UNIDROIT - Report General Assambly 2017

EN GENERAL ASSEMBLY UNIDROIT 2017 76th session A.G. (76) 10

Rome, 7 December 2017 Original: English/French December 2017

REPORT

(prepared by the UNIDROIT Secretariat)

Summary For the information of the members of the General Assembly Action to be taken None Related documents None

Contents

Opening of the session by the Secretary-General a.i. and the Chairman of the General Assembly 2016–2017 3

Election of the Chairman of the General Assembly 2017–2018 4

Adoption of the agenda 4

Statement regarding the Organisation’s activity in 2017 4

Report of the Finance Committee on its 83rd session and reappointment of the members of the Finance Committee 6

Final modifications to the Budget and approval of the Accounts for the 2016 financial year 8

Adjustments to the Budget for the 2017 financial year 8

Arrears in contributions of member States 9

Classification of member States in the UNIDROIT Contributions Chart 10

Review of the compensation and social security package offered to UNIDROIT staff 11

Approval of the draft Budget for 2018 and fixing of the contributions of member States for that financial year 15

Financial situation of inactive member States 152. U NIDROIT 2017 – A.G. (76) 10 Any other business 16

APPENDIX I: List of participants 18

APPENDIX II: Agenda 23UNIDROIT 2017 – A.G. (76) 10 3.

Item No. 1: Opening of the session by the Secretary-General a.i. and the Chairman of the General Assembly 2016–2017 (A.G. (76) 1 rev. 2)

1. The 76th session of the General Assembly of the International Institute for the Unification of

Item No. 1: Opening of the session by the Secretary-General a.i. and the Chairman of the General Assembly 2016–2017 (A.G. (76) 1 rev. 2)

1. The 76th session of the General Assembly of the International Institute for the Unification of Private Law (UNIDROIT) was held at the seat of UNIDROIT on 7 December 2017. A list of the diplomatic representatives in attendance is included in Appendix I.

2. The Chairman of the General Assembly 2016-2017, H.E. Mr Antonio de Aguiar Patriota, Ambassador of Brazil in Italy, welcomed participants and proceeded to open the session. He then invited Professor Anna Veneziano, the Secretary-General ad interim, to take the floor.

3. The Secretary-General a.i. welcomed participants to the session as well. She recalled that the session would have been attended by the former Secretary-General, Mr José Angelo Estrella Faria, who had had to leave UNIDROIT at the end of July 2017. She thanked all of the representatives for their continued support and trust, recognised the efforts and dedication of UNIDROIT’s staff during the interim period and expressed gratitude to the Chairman of the General Assembly 2016-2017 for having served and supported UNIDROIT’s activities.

4. The Chairman of the General Assembly 2016-2017 then thanked all the representatives and participants who were present at the session for the confidence that they had placed in his country and in him. He recalled that Brazil had been participating in UNIDROIT since its creation, having been one of two Latin American countries represented at UNIDROIT’s opening session in 1926. Brazil’s participation in UNIDROIT had significantly contributed to the evolution of legal sciences in Brazil, and several studies on private international law were the outcome of discussions held at UNIDROIT. Brazil’s participation at in UNIDROIT had also supported discussions on various commercial and private international law issues that were highly relevant to economic and social development.

in UNIDROIT had significantly contributed to the evolution of legal sciences in Brazil, and several studies on private international law were the outcome of discussions held at UNIDROIT. Brazil’s participation at in UNIDROIT had also supported discussions on various commercial and private international law issues that were highly relevant to economic and social development.

