYMPATHETIC CONSIDERATION IN NEXT 
YEAR'S BUDGET PROPOSAL. 
                       UNCLASSIFIED 
 
PAGE 04        ROME  05491  120655Z 
 
7.  THE FINANCE COMMITTEE ACCEPTED THE FINAL 
MODIFICATIONS TO THE BUDGET AND THE APPROVAL OF THE 
ACCOUNTS FOR THE 2001 FINANCIAL YEAR (ALSO OUTSTANDING 
FROM THE 55TH SESSION.)  HALL 
 
                       UNCLASSIFIED 
 
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 2002ROME05491 - Classification: UNCLASSIFIED