Kiri

Reference number : 70.46

ESTONIA: 1 UNIT

Due Paid Balance Due

Assessed contribution for Financial Year 2024/2025 (FY 70)

€ 8,258.36 per unit 8,258.36 - 8,258.36

TOTAL 8,258.36 - 8,258.36

TOTAL to pay € 8,258.36

Kindly please be advised that this invoice replaces all previous ones and that payment to the HCCH should be made by bank transfer

(cheques are not accepted).

Payment should be made to:

ABN AMRO MeesPierson, P.O.Box 283, 1000 EA Amsterdam, The Netherlands

International Bank Account Number (IBAN): NL04ABNA0555299783

BIC (Swift): ABNANL2A

Name account holder: Conférence de La Haye de droit international privé

Please quote reference number 70.46 with your payment

Invoice of Assessed Contributions (FY 70)

July 2024

Hague Conference on Private International Law www.hcch.net

Conférence de La Haye de droit international privé [email protected]

Conferencia de La Haya de Derecho Internacional Privado The Hague | Buenos Aires | Hong Kong SAR

Hague Conference on Private International Law Conférence de La Haye de droit international privé Conferencia de La Haya de Derecho Internacional Privado

www.hcch.net

[email protected] The Hague | Buenos Aires | Hong Kong SAR

BUDGET AND EXPLANATORY NOTES

FOR FINANCIAL YEAR 1 JULY 2024 – 30 JUNE 2025 (FY 70)

document drawn up following the meeting of the Council of Diplomatic Representatives on 21 May 2024

* * *

Distributed by the Permanent Bureau on 25 June 2024

Table of Contents I. Introduction ............................................................................................................................................ 1

II. A challenging background...................................................................................................................... 2

A. Phase two of costs relating to the implementation of Spanish as an additional official language as of 1 July 2024 ......................................................................................................... 4

1. New costs for translation .................................................................................................. 4

2. New costs for interpretation.............................................................................................. 4

B. Meetings and their format ........................................................................................................... 4

1. The meetings...................................................................................................................... 4

2. Format of meetings and interpretation ............................................................................ 5

3. Meeting costs reflected in the Budget ............................................................................. 5

a. SC meeting 2024 .................................................................................................... 5

b. CGAP and CDR meetings 2025 .............................................................................. 5

C. Rental costs PB premises – End of 11-year rental contract ..................................................... 6

D. Other factors ................................................................................................................................. 7

1. Increases ............................................................................................................................ 7

2. Reserve Funds & Revolving Fund ..................................................................................... 7

3. Cuts and economies .......................................................................................................... 8

4. Use of Operational Surplus from FY 2022-2023 ............................................................. 8

5. Reimbursement iSupport / eCODEX................................................................................. 9

6. Additional units .................................................................................................................. 9

E. Overall results .............................................................................................................................. 9

III. The approved Budget for FY 2024-2025............................................................................................ 10

IV. Comments on Articles of the approved Budget for FY 2024-2025 .................................................. 15

A. Expenses .................................................................................................................................... 15

1. Operation of the PB ......................................................................................................... 15

a. Article 1, Personnel ............................................................................................... 15

b. Article 2, Office space and operation ................................................................... 17

c. Article 3, IT ............................................................................................................. 18

d. Article 4, Copying, printing and publications ....................................................... 19

e. Article 5, Library ..................................................................................................... 19

f. External translations ............................................................................................. 19

g. Article 7, PB missions ............................................................................................ 20

h. Article 8, Financial operation ................................................................................ 20

i. Article 9, Representation (incl. for international meetings) ................................ 20

j. Article 10, Overhead reimbursement iSupport and eCODEX.............................. 21

k. Article 11, Unforeseen .......................................................................................... 21

2. Meetings ........................................................................................................................... 21

a. Article 12, Off-site meetings (Hague Academy) ................................................... 22

b. Article 14, Other costs relating to HCCH meetings ............................................. 24

3. Present and future pension liabilities ............................................................................ 25

a. Article 15, Retirement or survivors’ pensions ..................................................... 25

b. Article 16, Pension administration by the ISRP ................................................... 25

B. Revenues .................................................................................................................................... 25

1. Article 17, Contribution of Member States .................................................................... 25

2. Article 18, Allocation of reserves from FY 2022-2023.................................................. 26

3. Article 19, Contribution of Member Organisation .......................................................... 26

4. Article 20, Income derived from sales of publications .................................................. 26

C. VCs for the implementation of Spanish .................................................................................... 26

1. Article 21a, VC for Spanish translations in FY 2023-2024 ........................................... 26

2. Article 21b, VC for Spanish interpretation in FY 2024-2025 ........................................ 26

D. Other VCs .................................................................................................................................... 27

1. Article 22a, VC from Members ........................................................................................ 27

2. Article 22b, VCs from non-Members............................................................................... 27

E. Accrued unfunded pension liabilities (Art. 23) ......................................................................... 27

F. Explanation of contributions to be paid by Member States: Overview I and Overview II ...... 27

Annex I – Fund Overview and Projections ..................................................................................................... 30

Annex II – Overview of the costs relating to the implementation of Spanish as an Official Language over the next three FYs (as presented in Annex II of the approved Budget for FY 2023-2024) ............. 33

Budget and Explanatory Notes for Financial Year 1 July 2024 – 30 June 2025 (FY 70)

I. Introduction 1 The Council of Diplomatic Representatives (CDR) met on 21 May 2024 to discuss, amongst other

financial matters, Draft Budget 3 for Financial Year (FY) 2024-2025, submitted by the Secretary General (SG) on 15 April 2024.1 During the meeting, CDR approved the Budget for FY 2024-2025 as presented in Draft Budget 3 by consensus, in accordance with Article 8(2), first sentence, of the 2016 Regulations on Financial Matters and Budgetary Practices of the HCCH (Fin. Regs).

2 The approved Budget for FY 2024-2025 builds on Draft Budget 1 of January 2024,2 and Draft Budget 2 of April 2024.3 It also reflects the outcome of earlier discussions during the meeting of the Standing Committee (StC) held in February and April 2024, as well as the decisions taken by Council on General Affairs and Policy (CGAP) at its 2024 meeting. These decisions relate in particular to the Special Commission (SC) meeting to take place in FY 2024-2025 and its format, the format of the 2025 meeting of CDR, the Work Programme of the HCCH in general, and the adoption of Spanish as an additional official language of the HCCH as of 1 July 2024.4

3 As announced by the SG during the CDR, CGAP, and StC meetings, the Permanent Bureau (PB) has done its best to identify further cuts and savings, and to present as realistic a Budget as possible. The Budget for FY 2024-2025 also reflects the consideration given to the question as to which costs are “avoidable” and without legal risk to the Organisation or impact on the effective, basic operation of the PB. While these cuts and savings will have an impact on the operation of the PB, they are nonetheless been made to lower the overall increase of the budget.

4 Against this background, the main changes since Draft Budget 1, include:

- the lowering of costs for social benefits and insurances (see para. 41);

- the further lowering of costs for PB missions (see para. 75);

- the lowering of costs for bank fees (see para. 77);

- the inclusion of € 34,000 in the Budget for FY 2024-2025 as the contribution to the Budget from the iSupport / e-CODEX grants (compared to € 29,000 in Draft Budget 2 and compared to € 40,000 in Draft Budget 1 (see para. 31);

- the lowering of costs for interpretation at the SC meeting on the practical operation of the 1965 Service, 1970 Evidence, and 1980 Access to Justice Conventions in July 2024; the SG noted the possibility for this cost saving during the StC meeting in April 2024, and since then a further small reduction is now envisaged (see paras 12 and 15);

1 Draft Budget 3 and Explanatory Notes for Financial Year 1 July 2024 – 30 June 2025 (FY 70) of April 2024, available on

the Secure Portal of the HCCH website at www.hcch.net under “Governance” then “Council of Diplomatic Representatives”.

2 Draft Budget 1 and Explanatory Notes for Financial Year 1 July 2024 – 30 June 2025 (FY 70) of January 2024, available on the Secure Portal of the HCCH website at www.hcch.net under “Governance” then “Council of Diplomatic Representatives”.

3 Draft Budget 2 and Explanatory Notes for Financial Year 1 July 2024 – 30 June 2025 (FY 70) of April 2024, available on the Secure Portal of the HCCH website at www.hcch.net under “Governance” then “Council of Diplomatic Representatives”.

4 The introduction of Spanish in two phases was planned and approved by both CGAP and CDR in 2023. First, through the acquisition of translation software, adjustments to staff positions, the inclusion of funds for external translations, and adjusted printing costs (all had to be reflected in the Budget for FY 2023-2024); secondly, through the introduction of Spanish online interpretation, and the hiring of Spanish speaking Recording Secretaries for meetings (foreseen in the Budget for FY 2024-2025). See also Annex II.

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- a further deferral of the proposal to transfer the iSupport position to the Budget (now possibly envisaged to take place in July 2025 instead of January 2025);5 as a result of the postponement of this proposed transfer, the contribution to the Budget from the iSupport / e- CODEX grants is lower than envisaged in Draft Budget 1 (but higher than in Draft Budget 2, see para. 4) in order to ensure the financing of the iSupport position for another year via voluntary contributions (VCs) (see also para. 31);

- the lowering of the costs for the 2025 CDR meeting, following CGAP’s Conclusion & Decision (C&D) No 69, inviting CDR, “[i]n the light of budgetary constraints […] to exceptionally consider holding its 2025 meeting in person at the premises of the PB, with the possibility of online participation and online simultaneous interpretation”6 (see para. 14);

- the lowering of the costs for the 2025 CGAP meeting, following the (late) confirmation of the new fee structure for renting the Hague Academy Building beyond 1 August 2024;7 as the increase of these rental costs is slightly lower than anticipated, costs for the 2025 CGAP meeting have been reduced slightly compared to projections for this meeting in Draft Budget 1 (however, overall costs for this meeting are higher than in the current FY due to the introduction of Spanish as an additional official language); and

- the lowering of funds for representation (see para. 79).