5. The Chairman then recalled how, upon his appointment at the 75th session (Rome, 1 December 2016), he had expressed Brazil’s full support for the United Nations’ 2030 Agenda, including for Sustainable Development Goal 16 with respect to the promotion of peaceful and inclusive societies for sustainable development, providing access to justice for all and building accountable and effective institutions at all levels. UNIDROIT had continued in 2017 to support the achievement of that Goal, as well as other Sustainable Development Goals, through its projects in various areas, such as: (a) those in the area of agricultural development, including the Secretariat’s ongoing promotion of the UNIDROITFAO-IFAD Legal Guide on Contract Farming and the preparation, by a UNIDROIT Working Group in collaboration with FAO and IFAD, of an international instrument on agricultural land investment contracts, both of which were supportive of food security and responsible agricultural investment; (b) the continued expansion of the system established by the Cape Town Convention and its related Protocols, including the two sessions of the Committee of Governmental Experts for the preparation of a preliminary draft Protocol on matters specific to Mining, Agricultural and Construction Equipment, which had successfully concluded that the preliminary draft Protocol was sufficiently advanced to recommend to the UNIDROIT Governing Council that a diplomatic Conference be convened to finalise and adopt the Protocol; (c) the adoption of the UNIDROIT Legislative Guide on Intermediated Securities, which promised enhanced legal certainty in this very significant area of economic activity and for which Brazil had served as a Co-Chair of the Committee on Emerging Markets Issues, Follow-up and Implementation together with China; and (d) the ongoing work in the area of cultural property, including promotion of UNIDROIT’s Cultural Property Convention, which established a critical framework

Brazil had served as a Co-Chair of the Committee on Emerging Markets Issues, Follow-up and Implementation together with China; and (d) the ongoing work in the area of cultural property, including promotion of UNIDROIT’s Cultural Property Convention, which established a critical framework for the return of stolen or illegally exported cultural objects and which had attracted four additional accessions in 2017. The Chairman then thanked the members of the General Assembly for their ongoing support for UNIDROIT and acknowledged the efforts of the former Secretary-General, Mr José Angelo Estrella Faria, who successfully led UNIDROIT for roughly nine years and had worked to modernise it, including with respect to the important compensation and social security reforms for UNIDROIT’s staff that were under consideration during the session. He concluded by acknowledging (a) the support that he had received from UNIDROIT’s staff, in particular the Secretary-General a.i., and (b) the presence of4. U NIDROIT 2017 – A.G. (76) 10 Professor George Galindo, Legal Counselor of the Brazilian Ministry of External Relations, who was in attendance at the session.

Item No. 2: Election of the Chairman of the General Assembly 2017–2018 (A.G. (76) 1 rev. 2)

6. The Chairman of the General Assembly 2016-2017 noted that the Chairmanship of the General Assembly had traditionally rotated among the four geographic regions of UNIDROIT and that, according to that practice, it was now the turn of the Asia-Pacific group to nominate the new Chair for the period 2017-2018. He then opened the floor for nominations.

7. Upon nomination by the representative of Japan, the General Assembly, by acclamation, appointed H.E. Ms Esti Andayani, the Ambassador of Indonesia in Italy, as the Chairperson of the

General Assembly 2017-2018.

8. The Chairperson of the General Assembly 2017-2018 thanked all of the representatives for their support and noted that she was honoured to serve as Chairperson and to lead the discussions on

General Assembly 2017-2018.

8. The Chairperson of the General Assembly 2017-2018 thanked all of the representatives for their support and noted that she was honoured to serve as Chairperson and to lead the discussions on many important aspects of UNIDROIT’s work. She also thanked the Government of Japan for the nomination and the former Chairman of the General Assembly for his able leadership and UNIDROIT’s achievements during his tenure. The year had been a significant one for UNIDROIT, both substantively and in the area of institutional development, and 2018 was fast approaching. It was a common responsibility to continue the hard work together. Regarding substantive projects, there was important work ahead in the areas of agricultural development, including with respect to: (a) the UNIDROIT-FAOIFAD Legal Guide on Contract Farming, which was recently promoted at an event in Jakarta; (b) the work on a future instrument on agricultural land investment contracts; and (c) the development of the preliminary draft Protocol to the Cape Town Convention on matters specific to Mining, Agricultural and Construction Equipment. Regarding institutional development, there were significant issues to address, including: (a) the establishment of a new Classification Chart regarding member States’ contributions to UNIDROIT; (b) the review of the compensation and social security package offered to UNIDROIT staff, which promised to address important staff management and mobility concerns; and (c) the request of the Government of Iraq to reactivate its membership in UNIDROIT, which could helpfully expand UNIDROIT’s reach, its instruments and its expertise within that State and in its region. In concluding, she requested all representatives’ support for working through the issues before the General Assembly.