5 The approved Budget for FY 2024-2025 first briefly recalls the general, challenging background against which this Budget has been prepared (II.), including the impact of phase two of the implementation of Spanish as an additional official language as of 1 July 2024 (II.A.), the outcome of CGAP’s decisions relating to meetings and their format (II.B), as well as other factors affecting this Budget (II.D.), before presenting the overall results of the Budget (II.E). This is followed by the actual Budget for FY 2024-2025, allowing a comparison of expenditures and revenues with those of the previous FY (see Art. 5(4), first sentence, of the Fin. Regs), and providing an overview of Member States’ assessed contributions (III.), followed by short comments on each budget article that explain the reasons for any proposed increase or decrease in expenditures and / or revenues (see Art. 5(4), second sentence, Fin. Regs) (IV.). Finally, Annex I provides an overview of the five existing reserve funds, and Annex II reproduces the (unrevised) overview of costs related to the implementation of Spanish as an additional official language of the HCCH over three FYs, as approved by CDR at its meeting in May 2023.

II. A challenging background 6 As mentioned in Draft Budget 1 and Draft Budget 2, there are five key factors that significantly

impact budgetary planning and make for a challenging “starting point” in the Budget for FY 2024- 2025.

5 While the SG wishes to recall the arguments in favour of transferring the iSupport position to the Budget (see Draft

Budget 1, para. 14), there are sufficient VCs available to finance this position fully for another year. Therefore, considering the overall budget increase, the proposal to transfer this position to the Budget can be postponed once more. As a result, the costs of this position have been taken out of this Budget. Subject to further developments relating to the use of iSupport (in particular outside the EU) and the availability of additional VCs, the SG envisages, however, to propose this transfer again in FY 2025-2026.

6 C&D No 69 concludes by indicating that CGAP will assess this format of CDR meetings at its 2026 meeting. 7 The PB reminds the Member States that the new fee structure applied by the Carnegie Foundation for rent of the Hague

Academy Building was not known beyond July 2024 when Draft Budget 1 was prepared. The PB only received the new fee structure from the Carnegie Foundation in March 2024.

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a. First, as recommended by CGAP at its 2023 meeting,8 and as subsequently approved by CDR at its 2023 meeting,9 phase two of costs to implement Spanish as an additional official language as of 1 July 2024 have to be included in this Budget. This means that as of FY 2024-2025, full costs for Spanish translation have been included in the Budget to match the amount available for French translation (Art. 6). Additionally, costs for interpretation in Spanish, and costs for Recording Secretaries working in Spanish, have been added as of the Budget for FY 2024-2025.10

b. Secondly, the costs for meetings at the Hague Academy (in particular the rental fees and costs for interpretation) will increase as of FY 2024-2025 (August 2024, to be precise – the new fee structure thus does not affect the SC meeting on the practical operation of the 1965 Service, 1970 Evidence, and 1980 Access to Justice Conventions, which will take place in July 2024). As mentioned in paragraph 4, the increase is slightly lower than anticipated by the PB in Draft Budget 1. Additionally, in order to provide interpretation in Spanish as of July 2024, as planned, the related costs are now included for the SC, CGAP and CDR meetings in FY 2024-2025 (see paras 11 et seq.).

c. Thirdly, the rental contract for the premises of the PB needed to be examined by CDR at its 2024 meeting to consider possible new arrangements as of July 2024 (see paras 18 et seq.).

d. Fourthly, salaries have increased as a result of the regulatory adjustment to higher costs of living in the Netherlands. The adjustment of salaries is necessary and unavoidable to meet obligations and prevent the Organisation from being exposed to legal risks; every effort has been made to minimise their budgetary impact. Additionally, compared to projections in Draft Budget 1, the allowances some staff members are entitled to have been adjusted due to changes in personal situations.

e. Fifthly, the high inflation in the Netherlands has not only led to increased costs for numerous services, but also requires an inflation adjustment of a considerable number of other budget articles; this adjustment is all the more challenging as the further developments of inflation are difficult to anticipate; the PB has made projections for services based on current costs (April 2024), but it will provide more information about inflation adjustments by service providers if they become available (see para. 54).

7 Mindful of the challenging financial environment that States face, the SG has made every effort to minimise the budgetary impact of the necessary changes and adjustments. Together with the Head

8 See CGAP 2023, C&D No 55, available on the HCCH website at www.hcch.net under “Governance” then “Council on

General Affairs and Policy” and “Archive (2000-2023)”. 9 See Approved Budget and Explanatory Notes for FY 1 July 2023 – 30 June 2024 (FY 69), incl. fn. 3 and Annex II, available

on the Secure Portal of the HCCH website under “Governance” then “Council of Diplomatic Representatives”. 10 While the figures presented in Annex II of the Budget for FY 2023-2024 were based on an online interpretation model for

Spanish only, the Budget for FY 2024-2025 is based on online interpretation costs for Spanish as well as English and French, but only for the SC meeting in July 2024 and the 2025 CDR meeting. As regards the 2025 CGAP meeting, however, the SG prefers to budget for an in-person interpretation model. This is to enable the HCCH to revert to in-person interpretation at CGAP 2025 if the experience with online interpretation at the SC meeting in July 2024 turns out be unsatisfactory. If, on the other hand, the experience with online interpretation at the SC meeting in July 2024 is satisfactory, online interpretation would also be used at CGAP 2025 (in which case the resulting cost savings would contribute to a possible operational surplus). The SG is of the view that this careful approach reflects sound and responsible budgeting. While interpreters remain somewhat reluctant to provide their services online when a meeting is being held in hybrid format, the PB remains convinced that the online model is worthwhile exploring and that it can lead to important cost savings in the future. In addition to the changes in the interpretation models, the change in format for the 2025 CDR meeting, a reassessment of the number of interpreters and interpretation booths required (relaxed post- Covid protocol), and the implementation of a new process for the production of the CDR minutes, will also lead to cost reductions; see also paras 10 and 17 (under the new process for the production of the CDR minutes, the latter will be produced by a single Recording Secretary and then be translated internally into the other official languages of the HCCH; this is opposed to hiring three Recording Secretaries to produce reports in each official language; the new process would not be cost-effective for SC and CGAP meetings which due to the duration of these meetings require a team of Recording Secretaries in any case). With these further improvements of process-efficiency put in place by the PB, the costs of phase two of implementing Spanish will be approximately € 19,000 lower than envisaged in Annex II.

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of Finance, he has, as always, sought to identify any further possibilities to make cuts and economies in any of the budget articles, without jeopardising the effective operation of the HCCH and its PB (D.3). Also, it is suggested that the overall increases be partially covered by using a significant part of the net operational surplus from FY 2022-2023 (€ 72,000, see D.4), and by the reimbursement which the HCCH receives from the European Union (EU) Action Grant for iSupport (€ 34,000, see D.5).

A. Phase two of costs relating to the implementation of Spanish as an additional official language as of 1 July 2024

1. New costs for translation

8 In accordance with the plans approved by CDR in May 2023, in FY 2024-2025 € 15,000 must be added to Article 6b to cover the full costs for external translations into Spanish, bringing this article to € 38,500. In FY 2023-2024, although these costs were also projected at € 38,500, only € 23,500 had to be reflected in the Budget for FY 2023-2024 because the balance of € 15,000 would be covered by VCs. The full costs for translations into Spanish (€ 38,500 in FY 2024-2025) must as of now be reflected as a regular and annual expense.

9 The PB is most grateful for the continuing support and in particular for the significant VCs received from Spain and Mexico during FY 2023-2024, and for the further VC announced by Spain for 2024 to support the implementation of Spanish as an official language.11 The PB continues to encourage Member States to make further VCs towards the implementation of Spanish as an additional official language, which would further decrease the relevant costs to be covered through the Budget.

2. New costs for interpretation

10 In accordance with the plans approved by CDR in May 2023, in FY 2024-2025 costs for Spanish interpretation and Recording Secretaries working in Spanish at meetings have to be added to the Budget (reflected in Art. 12). In 2023, these costs were projected at € 55,000, with € 10,000 to be covered by the VCs received from Spain and Mexico during FY 2023-2024 (see para. 9), bringing the effective costs to be covered through the Budget for FY 2024-2025 to € 45,000. The use of € 10,000 from VCs is reflected in Article 21b of this Budget. As explained in footnote 10, however, based on a change in the interpretation models provided at the July 2024 SC and 2025 CDR meetings, the format of the 2025 CDR meeting, as well as a new process put in place for the production of the CDR minutes, the costs for Spanish interpretation and Recording Secretaries are expected to be approximately € 19,000 lower than envisaged in Annex II for FY 2024-2025.

B. Meetings and their format

1. The meetings

11 In addition to annual governance and financial meetings, for FY 2024-2025, CGAP has mandated the PB to organise one SC meeting, namely an SC meeting on the practical operation of the Service, Evidence, and Access to Justice Conventions. This meeting was provisionally scheduled for June 2023 and then July 2023, but it was postponed as a cost saving measure in FY 2022-2023 and FY 2023-2024.12 It will now be held in July 2024.

11 The balance of VCs received from Germany and Mexico in previous years will also be used to support the implementation

of Spanish. 12 See CGAP 2023, C&D No 39.

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2. Format of meetings and interpretation

12 The approved Budget for FY 2024-2025 is based on CGAP’s recommendation for the July 2024 SC and 2025 CGAP meetings to be held in person with the possibility of online participation. Costs for interpretation at the SC meeting are based on services for the (then) three official languages (English, French, Spanish) being provided online (incl. interpretation provisions for online participants).13 As this will be the first time the online interpretation model will be used at a meeting held in hybrid format, plans include, as a safety measure, for one interpreter to be present in-person in the Hague Academy Building. This interpreter would coordinate the work amongst the team of interpreters and be a fall-back interpreter in case one of the online interpreters faces technical difficulties.

13 The July 2024 SC will be the first time the HCCH uses the online interpretation model for a large meeting in hybrid format. As explained in footnote 10, as regards the CGAP meeting in March 2025, the SG prefers to budget for an in-person interpretation model (for the three official languages). This is to enable the HCCH to revert to in-person interpretation at CGAP 2025 if the experience with online interpretation at the SC meeting in July 2024 turns out be unsatisfactory.

14 In the light of budgetary constraints, CGAP invited CDR to consider exceptionally holding its 2025 meeting in person at the premises of the PB, with the possibility of online participation and online simultaneous interpretation.14 While costs remain subject to confirmation depending on available interpreters and fees, when using the current pricing scheme for interpreters as a model, it is estimated that € 17,050 will be saved by holding the CDR meeting at the premises of the PB and by providing remote interpretation. As a further cost saving measure, the meetings of the StC will continue to be held online.

3. Meeting costs reflected in the Budget

a. SC meeting 2024

15 The costs for a hybrid SC meeting in July 2024 in the Hague Academy building, with online interpretation in the three official languages, amount to € 110,650, based on the current pricing scheme for FY 2023-2024 (compared to € 123,150 in Draft Budget 1 and Draft Budget 2, and € 111,150 as announces by the SG during the April 2024 StC meeting (see paras 94-98).

b. CGAP and CDR meetings 2025

16 The costs for a hybrid 2025 CGAP meeting in the Hague Academy building, with in-person interpretation, amount to € 131,600 (compared to € 133,050 in Draft Budget 1). This is the amount reflected in this Budget (see Part III).

17 The costs for an in-person CDR meeting at the premises of the PB with remote (online) interpretation in May 2025 amount to € 4,750 (compared to € 22,450 in Draft Budget 1). This is the amount reflected in this Budget (see Part III). For more details of the costs of these meetings, see paras 88-93).15

13 It should be noted that the International Association of Conference Interpreters recommends a 25% top-up for

interpretation at meetings with online participants; so far, the PB has managed to negotiate with its interpreters that this substantial increase not be applied.

14 See para. 4 above, referring to CGAP 2024, C&D No 69. 15 Based on the new pricing scheme for 2024-2025 for the Hague Academy Building, the cost of holding CDR at the Hague

Academy as an in-person only meeting, with in-person interpretation, would amount to € 21,800. The costs of holding CDR at the Hague Academy as an in-person only meeting but with online interpretation would be significantly higher at € 31,350, as technical facilities would need to be added to allow for remote interpretation. The costs of holding an online CDR meeting at the premises of the PB without remote (online) interpretation, would amount to € 200 (see also fn. 21).

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C. Rental costs PB premises – End of 11-year rental contract

18 The 11-year rental agreement concluded in 2014 for the premises of the PB will end in June 2025. According to the terms of the contract, if the HCCH wishes to terminate the contract, it must indicate its intention to do so before 1 October 2024. If no indication is given before that date, the rental agreement will be extended for a further three years under the current terms, until 30 June 2028. In the PB’s view, the current premises are adequate both in terms of space and costs. A move to new premises would not only be costly and have a significant impact on the PB’s operations, it would also require additional funds to fit out the new office space so as to accommodate the PB’s needs.

19 Before deciding to extend the current agreement, however, the SG was of the view that the rental conditions under that agreement, in particular the rental price per square meter, should be assessed against the backdrop of current market conditions (these market conditions have changed as a result of the COVID-19 pandemic and the resulting increase of telework). An assessment of the rental conditions seemed all the more appropriate, and indeed necessary, as the yearly discount of approximately € 40,000 on the current rental price, which the HCCH was granted in 2014 as an incentive to move to Churchillplein, expires on 30 June 2024. As a result, if the discount was not extended, the rental price of the premises would increase by approximately € 40,000 per year as of 1 July 2024. This increase was not, however, reflected in the Budget for FY 2024-2025 as the SG anticipated that the rental costs and a discount could be renegotiated as part of a new and long-term deal. In other words, instead of terminating the current contract or having it automatically extended, the SG proposed to replace the current agreement with a new, cost-effective long-term rental agreement that would also bring budgetary certainty and predictability to the HCCH.

20 With a view to ensuring a “good deal”, the SG was hoping to rely again on the expertise of the Netherlands’ Government Building Agency (Rijksvastgoedbedrijf, formerly known as the Rijksgebouwdienst; this agency had assisted the PB during its relocation process in 2013 and 2014), in particular with a view to assessing the competitiveness of the future rental price of the current premises of the PB. However, in response to the PB’s query, the agency indicated that they no longer provide these services. The PB thus continued its efforts and got in touch with the Dutch Ambassador for International Organisations to assess ways in which the Host State could provide assistance in this matter (the SG is indeed of the view that this kind of support should be part of a Host State’s services). The PB then also contacted the Hague Business Agency and the Municipality of The Hague. This expert strongly advised the services of a professional real estate agent for the negotiations with the owner. The PB thus reached out to the same real estate agent from 2014 (REDEPT) and accepted an offer for REDEPT to conduct the negotiations and handle the administrative aspects of a new agreement with the current owner.

21 In his discussions with the real estate agent, the SG stressed that the renewed agreement should include an extension of the discount for at least a few years; the fallback option was a discount for at least FY 2024-2025, with a decreasing discount over the following years. The negotiations also addressed aspects relating to the overall development of the building (e.g., a possibility to have access to conference facilities for meetings involving 40-80 people, and/or to a catered lunch facility in the building complex). Some smaller action points relating to the maintenance of the building were requested to be reflected in the renewed agreement (e.g., an improved intercom system to let people into the building from the entrance and the garage).

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22 The SG continued to inform the Member States of the HCCH of any relevant developments ahead of the 2024 CDR meeting.16 REDEPT engaged with the representatives of the building owners and negotiated a draft rental agreement to fulfil the needs of the PB, including a rental discount to offset expenses for the first five years of the draft rental agreement. With the negotiated annual incentive for the first five years, the full costs of the new agreement would only eventuate in the sixth year of the rental agreement (2029). The result is that the Budget for FY 2024-2025 will not need to be adjusted to include additional funding for the PB premises. The SG is pleased with the outcome of these negotiations and considers that the new rental agreement is indeed in the best interest of the HCCH. Following discussions at its meeting in May 2024, CDR approved the terms of the new rental agreement and authorised the SG to finalise a new agreement for the PB premises for a period of 10 years (1 July 2024 to 30 June 2034).

D. Other factors

1. Increases

23 The approved Budget for FY 2024-2025 also reflects higher costs for numerous operational expenses. These increases, which are explained in more detail under Part IV., are listed below, in addition to the increases already explained above:

 Article 1a Salaries and allowances: + € 197,400  Article 1b Social benefits and insurances: + € 10,400  Article 1g External support (operational / legal): + € 4,600  Article 2a Rent: + € 10,100  Article 2d Cleaning: + €7,800  Article 3a Support / maintenance: + € 1,000  Article 3c Internet / website(s): + € 300  Article 4a Lease / production supplies: + € 10,150  Article 6b Spanish: + € 15,000  Article 7 PB missions: + € 3,000  Article 9 Representation: + € 1,500  Article 12a Venue: +€ 10,550  Article 12b Interpretation (English, French, Spanish): +€ 11,700  Article 12c Additional personnel / moving: +€ 4,700  Article 12i Additional personnel / moving: +€ 1,250  Article 14a Supplies and facilitation: +€ 2,700  Article 15 Retirement or survivors’ pensions: + € 44,500

24 In this Budget for FY 2024-2025, the total of these increases amounts to € 336,650 (compared to € 341,000 in Draft Budget 2 and € 394,400 in Draft Budget 1 – a difference of € 4,350 compared to Draft Budget 2 and € 57,750 compared to Draft Budget 1). Relevant adjustments have led to lower increases of Articles 1a (Salaries and allowances), 1b (Social benefits and insurances), Article 7 (PB missions), Article 9 (Representation), Article 12a (Venue), and Article 15 (Retirement and survivors’ pensions).

2. Reserve Funds & Revolving Fund

25 No additions are made to any of the reserve funds for operational expenses through the respective articles of this Budget. While these funds had to be used during FY 2022-2023, no top-ups are

16 See Memo: Recent Developments Related to the Rental Agreement for the PB Premises, and, in particular, Prel. Doc.

No 6 of May 2024 for CDR, which provides more details about the new rental agreement. Both these documents are available on the Secure Portal of the HCCH website at www.hcch.net under “Governance” then “Council of Diplomatic Representatives”.

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foreseen in the Budget for FY 2024-2025. An overview of all the reserve funds for operational expenses is provided in Annex I.

26 This Budget does not include any contribution to the Revolving Fund. However, given the increase of the total Budget in FY 2023-2024, the Revolving Fund needs to be topped-up in order to remain within the required bandwidth determined by Article 12 of the Fin. Regs. CDR approved to top-up the Revolving Fund by using € 8,412 from the net operational surplus from FY 2022-2023 (see paras 29-30) to this effect.

3. Cuts and economies

27 With a view to compensating for these increases as much as possible, in particular against the backdrop of the challenging economic environment, but also in his continued efforts to apply a realistic and cost-efficient Budget without jeopardising the effective operation of the HCCH and its PB, the SG, together with the Head of Finance, has been able to identify a few items in the Budget for FY 2024-2025 where cuts and economies are possible, either as a result of changed needs or to reflect new circumstances. These cuts and economies relate to:

 Article 1e Fund Staff Rules: - € 25,000  Article 2c Insurance: - € 1,000  Article 8a Bank fees: - € 1,000  Article 12d Venue: - € 9,500  Article 12e Interpretation (English, French, Spanish): - € 1,050  Article 12f Additional personnel / moving: - € 200  Article 12g Venue: - € 19,250  Article 12h Interpretation (English, French, and Spanish): - € 10,650  Article 16 Pension administration by the ISRP: - € 700

28 In the approved Budget for FY 2024-2025, the total of these cuts and economies amounts to € 68,350 (compared to cuts of € 56,700 in Draft Budget 2 and € 46,150 in Draft Budget 1 – a difference of € 11,650 compared to Draft Budget 2 and € 22,200 compared to Draft Budget 1).

4. Use of Operational Surplus from FY 2022-2023

29 Following the SG’s proposal to CDR on the allocation of the net operational surplus for FY 2024- 2025 (see Art. 13(2) Fin. Regs),17 at its meeting in May 2024, CDR approved the use of an amount of € 72,000 from the net operational surplus from FY 2022-2023 as additional revenue (technically an allocation of reserves, as reflected in Art. 18a) to absorb some of the increases in this Budget.18 Inclusion of this amount would have a significant positive impact on the Budget. This approach would also allow for part of the surplus to be redistributed to Member States by significantly lowering Member States’ assessed contributions for FY 2024-2025, without undertaking the time and resource-intense administrative burden of calculating, setting-up and executing reimbursements by way of more than 90 bank transfers of small amounts.

30 CDR also approved that the balance of the net operational surplus from FY 2022-2023 (approx. € 8,000) would be used to top up the Revolving Fund in order to keep it at the level required by Article 12 of the Fin. Regs. With this top-up, the Revolving Fund will be at 12.95% of the assessed contributions for FY 2023-2024 (the lowest it has ever been since the adoption of the Fin. Regs, but still within the limits of the Fin. Regs). No further budgetary funds are to be used to top up the Revolving Fund.

17 See Prel. Doc. No 3 of May 2024 for CDR. 18 As in the past, the surplus from FY 2022-2023 is not the result of inadequate or otherwise unrealistic budgeting, but

mainly the result of unexpected changes of circumstances and the resulting necessary adjustments to the original plans.