Item No. 3: Adoption of the agenda (A.G. (76) 1 rev. 2)

9. The General Assembly adopted the agenda as proposed (see Appendix II).

Item No. 4: Statement regarding the Organisation’s activity in 2017 (A.G. (76) 2 rev.)

9. The General Assembly adopted the agenda as proposed (see Appendix II).

Item No. 4: Statement regarding the Organisation’s activity in 2017 (A.G. (76) 2 rev.)

10. The Chairperson introduced the item and invited the Secretary-General a.i. to present the Statement regarding the Organisation’s activity in 2017.

11. The Secretary-General a.i. presented document A.G. (76) 2 rev., noting that it followed UNIDROIT’s practice of providing an overview of the Secretariat’s activities and the Work Programme, and she highlighted various activities. First, for UNIDROIT’s work on Transactions on Transnational and Connected Capital Markets, the UNIDROIT Governing Council, during its 96th session (Rome, 10-12 May 2017), adopted the UNIDROIT Legislative Guide on Intermediated Securities (Legislative Guide) and authorised the Secretariat to promote its dissemination and implementation. The Legislative Guide was the end result of a process overseen by the Committee on Emerging Markets Issues, Follow-Up and Implementation which had been established at the final session of the diplomatic Conference to adoptUNIDROIT 2017 – A.G. (76) 10 5. a Convention on Substantive Rules regarding Intermediated Securities (Geneva, 5-9 October 2009).

The fourth and final meeting of the Committee was held in Beijing on 29-30 March 2017 at the kind invitation of the China Securities Regulatory Commission, who hosted jointly with the China Securities Depository and Clearing Corporation Ltd. The meeting commenced with a Colloquium on Financial Markets Law during which various legal issues arising from securities holding systems were discussed. On the second day, the Committee reviewed the draft Legislative Guide – which had been prepared by the informal group of experts chaired by Professor Hideki Kanda, member of the UNIDROIT Governing Council, with the assistance of the UNIDROIT Secretariat – and recommended that the Legislative Guide be adopted. Since its adoption by the UNIDROIT Governing Council, the Legislative Guide was published,

the informal group of experts chaired by Professor Hideki Kanda, member of the UNIDROIT Governing Council, with the assistance of the UNIDROIT Secretariat – and recommended that the Legislative Guide be adopted. Since its adoption by the UNIDROIT Governing Council, the Legislative Guide was published, both online and in print, in English and French and would be published in Chinese and Spanish soon. In addition, immediately following the General Assembly’s session, a panel would be held to celebrate the launch of the Legislative Guide and to provide an overview on it and related implementation efforts.

12. Second, regarding UNIDROIT’s work on secured transactions, the Secretary-General a.i. drew attention to the preliminary draft Protocol to the Cape Town Convention on international interests on Mobile Equipment on matters specific to Mining, Agricultural and Construction Equipment (MAC Protocol). The Study Group entrusted with preparing the first draft of the MAC Protocol had met four times from 2014 to 2016 and had developed – in consultation with observers from various international organisations and academic institutions – a preliminary draft text, which was approved for submission to a Committee of Governmental Experts by the UNIDROIT Governing Council at its 95th session (Rome, 18-20 May 2016). The Committee of Governmental Experts met twice in 2017, and both sessions were very well attended by representatives of UNIDROIT member States and non-member States, regional and intergovernmental organisations and international non-governmental organisations. The majority of the text proposed by the Study Group was adopted by the Committee at its first session (Rome, 2024 March 2017), with some debated issues left open, in particular relating to: (a) the scope of the Protocol; (b) the issue of interests arising out of the association of MAC equipment with immovable property; and (c) the amendment procedure for the Protocol. Intensive intersessional work followed, in particular with regard to the registration criteria, and the Secretariat also commissioned – as requested by the Committee – a team of economists to conduct an economic impact analysis on the

property; and (c) the amendment procedure for the Protocol. Intensive intersessional work followed, in particular with regard to the registration criteria, and the Secretariat also commissioned – as requested by the Committee – a team of economists to conduct an economic impact analysis on the MAC Protocol. At the second session (Rome, 2-6 October 2017), the Committee of Governmental Experts further refined the draft MAC Protocol, ultimately adopted it and recommended the UNIDROIT Governing Council, at its 97th session (Rome, 2-4 May 2018), to authorise the convening of a diplomatic Conference to conclude the MAC Protocol.

13. Third, regarding the other Protocols to the Cape Town Convention, the Secretary-General a.i. reported on developments concerning the Luxembourg Rail Protocol, which had been signed in 2017 by France and Sweden, while Gabon became the second Contracting State to the Protocol by acceding to it. Work towards ratification of the Rail Protocol was underway in other States as well. With respect to the Space Protocol, the fifth session of the Preparatory Commission (Rome, 6 December 2017) had been held on the prior day, and that session covered further matters relating to the selection of the Registrar and the appointment of a Supervisory Authority, as well as activities for promoting signature and ratification. The Secretary-General a.i. then recognised the representatives of the International Telecommunications Union who were in attendance and pointed out that, following the session, there would be an informational event concerning developments with respect to the space sector and the

Space Protocol.

14. Fourth, the Secretary-General a.i. discussed three other priority projects for which significant progress had been made. With respect to the preparation of an international guidance document on agricultural land investment contracts, she explained that a Working Group on agricultural land investment contracts – which was chaired by Mr José Antonio Moreno Rodríguez, a member of the UNIDROIT Governing Council – had been constituted and had held two meetings in 2017 (Rome, 3-5

agricultural land investment contracts, she explained that a Working Group on agricultural land investment contracts – which was chaired by Mr José Antonio Moreno Rodríguez, a member of the UNIDROIT Governing Council – had been constituted and had held two meetings in 2017 (Rome, 3-5 May 2017; 13-15 September 2017), and that the Secretariat had held an informal meeting in Rome on 11 October 2017 during the Committee on World Food Security’s 44th plenary session in collaboration with the Food and Agriculture Organization (FAO) and the International Fund for Agricultural6. U NIDROIT 2017 – A.G. (76) 10 Development (IFAD). She then discussed the composition of the Working Group, provided an overview on its work and referred to the Working Group’s planned third meeting (Rome, 25-27 April 2018).

15. With respect to the joint ELI/UNIDROIT project for the development of regional rules of European civil procedure based on the ALI/UNIDROIT Principles of Transnational Civil Procedure, she highlighted that the Steering Committee, Co-Reporters and members of the Working Groups had held its third joint meeting (Rome, 5-7 April 2017), at which issues pertaining to the finalisation of the consolidated drafts by the first three Working Groups were discussed, in particular on access to information and evidence, provisional and protective measures, and service of documents and due notice of proceedings. The consolidated draft of the work was presented at the UNIDROIT Governing Council’s 96th session (Rome, 10-12 May 2017), during which the work received positive feedback. Since then, the second Steering Committee and Co-Reporters meeting was held (Vienna, 16-17 November 2017) at the kind invitation of the European Law Institute (ELI), during which the structure of the rules as well as the progress reports of the other Working Groups were discussed.

16. With respect to the preparation of a guidance document on existing texts in the area of international sales law in co-operation with UNCITRAL and the Hague Conference on Private

of the European Law Institute (ELI), during which the structure of the rules as well as the progress reports of the other Working Groups were discussed.

16. With respect to the preparation of a guidance document on existing texts in the area of international sales law in co-operation with UNCITRAL and the Hague Conference on Private International Law, the Secretary-General a.i. provided background on the project and noted that the three Secretariats had invited five renowned experts in private international law and contract law from different legal traditions and geographic regions to contribute, in a personal capacity, to the preparation of a legal guide. She further noted that the Secretariats had agreed on a tentative outline, which was reviewed by the group of experts via teleconferences, as well as at a coordination meeting (Frankfurt, 25 October 2017) kindly hosted by Professor Stefan Vogenauer.

17. Fifth, the Secretary-General a.i. briefly discussed UNIDROIT’s lower priority projects, noting advances with respect to the work on Principles of Reinsurance Contract Law and on Private Art Collections. For further detail, she referred to document A.G. (76) 2 rev., which also contained information on the financial implications of the various activities – including with respect to promotional and non-legislative activities – in Annex I and on extra-budgetary contributions and their use in

Annex II.