9

5. Reimbursement iSupport / eCODEX

31 The reimbursement for iSupport and eCODEX from the EU to cover some costs incurred by the Budget during FY 2024-2025 (i.e., salary costs of some staff members working on iSupport and eCODEX, and overhead costs for operation) is reflected in Article 10. The reimbursement that may be used in the Budget for FY 2024-2025 amounts to € 34,000 (see also para. 4).19 For technical reasons, this reimbursement is reflected as a “negative cost”. This reimbursement is lower than what was envisaged in Draft Budget 1 (€ 40,000) as the iSupport position is no longer proposed to be moved to the Budget for FY 2024-2025 and as a result, the VCs must be used to cover the costs of this position; based on a reassessment of funds the contribution has been raised from € 29,000 in Draft Budget 2.

6. Additional units

32 No additional units are taken into account in the Budget for FY 2024-2025.

33 While the PB is in contact with the (currently three) admitted States regarding the completion of their membership process, at the time of submitting this Budget, these processes have not advanced enough to warrant, or indeed justify, inclusion of their respective units in this Budget.

34 As a result of these developments, the total number of units in the HCCH Budget is 640.5.

E. Overall results

35 As a result of all of the above, compared to the Budget for FY 2023-2024, the key indicators of the approved Budget for FY 2024-2025, are:

 Operation of the PB and International Meetings: increase of € 219,500 or 5.23%;20  Total expenses of the Budget (Operation of the PB, International Meetings plus Present and

Future Pension Liabilities): increase of € 263,300 or 5.48%;  Total Budget: increase of € 263,300 or 5.27%;  Total assessed contribution of the Member States: increase of € 251,393 or 5.16%;  Value of the Member States’ assessed contributions per budgetary unit: increase of

€ 392.49 or 4.99%.21

36 The median number of budgetary units allocated to Member States is three. Thus, the median increase of assessed contributions under this Budget amounts to € 1,177.47.

37 As mentioned, the SG is mindful of the challenges that States face as a result of the current economic context. These circumstances, however, are beyond the PB’s control. The SG remains committed to a realistic Budget, based on the actual needs of the HCCH and the PB considering the Work Programme and priorities decided by CGAP.

19 In accordance with the EU Action Grant guidelines, the HCCH may use this reimbursement for any purpose, incl. towards

salary costs. 20 Without the costs relating to the second phase of implementing Spanish as an additional official language, the increase

would be € 183,500 or 4.37%. 21 If CDR were held at the Hague Academy as an in-person only meeting with in-person interpretation, the increase per unit

would be 5.33%; if CDR were held at the Hague Academy as an in-person only meeting but with remote interpretation, the increase per unit would be 5.52%. If CDR were held at the premises of the PB without interpretation, the increase per unit would be 4.90% (see also fn. 15).

10

Budget Financial Year Budget Financial Year 1 July 2023-30 June 2024 (FY 69) 1 July 2024-30 June 2025 (FY 70)

EXPENSES

OPERATION OF THE PERMANENT BUREAU

Art 1 Personnel

1a Salaries and allowances 2,858,900.00 3,056,300.00 1b Social benefits and insurances 198,800.00 209,200.00 1c Home leave 10,500.00 10,500.00 1d Fund relocation - - 1e Fund Staff Rules (HR matters not covered in other Articles 25,000.00 - 1f ISRP administration 6,500.00 6,500.00 1g External support (operational / legal) 88,500.00 93,100.00

3,188,200.00 3,375,600.00

Art 2 Office space and operation

2a Rent 194,000.00 204,100.00 2b Service 76,500.00 76,500.00 2c Insurance 11,800.00 10,800.00 2d Cleaning 27,000.00 34,800.00 2e Office supplies 12,000.00 12,000.00 2f Telecommunication / postage 10,000.00 10,000.00 2g Fund maintenance / equipment - -

331,300.00 348,200.00

Art 3 IT

3a Support / maintenance 50,000.00 51,000.00 3b Software licenses / hardware 63,000.00 63,000.00 3c Internet / website(s) 13,500.00 13,800.00 3d Fund IT / equipment - -

126,500.00 127,800.00

Art 4 Copying, printing, and publications

4a Lease / production supplies 77,500.00 87,650.00 4b External design, lay-out 1,000.00 1,000.00 4c Fund recueil - -

78,500.00 88,650.00

Art 5 Library

5a Subscriptions 13,000.00 13,000.00 5b Purchases 6,500.00 6,500.00

19,500.00 19,500.00

Art 6 External translators

6a French 38,500.00 38,500.00 6b Spanish* 23,500.00 38,500.00

62,000.00 77,000.00

Art 7 PB missions 71,500.00 74,500.00

Art 8 Financial operation

8a Bank fees 5,000.00 4,000.00 8b Audit fees 49,000.00 49,000.00

54,000.00 53,000.00

III. The approved Budget for FY 2024-2025

11

Art 9 Representation (incl. for international meetings) 18,000.00 19,500.00

Art 10 Overhead reimbursements iSupport / eCODEX (29,000.00) (34,000.00)

Art 11 Unforeseen 3,500.00 3,500.00

SUBTOTAL 3,924,000.00 4,153,250.00

Budget Financial Year Budget Financial Year 1 July 2023-30 June 2024 (FY 69) 1 July 2024-30 June 2025 (FY 70)

MEETINGS

Art 12 Off-site meetings (Hague Academy)

CGAP 12a Venue 72,650.00 83,200.00 12b Interpretation (English, French, and Spanish) 22,850.00 34,550.00 12c Additional personnel / moving 9,150.00 13,850.00

104,650.00 131,600.00 CDR

12d Venue 9,500.00 - 12e Interpretation (English, French, and Spanish) 5,100.00 4,050.00 12f Additional personnel / moving 900.00 700.00

15,500.00 4,750.00

Special Commissions and other meetings 12g Venue 94,000.00 74,750.00 12h Interpretation (English, French, and Spanish) 32,700.00 22,050.00 12i Additional personnel / moving 12,600.00 13,850.00

139,300.00 110,650.00

subtotal 259,450.00 247,000.00

Art 13 On-site meetings (PB) - incl. additional personnel 3,000.00 3,000.00

Art 14 Other costs relating to HCCH meetings

14a Supplies and facilitation 7,000.00 9,700.00 14b Travel consultants and external experts 2,500.00 2,500.00

9,500.00 12,200.00

SUBTOTAL 271,950.00 262,200.00

Budget Financial Year Budget Financial Year 1 July 2023-30 June 2024 (FY 69) 1 July 2024-30 June 2025 (FY 70)

PRESENT AND FUTURE PENSION LIABILITIES

Paid by all Member States

Art 15 Retirement or survivors' pensions 587,700.00 632,200.00

Art 16 Pension administration by the ISRP 17,700.00 17,000.00

SUBTOTAL 605,400.00 649,200.00

TOTAL EXPENSES 4,801,350.00 5,064,650.00

12

Budget Financial Year Budget Financial Year 1 July 2023-30 June 2024 (FY 69) 1 July 2024-30 June 2025 (FY 70)

REVENUES

Art 17 Contribution of the Member States 4,871,651.00 5,123,044.00

Art 18 Allocation of reserves from previous FY 73,093.00 72,000.00

Art 19 Contribution of a Member Organisation 39,000.00 39,000.00

Art 20 Income derived from sales of publications 15,000.00 18,000.00

Art 21 Voluntary Contributions (VC) for implementation of Spanish

21a VC for Spanish translation FY 23-24 (reflected in Art.6b)* [15,000.00] - 21b VC for Spanish interpretation FY 24-25 - 10,000.00

[15,000.00] 10,000.00

TOTAL REVENUES 4,998,744.00 5,262,044.00

OTHER VOLUNTARY CONTRIBUTIONS

Art 22a VC from Members p.m. p.m.

Art 22b VC from non-Members p.m. p.m.

TOTAL VC - -

TOTAL BUDGET 4,998,744.00 5,262,044.00

ACCRUED UNFUNDED PENSION LIABILITIES

Art 23 Paid, in addition to their contribution to the Budget, 197,394.00 197,394.00 by all States that were Member on or prior to 1 July 2010

and which have not yet paid off their full share in these liabilities

EXPLANATION OF CONTRIBUTIONS TO BE PAID BY THE MEMBER STATES

*See Annex II for implementation details for Spanish as an official language as of 1 July 2024, as decided and approved by CDR in May 2023. In FY 23-24 the expected VC was ncluded in Art. 6b. For better transparency and comparison, it is now reflected in Art. 21a. The overall budget for FY 23-24 is not affected.

Overview II lists the total contributing share of each State that was a Member on or prior to 1 July 2010 and that has paid off its share in the accrued unfunded pension liabilities or that became a Member after 1 July 2010 (and thus does not have to pay for accrued unfunded pension liabilities at all): € 2,272,490 to be divided by 295.5 units = € 7,690.32 per unit.

The increase per unit is 4.99% or € 392.49 per unit compared to the previous Financial Year 2023-2024 (FY 69).

The calculation for the contributions of the Member States is based on the number of units assigned to each Member State under the system of the Universal Postal Union (as amended at the 23rd meeting of the Council of Diplomatic Representatives on 1 November 1977).

The total contribution to be paid by the Member States amounts to € 5,123,044 (see Art. 17).

Overview I lists the total contributing share of each State that was a Member on or prior to 1 July 2010 and that has not yet paid off its full share in the accrued unfunded pension liabilities (Art. 22): the contribution to the operating Budget (incl. the present and future pension liabilities), € 2,653,160, is divided by 345 units; the contribution to accrued unfunded liabilities, € 197,394, is divided by 347.5 units. The total in Overview I is € 2,850,554 The total per unit is €  8,258,36 per unit (with the exception of Austria, Brazil, Georgia, Poland, and Russia).