18. The representative of Italy thanked UNIDROIT for the challenging and stimulating activities that it carried forward year after year and expressed appreciation for the work of the former SecretaryGeneral, the Secretary-General a.i. and UNIDROIT’s staff, as well as for the concrete results that they had achieved. He praised, in particular, the recently adopted UNIDROIT Legislative Guide on Intermediated Securities, which was simultaneously highly technical yet able to address, in a simple way, the modernisation of financial markets, including for those States with less developed legal environments. From this effort, it was possible to see how the rule of law could be at the service of innovation and sustainable development. Italy had contributed to the Legislative Guide and hoped that it would be able to continue contributing to projects of such high quality and policy relevance.

environments. From this effort, it was possible to see how the rule of law could be at the service of innovation and sustainable development. Italy had contributed to the Legislative Guide and hoped that it would be able to continue contributing to projects of such high quality and policy relevance.

19. The General Assembly took note of the Statement regarding the Organisation’s activity in 2017.

Item No. 5: Report of the Finance Committee on its 83rd session (F.C. (83) 9) and reappointment of the members of the Finance Committee (A.G. (76) 1 rev. 2)

20. The Chairperson noted that this item had two sub-items: (a) the Report of the Finance Committee on its 83rd session (Rome, 21 September 2017) and (b) the reappointment of the members of the Finance Committee. With respect to the first sub-item, the Chairperson invited the Chair of the Finance Committee, Mr Benito Jiménez Sauma, a representative of Mexico, to present the Report of the Finance Committee on its 83rd session.UNIDROIT 2017 – A.G. (76) 10 7.

21. The Chair of the Finance Committee noted that, as one could see from the agenda, the Finance Committee had dealt with many significant items over the past year. Since the General Assembly’s 75th session (Rome, 1 December 2016), the Finance Committee had met three times, including an additional session in the summer to deliberate further on the reviews of the Classifications Chart and the compensation and social security package offered to UNIDROIT staff.

22. In noting that the level of work was unusual, he thanked the members of the Finance Committee for their hard work and proceeded to describe the Finance Committee’s recommendations on the various items. With respect to the final modifications to the Budget and Accounts for the 2016 financial year and the adjustments to the Budget and Accounts for the 2017 financial year, the Finance Committee reviewed those documents and recommended that the General Assembly approve them.

on the various items. With respect to the final modifications to the Budget and Accounts for the 2016 financial year and the adjustments to the Budget and Accounts for the 2017 financial year, the Finance Committee reviewed those documents and recommended that the General Assembly approve them. For the 2017 financial year in particular, there was a small shortfall in receipts – due to arrears in some member States’ contributions – that the Secretariat was aiming to address with a reduction of expenditures for that same year. With respect to extra-budgetary contributions and the status of arrears, the Finance Committee reviewed those documents as well, took note of them and asked that they also be submitted to the General Assembly. With respect to the Classifications Chart, the Finance Committee considered the existing methodology for that Chart, as well as a reformed one, in which new Categories were added to address the gap between Categories I and II and to reduce the burden for States with smaller economies. Ultimately, the Finance Committee recommended that: (a) the current Contributions Chart should remain in place in 2018, so that member States’ contributions would remain the same in 2018 as they were in 2017; and (b) the reformed Contributions Chart should be considered for adoption by the General Assembly, make use of the UN scale of assessments for 20192021 and come into effect in 2019. With respect to the compensation and social security package offered to UNIDROIT staff, the Finance Committee – following reviews of the various reports received from expert consultants – recommended that (a) UNIDROIT staff be transitioned to the United Nations salary scales as set forth in the report annexed to document F.C. (81) 5, together with a call for preparing job descriptions; (b) the pension scheme be established as set forth in the report annexed to document F.C. (81) 6 rev.; and (c) that health and life insurance be procured, recommending in particular the Allianz “Silver” quotation, which was found in Appendix II to that latter document. With these reforms, which were to be budget neutral and would represent the conclusion of a lengthy review