13

MEMBERS units accrued unfunded contribution to the total contribution pension liabilities operational Budget to be paid

ALBANIA 1 568.04 7,690.32 8,258.36 ARGENTINA 3 1,704.12 23,070.96 24,775.08 AUSTRALIA 20 11,360.81 153,806.40 165,167.21 AUSTRIA * 6 2,840.20 46,141.92 48,982.12 BELARUS 1 568.04 7,690.32 8,258.36 BOSNIA AND HERZEGOVINA 1 568.04 7,690.32 8,258.36 BRAZIL** 10 11,360.81 76,903.20 88,264.01 BULGARIA 3 1,704.12 23,070.96 24,775.08 CHILE 3 1,704.12 23,070.96 24,775.08 CYPRUS 1 568.04 7,690.32 8,258.36 CZECH REPUBLIC 5 2,840.20 38,451.60 41,291.80 ECUADOR 1 568.04 7,690.32 8,258.36 EGYPT 5 2,840.20 38,451.60 41,291.80 ESTONIA 1 568.04 7,690.32 8,258.36 FRANCE 33 18,745.33 253,780.56 272,525.89 GEORGIA *** 1 284.02 7,690.32 7,974.34 GREECE 3 1,704.12 23,070.96 24,775.08 HUNGARY 5 2,840.20 38,451.60 41,291.80 INDIA 20 11,360.81 153,806.40 165,167.21 ISRAEL 3 1,704.12 23,070.96 24,775.08 JAPAN 33 18,745.33 253,780.56 272,525.89 JORDAN 1 568.04 7,690.32 8,258.36 LATVIA 1 568.04 7,690.32 8,258.36 LUXEMBOURG 3 1,704.12 23,070.96 24,775.08 MALAYSIA 3 1,704.12 23,070.96 24,775.08 MONTENEGRO 1 568.04 7,690.32 8,258.36 MOROCCO 5 2,840.20 38,451.60 41,291.80 NEW ZEALAND 5 2,840.20 38,451.60 41,291.80 NORTH MACEDONIA 1 568.04 7,690.32 8,258.36 NORWAY 10 5,680.40 76,903.20 82,583.60 PERU 1 568.04 7,690.32 8,258.36 POLAND * 6 2,840.20 46,141.92 48,982.12 REPUBLIC OF KOREA 15 8,520.60 115,354.80 123,875.40 RUSSIAN FEDERATION **** 20 8,520.60 153,806.40 162,327.00 SERBIA 1 568.04 7,690.32 8,258.36 SLOVENIA 1 568.04 7,690.32 8,258.36 SOUTH AFRICA 10 5,680.40 76,903.20 82,583.60 SPAIN 25 14,201.01 192,258.00 206,459.01 SURINAME 1 568.04 7,690.32 8,258.36 SWEDEN 15 8,520.60 115,354.80 123,875.40 SWITZERLAND 15 8,520.60 115,354.80 123,875.40 TÜRKIYE 5 2,840.20 38,451.60 41,291.80 UKRAINE 5 2,840.20 38,451.60 41,291.80 UNITED STATES OF AMERICA 33 18,745.33 253,780.56 272,525.89 URUGUAY 3 1,704.12 23,070.96 24,775.08

197,393.99 2,653,160.40 2,850,554.39 rounding differences 0.01 (0.40) (0.39)

Total taken into account 345.0 197,394.00 2,653,160.00 2,850,554.00 for Financial Year FY 70

(1) As amended at the 23rd meeting of the Council of Diplomatic Representatives on 1 November 1977

* Austria and Polands' contribution to operational Budget is based on 6 units. Their shares of the accrued unfunded liabilities are based on 5 units. ** Brazil's contribution to operational Budget is based on 10 units. Its share of the accrued unfunded liabilities is based on 20 units. *** Georgia's contribution to operational Budget is based on 1 unit. Its share of the accrued unfunded liabilities is based on 0.5 units. **** The Russian Federations' contribution to operational Budget is based on 20 units. Its share of the accrued unfunded liabilities is based on 15 units.

Under the system of the Universal Postal Union (1)

OVERVIEW I

Total contributing share of each State that was a Member on or prior to 1 July 2010 and that has

not yet paid off its full share in the accrued unfunded pension liabilities

Financial Year 2024-2025 (FY 70)

14

contribution to the MEMBERS units operational Budget

(= total contribution to be paid)

ANDORRA 1 7,690.32 ARMENIA 1 7,690.32 AZERBAJAN 1 7,690.32 BELGIUM 15 115,354.80 BURKINA FASO 0.5 3,845.16 CANADA 33 253,780.56 CHINA 33 253,780.56 COSTA RICA 1 7,690.32 CROATIA 1 7,690.32 DENMARK 10 76,903.20 DOMINICAN REPUBLIC 1 7,690.32 EL SALVADOR 1 7,690.32 FINLAND 10 76,903.20 GERMANY 33 253,780.56 HONDURAS 1 7,690.32 ICELAND 1 7,690.32 IRELAND 5 38,451.60 ITALY 27 207,638.64 KAZAKHSTAN 1 7,690.32 LITHUANIA 1 7,690.32 MALTA 1 7,690.32 MAURITIUS 1 7,690.32 MEXICO 10 76,903.20 MONACO 1 7,690.32 MONGOLIA 1 7,690.32 NAMIBIA 1 7,690.32 NETHERLANDS 15 115,354.80 NICARAGUA 1 7,690.32 PANAMA 1 7,690.32 PARAGUAY 1 7,690.32 PHILIPPINES 1 7,690.32 PORTUGAL 5 38,451.60 REPUBLIC OF MOLDOVA 1 7,690.32 ROMANIA 3 23,070.96 SAUDI ARABIA 20 153,806.40 SINGAPORE 4 30,761.28 SLOVAKIA 3 23,070.96 SRI LANKA 3 23,070.96 THAILAND 3 23,070.96 TUNISIA 5 38,451.60 UNITED KINGDOM 33 253,780.56 UZBEKISTAN 1 7,690.32 VENEZUELA 1 7,690.32 VIET NAM 1 7,690.32 ZAMBIA 1 7,690.32

2,272,489.56 rounding differences 0.44

Total taken into account 295.5 2,272,490.00 for Financial Year 70

(1) As amended at the 23rd meeting of the Council of Diplomatic Representatives on 1 November 1977

Under the system of the Universal Postal Union (1)

OVERVIEW II

Total contributing share of each State that was a Member on or prior to 1 July 2010 and that has

paid off its full share in the accrued unfunded pension liabilities or that became a Member after 1 July 2010

Financial Year 2024-2025 (FY 70)

15

IV. Comments on Articles of the approved Budget for FY 2024-2025

A. Expenses

1. Operation of the PB

a. Article 1, Personnel

Article 1a, Salaries and allowances

38 Compared to the Budget for FY 2023-2024, this article increases by € 197,400 (as opposed to € 228,100 in Draft Budget 1). It covers costs for 26.95 FTEs, which is the same number of FTEs in the Budget for the current FY. As mentioned in paragraph 4, this Budget no longer includes costs for the iSupport position as of January 2025 (now possibly envisaged to be transferred in July 2025).22 The article includes regulatory salary adjustments related to staff progression, as well as costs for other allowances and entitlements tied to the Staff Rules. Salaries and allowances are established in accordance with the Remuneration Adjustment Method (RAM) applied to salaries and allowances for Co-ordinated and Associated Organisations located in the Netherlands. The salary projections for 2025 are calculated using the 2024 salary scales for the Netherlands (as determined by the International Service for Remunerations and Pensions (ISRP) and the Coordinating Committee on Remuneration (CCR)), as well as an estimated RAM rate of 2%.23 This latter projection is necessary to avoid underfunding for salaries from January to June 2025.

39 The total personnel costs, including pension liabilities and related administration costs, amount to 80.24% of the total Budget. This percentage is based on the total of Articles 1, 15, 16 and 22 (and not just on salary costs). When only considering costs for active staff in Article 1a, 1b and 1c, the total personnel costs amount to 62.26% of the total Budget.24

40 As in previous FYs, the human resources costs of the Regional Office for Asia and the Pacific (ROAP) are not included in this Budget. The SG wishes to stress again, however, that in his view the current situation with different treatments applicable to two existing Regional Offices is not satisfactory. The matter will need to be considered by CGAP and CDR in the future; this consideration may include, without prejudice, arguments about equal treatment of the two existing Regional Offices.

Article 1b, Social benefits and insurances

41 This article increases by € 10,400 (compared to € 11,900 in Draft Budget 2 and€ 14,300 in Draft Budget 1). It includes costs for a group insurance policy to cover the risks of death and disability, as well as temporary or long-term sick leave.25 The increase of this article is necessary to meet expenses for medical and disability insurance (based on annual premiums) and is beyond the PB’s discretion.

42 The article covers partial reimbursement of certain health insurance expenses for staff, in keeping with mandatory statutory policies of the Host State Agreement with the Netherlands.

22 See also fn. 5. 23 The RAM includes, but is not limited to, an inflation component; the adjustment is determined by the ISRP and is approved

by the CCR as well as the governing bodies of the Co-ordinated and Associated Organisations. A Memo prepared by the ISRP relating to the calculation and application of the RAM is available on the Secure Portal of the HCCH website. The salary scales enter into force on 1 January of each calendar year, and the RAM can represent an increase or a decrease in a given year.

24 According to information received from the ISRP for comparison, active staff costs at the OECD amount to approximately 80%.

25 The definitive premium is calculated at the end of each FY as a percentage of actual salary and health insurance costs over the year.

16

Article 1c, Home leave

43 This article remains unchanged. It covers travel expenses with respect to home leave for eligible officials and their dependants (approx. 30 persons in total). While home leave is accrued by eligible staff every two years, staff have a period of 18 months in which to use it. It is, therefore, necessary to budget for these obligations in anticipation that they can be claimed during FY 2024-2025. Additionally, flight tickets have become significantly more expensive.

Article 1d, Fund relocation

44 This article remains unchanged. It covers possible relocation costs during FY 2024-2025 for current and future officials of the PB, as well as removal costs and the relocation allowance. No reappropriations (cross-funding), from or to other Funds, are foreseen in FY 2024-2025 (see Annex I).

Article 1e, Fund Staff Rules (HR matters not covered in other Articles)

45 This article decreases by € 25,000. Based on expected projections, this Fund will not require a top- up through the Budget in FY 2024-2025. In May 2023 CDR approved the PB’s proposal to increase the target of this Fund from € 100,000 to € 125,000, with a top-up of € 25,000.

46 The Reserve Fund for the Staff Rules is used to cover costs in each FY relating to the application of certain governance and HR provisions associated with the Staff Rules, such as dispute resolution mechanisms (incl. the use of confidentiality counsellors, mediators, conciliators or arbitrators, a complaints procedure, a conciliation procedure, and an appeals procedure to the Administrative Tribunal of the Council of Europe), external legal fees, and the use of services of external HR experts (to the extent needed). This Reserve Fund is also used to finance possible training of staff in matters of team development, management, and initiatives to improve the PB’s overall operation.

47 This Fund includes a sub-fund for the possible payment of an indemnity for loss of employment (see Art. 13 of the Staff Rules and the Budget for FY 2017-2018). This sub-fund consists of a ring- fenced amount for this purpose. The ring-fenced amount was set at € 30,000 by CDR at its meeting in May 2019 and increased to € 32,500 by CDR in May 2021.26

48 Any balance in this Fund remains part of this Fund and is not part of an operational surplus.

Article 1f, ISRP administration

49 This article remains unchanged. It covers costs for annual publications by the ISRP and the CCR on the adjustments of salaries, allowances and pensions for Co-ordinated Organisations, as well as the specific salary scales applicable to the relevant countries, including the Netherlands and Argentina.

Article 1g, External support (operational / legal)

50 This article increases by € 4,600. It covers work on publications of the HCCH, including the upcoming new editions of the Practical Handbooks on the Service and Evidence Conventions (approx. 38% of the total article). It also includes an increase for the external technical support provided by a qualified accountant, which is essential for the effective operation of the financial office of the PB and for enabling the SG to fulfil his increased responsibilities as defined in the 2016 Fin. Regs. The increase is due to increased audit requirements to meet current compliance

26 In the hypothetical case of an Official at Grade A2, who is not entitled to any allowances (e.g., family and / or child

allowance) and who has been with the Organisation for any term between five and 10 years, the amount would reach approx. € 42,000. Based on the actual staff data of the PB (incl. number of years spent at the PB), there is, however, a strong likelihood that a possible indemnity would be significantly higher. The ring-fenced amount may thus have to be increased in the future.

17

regulations (with this increase, that position counts for approx. 32% of the total article). This article also includes costs for library support (approx. 6% of the total article), as well as general services support for PB operations, meetings, and publications (approx. 18% of the total article). In comparison to the Budget for FY 2023-2024, these hours have been reduced based on projected services.

51 The external operational (non-legal) support provided to the PB by parties not hired as staff of the HCCH, remains essential. In addition, relying on external parties rather than hiring staff for this work is considerably more cost-effective.

52 Finally, this article includes costs for possible external legal support in relation to ongoing normative projects for which external assistance is required; costs for this support have been cut slightly and represent approximately 6% of the total article.

b. Article 2, Office space and operation

53 The increased cost for services in the Netherlands has a significant impact on operations of the PB. Furthermore, inflation adjustments implemented by service providers remain unpredictable. The PB has, therefore, made projections for services based on current and actual costs (as far as they are known in May 2024); in addition, and as per past practice, an inflation rate of 2% has been applied to certain articles as disclosed below. This is also the inflation rate used in the Net Present Value analysis (NPV) presented to the Members as part of the relocation process to Churchillplein 6b in 2014.27 As of the next FY, the PB will use the NPV applicable for the new rental contract as of July 2024 to project the evolution of rent and services costs of the premises of the PB. This allows for the projection of a gradual increase to avoid the risk of underfunding operational expenses and more drastic escalations in the future.

54 An inflation adjustment rate of just 2%, however, is low, considering that the inflation rate in the Netherlands in 2023 was 3.8%. This is lower compared to 2022, but only if energy is included; if energy is excluded, the inflation rate in 2023 was still at 6.5%, thus affecting a lot of operational costs of the HCCH.28 It is generally expected that inflation will be somewhat lower in 2024.29 The SG hopes that continuing to apply a relatively low 2% inflation adjustment for expense planning, unless expressly indicated otherwise by service providers, will be sufficient to cover actual costs throughout FY 2024-2025.30 The SG wishes to express a note of caution, though, and suggests that the developments of the inflation rate be monitored carefully. That said, in this Budget, costs can remain neutral in some articles despite inflation projections because actual expenses are expected to be slightly lower in FY 2024-2025. This means that a total of 15 articles have also effectively decreased (in addition to the five articles that have actually decreased).

Article 2a, Rent

55 This article increases by € 10,100. It covers costs for rent of the PB premises at Churchillplein 6b. In keeping with the NPV presented to the Members in 2014, these figures reflect current expenses plus an estimated 2% inflation rate (see para. 54; on the matter of the ending of the rental agreement for the premises of the PB, see paras 18-22).

27 Available at http://www.hcch.net/upload/hidden/2014/dipl/20140124npv_en.pdf. 28 See https://www.cbs.nl/en-gb/news/2024/02/inflation-rate-3-8-percent-in-2023-excluding-energy-at-6-5-percent. 29 https://www.dnb.nl/en/current-economic-issues/the-state-of-the-dutch-economy/. Though in March 2024, the inflation

in the Netherlands rose again to 3.1%, see https://www.cbs.nl/en-gb/news/2024/15/inflation-rises-to-3-1-percent-in- march.

30 According to the Netherlands Bank, an inflation rate of 2% across the euro area remains the target, see https://www.dnb.nl/en/the-euro-and-europe/inflation/.

18

Article 2b, Service

56 While this article has been adjusted to reflect current expenses, plus an estimated 2% inflation rate in keeping with the NPV presented to the Members in 2014 (see para. 54), the net effect is that it remains unchanged.

Article 2c, Insurance

57 This article decreases by € 1,000. It has been adjusted to reflect actual expenses, plus an estimated 2% inflation rate (see para. 54). This article includes fire, theft, goods and equipment, liability and travel insurance for the PB.

Article 2d, Cleaning

58 This article increases by € 7,800. It reflects current expenses plus an inflation adjustment as applied by the service provider in the current FY (see para. 54). It covers cleaning costs for the office. Also, upon retirement of the General Services Officer (and the non-replacement of this staff position), some cleaning and maintenance responsibilities that fell under the responsibility of that Officer had to be shifted to the cleaning company. It should be noted that the current contract with this service provider was recently renegotiated and adjusted to the higher costs resulting from inflation.

Article 2e, Office supplies

59 This article remains unchanged. It includes costs for office supplies, stationery, etc., necessary for the operation of the PB during FY 2024-2025.

Article 2f, Telecommunication / postage

60 This article remains unchanged. It covers telecommunication costs for the VOIP and telephone conference call system used at the PB, as well as postage costs.

Article 2g, Fund maintenance / equipment

61 This article remains unchanged. It covers maintenance costs for the office space and general office equipment (e.g., the annual carpet cleaning, treatment of the wooden floor in the kitchen, servicing of the air conditioning in the conference room and the server room, repairs, etc.). No reappropriations (cross-funding), from or to other Funds, are foreseen in FY 2024-2025 (see Annex I).

c. Article 3, IT

62 A robust, secure, and efficient IT infrastructure is essential to enable smooth office operations, including via telework. The continued maintenance and updating of the IT infrastructure is of paramount importance.

Article 3a, Support / maintenance

63 This article increases by € 1,000. It reflects current expenses plus an estimated 2% inflation rate (see para. 54). It covers the PB’s external IT support and maintenance costs.

Article 3b, Software licenses / hardware

64 While this article has been adjusted to reflect current expenses, plus an estimated 2% inflation, the net effect is that it remains unchanged. The article mainly includes costs for computer licenses.

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Article 3c, Internet / website(s)

65 This article increases by € 300. It has been adjusted to reflect current expenses, plus an estimated 2% inflation. It includes costs for Internet and HCCH website(s).

Article 3d, Fund IT / equipment

66 This article remains unchanged. This Fund is used as a reserve for updates to the IT infrastructure and equipment that are required but that cannot be absorbed by the other lines in Article 3 (e.g., to replace servers). No reappropriations (cross-funding), from or to other Funds, are foreseen in FY 2024-2025 (see Annex I).

d. Article 4, Copying, printing and publications

Article 4a, Lease / production supplies

67 This article increases by € 10,150. It reflects current costs of the lease contract plus an inflation adjustment as applied by the supplier in the current FY (see paras 53-54). It covers costs to lease copiers and printers for the PB, as well as costs for supplies needed to produce all publications. The lease contract for the copiers was entered into as a cost-saving measure in order to produce all HCCH publications in house, rather than having them produced by external publishers, which would be significantly more expensive.

Article 4b, External design, lay-out

68 This article remains unchanged. With a view to reducing costs, the PB is now handling almost all of this work internally. This article primarily includes costs for photo credits in publications.

Article 4c, Fund Recueil

69 This article remains unchanged. This Fund is a reserve for the publication of the Collection of HCCH Instruments (Recueil). As the most recent edition of the Collection of HCCH Instruments was published in March 2020, this Fund will be used for possible reprints of the 2020 edition or the publication of a subsequent new edition. No reappropriations (cross-funding), from or to other Funds, are foreseen in FY 2024-2025 (see Annex I).

e. Article 5, Library

Article 5a, Subscriptions

70 This article remains unchanged. It covers costs for subscriptions that are necessary to maintain a basic, up-to-date library at the PB and to enable the legal staff to conduct its work.

Article 5b, Purchases

71 This article remains unchanged. The article funds necessary purchases to maintain a basic, up-to- date library at the PB and to enable the legal staff to conduct its work.

f. External translations

72 The PB assures translations using an internal Translator / Reviser for French and Spanish respectively, and several external translators. Generally, the internal Translator / Reviser is responsible for the day-to-day translation work, including Preliminary Documents for CGAP, CDR and SC meetings, circulars, presentations, factsheets, promotional materials, and speeches. External translators are used for more voluminous publications, such as Practical Handbooks and Guides to Good Practice, as well as other technical publications such as Explanatory Reports. Internal staff cannot be used for these voluminous publications as they would be blocked for

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multiple weeks or months. This combination of internal Translators / Revisers and external translators allows the PB to manage both short-term and long-term translation work, and to do so cost-effectively.

Article 6a, French

73 This article remains unchanged. It covers translations of documents and communications into French. This article remains under pressure and does not even compensate for inflation costs.

Article 6b, Spanish

74 This article increases by € 15,000. As mentioned in paragraph 8, as of FY 2024-2025 this article must cover the full costs of € 38,500 for external translations into Spanish.

g. Article 7, PB missions

75 Compared to the Budget for FY 2023-2024, this article increases by € 3,000 (as opposed to (€ 4,000 in Draft Budget 2 and € 6,600 in Draft Budget 1). This slight increase still does not bring the nominal amount of the article back to a pre-Covid level (€ 76,500 in FY 2019-2020). Considering the sharp increase in flight and hotel costs following the COVID-19 pandemic, this article has effectively decreased significantly compared to pre-pandemic times. This article, however, is essential to allow the PB to conduct relevant missions to serve the HCCH’s strategic goal of universality and inclusiveness.