to document F.C. (81) 6 rev.; and (c) that health and life insurance be procured, recommending in particular the Allianz “Silver” quotation, which was found in Appendix II to that latter document. With these reforms, which were to be budget neutral and would represent the conclusion of a lengthy review process beginning in 2013, the Finance Committee believed that a more fair, transparent and easy to manage system would be put in place, and that that system would address staff mobility concerns. With respect to the Iraqi Government’s request to resume its participation in UNIDROIT subject to cancellation of its arrears and payment of its contributions going forward, the Finance Committee considered similar situations in the past and ultimately recommended that Iraq’s request be approved, with a view to Iraq resuming its participation in UNIDROIT as of 2018. Lastly, with respect to the draft Budget for the 2018 financial year, the members of the Finance Committee welcomed that it was, as in previous years, a zero-growth budget. It would remain zero-growth even if the recommended compensation and social security reforms were to be adopted, because any slight changes in costs could be accommodated under the various chapters of that Budget. Following its review, the Finance Committee recommended the adoption of the draft Budget for the 2018 financial year.

23. The General Assembly took note of the Report of the Finance Committee’s 83rd session (Rome, 21 September 2017).

24. The Chairperson then invited the Secretary-General a.i. to present the background, practices and procedure for the appointment of the members of the Finance Committee.

25. The Secretary-General a.i. recalled that the Finance Committee performed a number of important functions, including: (a) reviewing and advising on the preparation of the budget and modifications to it; (b) the assessment of contributions to member States; and (c) determination of the manner in which the Institute’s property and assets were handled. The UNIDROIT Regulations did not set forth the composition and method of appointment of the Finance Committee, however the

modifications to it; (b) the assessment of contributions to member States; and (c) determination of the manner in which the Institute’s property and assets were handled. The UNIDROIT Regulations did not set forth the composition and method of appointment of the Finance Committee, however the practice of the General Assembly had been to appoint, for three years, a limited number of States –8. U NIDROIT 2017 – A.G. (76) 10 historically 15 members though there were currently 18 members – so as not to burden the Committee’s functions and to renew current members unless they did not wish to be renewed. The current members – which were appointed by the General Assembly at its 73rd session (Rome, 11 December 2014) – had been contacted consistent with past practice to determine whether they would wish to continue serving on the Finance Committee. In response, Austria and Romania had indicated that they did not intend to continue serving but renewed their support for UNIDROIT’s work. There had also been an expression of interest on the part of Indonesia to be more involved in UNIDROIT’s activities, in response to which the Secretariat had proposed that Indonesia might wish to consider serving on the Finance Committee. As Indonesia had accepted that proposal, the Secretariat accordingly proposed that the following States be appointed to the Finance Committee, for three years commencing on 1 January 2018: Brazil, Canada, China, France, Germany, India, Indonesia, Iran, Italy, Japan, Mexico, Republic of Korea, Russian Federation, Spain, Switzerland, the United Kingdom and the United States of America.

26. The Chairperson expressed her wish that the General Assembly would accept Indonesia’s proposed membership in the Finance Committee.

27. The General Assembly approved the proposed appointments for the Finance Committee for three years commencing 1 January 2018.

Item No. 6: Final modifications to the Budget and approval of the Accounts for the 2016 financial year (A.G. (76) 3 rev.)

28. The Chairperson introduced the item and invited the Secretary-General a.i. to present it.

three years commencing 1 January 2018.

Item No. 6: Final modifications to the Budget and approval of the Accounts for the 2016 financial year (A.G. (76) 3 rev.)

28. The Chairperson introduced the item and invited the Secretary-General a.i. to present it.

29. The Secretary-General a.i. recalled that, as a matter of procedure, the Finance Committee had twice reviewed the Accounts of Receipts and Expenditure for the 2016 financial year, first at its 81st session (Rome, 6 April 2017) and then at its 83rd session (Rome, 21 September 2017). To summarise, as set out in paragraph 2 and the chart in paragraph 6 of document A.G. (76) 3 rev., the 2016 financial year was closed with a negative balance of 2.150,31€. This was not because of excess spending by the Secretariat, but was the result of a shortfall in member States’ contributions. This shortfall had been anticipated, and there was no request for supplementary fundin