76 This article needs to cover expenses for important missions of approximately 15 members of the PB. Travel expenses (incl. daily subsistence allowances) are paid in keeping with procedures outlined in the Staff Rules, and the SG continues to apply a strict travel policy for each mission, where prior approval by the SG is required. Organisers of seminars, workshops, or any other meeting to which the PB is invited are regularly asked to contribute to the mission costs (travel, hotel, or both) of PB representative(s), if possible. Such contributions are received on various occasions, although they sometimes only partially cover costs. Participation in meetings via videoconference (instead of in-person participation with related travel expenses) will continue to be used when possible and appropriate.

h. Article 8, Financial operation

Article 8a, Bank fees

77 This article decreases by € 1,000. It covers costs for operating PB bank accounts and PB transaction costs.

Article 8b, Audit fees

78 While this article has been adjusted to reflect current expenses, plus an estimated 2% inflation, the net effect is that it remains unchanged (see para. 54). The article includes the annual costs to audit the HCCH accounts and pensions. It also includes annual costs for preparatory actuarial pension work for the audit. It should be noted that fees for the auditing of VCs are not included in this article and are covered directly by VCs.

i. Article 9, Representation (incl. for international meetings)

79 Compared to the Budget for FY 2023-2024, this article increases by € 1,500 (as opposed to € 2,000 in Draft Budget 1). It covers costs for the SG reception (which, for cost efficiency reasons, is always held during the CGAP meeting) and other small functions offered by the SG or the PB during HCCH meetings. Some basic expenses have also increased as a result of services and suppliers raising prices. This article also covers work-related lunch or dinner invitations during the

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FY, small gifts for experts who chair meetings, flowers, etc. It also includes a small amount for organising a promotional day for the work of the HCCH as part of The Hague International Open Day, during which many Hague-based international organisations are represented. These representational activities are an important element of international diplomacy and outreach. They also serve the HCCH’s strategic goal of universality and inclusiveness.

j. Article 10, Overhead reimbursement iSupport and eCODEX

80 This article reflects a negative expense (a payment to the HCCH) of € 34,000 (compared to € 29,000 in Draft Budget 2 and to € 40,000 in Draft Budget 1) expected from the EU Action Grant for iSupport and eCODEX. The payment compensates the HCCH for overhead expenses incurred by the PB for the use of office space and equipment for this project, as well as for salary costs (on a pro-rata basis) for one staff member occasionally contributing to the project.31

k. Article 11, Unforeseen

81 This article remains unchanged. It is used to cover any unforeseen expenses during the FY.

82 The PB uses this line exceptionally, either when the relevant costs could not be foreseen at all, when the nature of the costs cannot be categorised under any other budget article, or when it is possible to cover expenses that would otherwise have to fall under a particular fund. Although this article is most likely too low by any contingency budget principles (it only amounts to approx. 0.07% of the total Budget), it remains an important budget line given that the HCCH Budget is very clearly defined per article, and at times unexpected expenses arise during a FY that cannot be allocated to an existing budget line as defined.

2. Meetings

83 As mentioned above (paras 6b, 11 et seq.), meeting costs are higher because rental costs and interpretation costs have increased for FY 2024-2025. Costs are based on rental fees at the Hague Academy for one SC meeting on the practical operation of the Service, Evidence, and Access to Justice Conventions (to be held in July 2024 as an in-person meeting with the possibility of online participation and with online interpretation), CGAP 2025 (to be held as an in-person meeting with the possibility of online participation and with in-person interpretation), and CDR 2025 (to be held as in-person meeting at the premises of the PB with the possibility of online participation and with online interpretation). While costs for interpretation remain subject to available interpreters and their fees, and depending on experience that can be gained during SC meeting in July 2024 and the CDR 2025 meeting, the PB will continue to assess what further cost savings can be expected if online interpretation is offered at future meetings. The SC meeting is budgeted on a model with one day for set-up, 3.5 meeting days, and a half day for breakdown time (costs are for five days in total). Since the Carnegie Foundation charges for the rent of the Hague Academy building over weekends, even if the room is not being used, the SG continues to suggest that SC meetings be held from Tuesday mornings to Friday noon.

84 It should be noted that while there was also only one SC meeting32 held in the current FY, it was more expensive as this meeting was exceptionally held for longer and over two weeks. This explains why, despite higher fees and costs for interpretation booths, Article 12g effectively decreases in FY 2024-2025 (see paras 94 et seq.).

31 Rules applicable to this kind of EU action grant provide for a flat rate of 7% for indirect costs, in order to cover the

overhead costs incurred by project participants. Indirect costs are distinguished from compensation to the HCCH for the services to iSupport and eC0DEX of PB staff members whose salaries are paid out of the HCCH Budget. The exact final value depends on the European Commission accepting the costs and the amount of the costs actually incurred.

32 SC meeting on the practical operation of the 1980 Child Abduction and 1996 Child Protection Conventions (October 2023).

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85 Meeting costs for the SC meeting in FY 2024-2025 are based on 2023-2024 prices, as the Carnegie Foundation has agreed to maintain these prices for use of the Hague Academy for the SC meeting in the first week of July 2024. After this, a new pricing scheme for 2024-2025 will apply till June 2025. This Budget, therefore, has been adjusted to take into account the new rental fees at the Hague Academy for CGAP 2025. Rental costs at the Hague Academy have been removed from this Budget for CDR 2025, as a cost saving measure suggested by CGAP and approved by CDR at its May 2024 meeting (see paras 14 and 17). It should be noted that although CDR will no longer be considered an off-site meeting in the next FY, the presentation of costs under Article 12d to 12f has been maintained in order to allow for clear comparison of costs between FYs.

86 As stated in paragraph 10, in accordance with the plans approved by CDR in May 2023, costs for Spanish interpretation and Recording Secretaries working in Spanish at meetings have to be added to the Budget as of FY 2024-2025 (reflected in Art. 12). In Annex II these costs were projected at € 55,000 in total for the meetings of the SC, CGAP and CDR, with € 10,000 of a VC used to offset some of these costs (reflected in Art. 21b), bringing the effective costs to be covered through the Budget for FY 2024-2025 to € 45,000. However, as explained in paragraph 10 and in footnote 10, for FY 2024-2025 these costs are expected to be approximately € 19,000 lower than envisaged and reflected in Annex II.

87 This approved Budget for FY 2024-2025 also includes costs for 24 days of Experts’ Group or Working Group meetings relating to normative work at the PB. These meeting days at the PB may generate additional costs (see Art. 13 for details). As in previous FYs, the PB will do its best to limit staff overtime, and it has projected a lower amount for these costs in FY 2024-2025 (€ 125 per meeting day). Any governance related meeting days to be held at the PB generally do not generate meeting costs.

a. Article 12, Off-site meetings (Hague Academy)

CGAP

Article 12a, Venue

88 Compared to the Budget for FY 2023-2024, this article increases by € 10,550 (as opposed to € 12,000 in Draft Budget 1). This article covers setting-up and dismantling costs, the rent of the large meeting room in the Hague Academy building, the interpretation booths for three languages and other equipment, workspaces for staff, two additional meeting rooms, service costs at the venue (all under the new, higher fee structure for FY 2024-2025), as well as the costs for technical support to enable online participation. Rental costs for CGAP are budgeted on a model with one day for set-up, 3.5 meeting days, and a half day for breakdown time (costs are for five days in total).

Article 12b, Interpretation (English, French, and Spanish)

89 This article increases by € 11,700. It covers interpretation costs for six interpreters at a 3.5-day CGAP meeting. Interpretation costs have mainly increased due to two new interpreters required for Spanish interpretation to ensure proper composition of interpretation teams (on the reason for budgeting for in-person interpretation for CGAP 2025, see fn. 10).

Article 12c, Additional personnel / moving

90 This article increases by € 4,700 mainly in order to hire two additional Recording Secretaries for Spanish. It covers overtime expenses of some administrative staff members of the PB, costs for six Recording Secretaries during this meeting, as well as costs for movers. The PB is no longer hiring additional personnel for catering and other assistance during the CGAP meeting. The new process put in place by the PB for preparing the minutes of CDR meetings cannot be applied to CGAP

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meetings; as CGAP meetings last longer, the PB needs to hire a team of Recording Secretaries to rotate.

CDR

Article 12d, Venue

91 Compared to the Budget for FY 2023-2024, this article decreases by € 9,500 (as opposed to increasing by € 5,050 in Draft Budget 1), following CGAP’s recommendation and CDR’s approval to hold CDR 2025 in person at the premises of the PB, with the possibility of online participation and online simultaneous interpretation.33 While costs remain subject to confirmation depending on available interpreters and fees, when using the current pricing scheme for interpreters as a model, it is estimated that € 17,050 will be saved by holding the CDR meeting at the premises of the PB and by providing remote interpretation. It will, therefore, not be necessary to rent the large meeting room in the Hague Academy Building, interpretation booths for three languages and other equipment, and pay for other service costs at the Hague Academy in FY 2024-2025.

Article 12e, Interpretation (English and French)

92 Compared to the Budget for FY 2023-2024, this article decreases by € 1,050 (as opposed to increasing by € 2,100 in Draft Budget 1), following CGAP’s recommendation and CDR’s approval to hold CDR 2025 in person at the premises of the PB, with the possibility of online participation and online simultaneous interpretation.34 It covers interpretation costs for four interpreters, including one new interpreter for Spanish interpretation to ensure proper composition of interpretation teams.

Article 12f, Additional personnel / moving

93 This article decreases by € 200. The article includes overtime expenses of some administrative staff members of the PB, and costs for only one Recording Secretary during the CDR meeting (compared to two in the current FY).

SC and other meetings

Article 12g, Venue

94 This article decreases by € 19,250 based on CGAP’s plans to hold one SC meeting (see paras 11, 15, and 84-85).

95 This article covers setting-up and dismantling costs, the rent of the large meeting room in the Hague Academy Building, the interpretation booths for three languages and other equipment, workspaces for staff, two additional meeting rooms, as well as the costs for technical support to enable online participation. The costs are based on the 2023 pricing scheme (see para. 85) for a SC meeting on the practical operation of the Service, Evidence, and Access to Justice Conventions based on a model with one day for set-up, 3.5 meeting days, and a half day for breakdown time (costs are for five days in total).

96 The PB will continue to strictly assess the use of any extra meeting spaces during these meetings for use only when absolutely necessary.

33 See para. 4 above, referring to CGAP 2024, C&D No 69, fn. 10, and para. 14. 34 Ibid.

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Article 12h, Interpretation

97 This article decreases by € 10,650 (compared to increasing by € 1,850 in Draft Budget 1 and Draft Budget 2) as a result of a change in interpretation provisions for this meeting. While the PB had previously envisaged in-person interpretation for this meeting, it has been able to establish a team of interpreters to conduct this work mainly online and remotely. It covers interpretation costs for six interpreters at a 3.5-day SC meeting on the Service, Evidence, and Access to Justice Conventions.35

Article 12i, Additional personnel / moving

98 This article increases by € 1,250 mainly in order to hire two additional Recording Secretaries for Spanish. It covers overtime expenses of some administrative staff members of the PB, costs for six Recording Secretaries during this meeting, as well as costs for movers. The PB is no longer hiring additional personnel for catering and other assistance during this meeting. The new process put in place by the PB for preparing the minutes of CDR meetings cannot be applied to SC meetings; as SC meetings last longer, the PB needs to hire a team of Recording Secretaries to rotate.

Article 13 On-site meetings (PB)

99 This article remains unchanged. These costs mainly cover overtime expenses of some administrative staff members of the PB during meetings of Working / Experts’ Groups. As stated in paragraph 87, costs are projected based on 24 meeting days at the PB. As a result of its strict overtime policy and efforts to limit overtime, these costs are now estimated at € 125 per day.

100 Any meeting days related to governance matters are generally not expected to generate additional costs.

b. Article 14, Other costs relating to HCCH meetings

Article 14a, Supplies, refreshments and facilitation costs

101 This article increases by € 2,700.36 This article is also used to cover costs for the supplies and materials (incl. folders, badges, USB sticks) used and distributed at any of the HCCH meetings (incl. seminars). Additionally, during HCCH meetings and other events, light working lunches and, dinners (incl. for Drafting Committees) are sometimes covered through this article. This article increasingly also has to be used in relation to meetings taking place at the PB (incl. meetings of Experts’ and Working Groups).

Article 14b, Travel consultants and external experts

102 This article remains unchanged. It may be used to offset (some) travel costs for external experts who contribute to the work of the HCCH, such as experts chairing Working / Experts’ Group meetings and whose costs are not covered by their relevant authorities. In light of significantly increased travel costs, this article has effectively decreased for a number of years. This article is used for both off-site and on-site meetings. As in previous years, the PB does not use assessed contributions to cover any travel / hotel costs of participants who otherwise could not afford to attend HCCH meetings.

35 See fn. 10. 36 It should be recalled that since March 2020, with a view to saving costs, coffee / tea is no longer provided for free during

CGAP and SC meetings (this also allows for some cuts in Art. 12c and 12i). Refreshments are made available for purchase from a caterer.

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3. Present and future pension liabilities

a. Article 15, Retirement or survivors’ pensions

103 Compared to the Budget for FY 2023-2024, this article increases by € 44,500 (as opposed to € 53,100 in Draft Budget 1)37 to cover the full, mandatory contribution of Member States to the pension schemes currently in force at the HCCH. As is the case for salaries, this increase is imposed by the HCCH’s regulatory framework, and thus beyond the SG’s discretion.

104 This article is determined in direct correlation with Article 1a. It has to represent 23.6% of salaries for those staff members who fall under the Co-ordinated Pension Scheme (COPS), and 18.8% of salaries for those staff members who fall under the New Pension Scheme (NPS) (as per the rules that govern these pension schemes). There are 12 active staff members who fall under the COPS, and 16 staff members who fall under the NPS.

105 Currently, the HCCH has 11 pensioners (all under the COPS).

106 Pension costs relating to both COPS and NPS are currently financed through the contributions of staff, the payments of the accrued unfunded liabilities, the return on the investments of the Pension Reserve Fund (PRF), and Article 15 of the Budget which represents the Organisation’s (employer’s) contributions to the pension schemes (Art. 15 covers present and future liabilities).

107 It is recalled that the Organisation is required to provide pension benefits to all eligible staff or former staff of the Organisation under the pension schemes currently in force, and that all Member States must cover the costs relating to present and future pension liabilities, independently of when they became a Member of the HCCH and whether or not they had or still have to pay their full share of the accrued unfunded liabilities (see the explanations at the bottom of the Budget reflected in III., and Overviews I and II following the Budget).

b. Article 16, Pension administration by the ISRP

108 This article decreases by € 700. It covers current costs for the verification and administration of pensions for all officials and retirees of the HCCH by the ISRP.

B. Revenues

1. Article 17, Contribution of Member States

109 Compared to the Budget for FY 2023-2024, this article increases by € 251,393 (as opposed to € 272,393 in Draft Budget 2 and € 325,343 in Draft Budget 1). It reflects the total assessed contribution of all Member States to cover the operating budget of the HCCH (i.e., costs relating to the Operation of the PB, International Meetings, and Present and Future Pension Liabilities). The total assessed contributions from Member States are 5.16% higher than in the previous FY. The value of one budgetary unit and the full amounts to be paid by each Member State are briefly explained below under F (see paras 122 et seq.; see also the explanations at the bottom of the Budget reflected in III., and Overviews I and II following the Budget).

110 The approved Budget for FY 2024-2025 is based on a total of 640.5 units (see also paras 32-34). The increase per unit amounts to € 392.49 or 4.99% (for more details on the overall results, see paras 35-37).

37 The lower increase compared to Draft Budget 1 is mainly due to the non-transfer of the iSupport position to the Budget.

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2. Article 18, Allocation of reserves from FY 2022-2023

111 To partially offset the increase in operational expenses, in May 2024, CDR approved that an amount of € 72,000 be used from the net operational surplus from FY 2022-2023 as additional revenue in the Budget for FY 2024-2025.38

112 This approach also allows for part of the surplus to be redistributed to Member States by lowering Member States’ assessed contribution for FY 2024-2025 by € 72,000, without undertaking the time and resource-intense burden of calculating, setting up and executing reimbursements by way of more than 90 bank transfers of relatively low amounts.

3. Article 19, Contribution of Member Organisation

113 This article remains unchanged. It relates to the membership of the EU. According to Article 9(2) of the Statute of the HCCH, a Member Organisation is not required to contribute in addition to its Member States to the annual Budget of the HCCH but pays a sum to be determined by the HCCH, in consultation with the Member Organisation, to cover additional administrative expenses arising out of its membership. The amount is generally determined for a period of three FYs. The current amount of € 39,000 was agreed on in 2022 for application as of FY 2022-2023.

4. Article 20, Income derived from sales of publications

114 This article increases by € 3,000. While in the last FYs the revenue generated under this article has exceeded the budgeted amounts (in particular in relation to sales of the Practical Handbooks on the Service and Evidence Conventions), the SG continues to prefer to take a cautious approach for the projection of income derived from the sale of publications as the revenue fluctuates and is by no means guaranteed. Nonetheless, given that the projections of sales also include the release of the new editions of the Practical Handbooks on the Service and Evidence Conventions in the next FY, this increase can be justified. The sales of these publications remain a significant source of revenue for the HCCH.

C. VCs for the implementation of Spanish

1. Article 21a, VC for Spanish translations in FY 2023-2024

115 In May 2023 CDR approved the use of VCs of € 25,000 to support the implementation of Spanish over two FYs. Spain and Mexico then made VCs to cover this amount during the course of FY 2023- 2024 (see paras 6a, and 8-10). Therefore, the use of € 15,000 from VCs is reflected in Article 21a of the presentation of the Budget for FY 2023-2024 in this document (see also Annex II).

2. Article 21b, VC for Spanish interpretation in FY 2024-2025

116 This article reflects the use of € 10,000 of VCs from Spain and Mexico to support the implementation of Spanish as an official language, as approved by CDR in May 2023. It is to be used to offset new costs related to Spanish interpretation and Recording Secretaries working in Spanish (see paras 6a and 10, as well as Annex II).39

38 Although this amount is presented as revenue for ease of reference, it should be noted that under applicable accounting

principles, it does not technically qualify as revenue or income; thus, following consultations with the HCCH auditors, this amount will be processed as an allocation of a previous surplus using reserves from the financial statements of FY 2022- 2023.

39 The announcement by Spain of an additional VC, likely to be made in the course of 2024, would help to accelerate the implementation of Spanish (incl. the translation of historic documents and various HCCH regulations), and to finance actions towards the implementation of Spanish that were not envisaged originally (e.g., offering simultaneous interpretation at the recent CGAP 2024 meeting, or a reception during the SC in July 2024, which will coincide with the actual entry into force of Spain as an additional official language).

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D. Other VCs

1. Article 22a, VC from Members

117 This article was introduced following the entry into force of the 2016 Fin. Regs. Under Article 5(2)(iii) “any other income, including monetary VCs communicated to the PB in writing, donations and revenues of a regular nature” shall be included in the Budget. In order to provide Members with up- to-date information on all VCs received during the FY from Member States, the PB provides an overview of all VCs received on a monthly basis.40 For presentation this article has been split into two sections as of the Budget for FY 2024-2025 (related to contributions for Members and non- Members).

2. Article 22b, VCs from non-Members

118 This article was introduced following the entry into force of the 2016 Fin. Regs. Under Article 5(2)(iii) “any other income, including monetary VCs communicated to the PB in writing, donations and revenues of a regular nature” shall be included in the Budget. In order to provide Member States with up-to-date information on all VCs received during the FY from non-Members, the PB provides an overview of all VCs received on a monthly basis.41 For presentation this article has been split into two sections as of the Budget for FY 2024-2025 (related to contributions for Members and non-Members).

E. Accrued unfunded pension liabilities (Art. 23)

119 This article remains unchanged. Contrary to the present and future pension liabilities, which are to be paid by all Member States, the accrued unfunded pension liabilities are to be paid only by States that were Members on or prior to 1 July 2010 and which have not yet paid off their full share of these liabilities (see CDR decision dated 6 July 2010).42 Payments for accrued unfunded pension liabilities are made in addition to assessed contributions. The remaining annual amount of the accrued unfunded liabilities to be paid, € 197,394, will be divided among the Member States that continue to pay their share in these costs annually (347.5 units, i.e., € 568.04 per unit).

120 Importantly, while Austria, Brazil, Georgia, Poland, and the Russian Federation have been reclassified under the UPU system in recent years, these reclassifications do not affect these States’ payment of their respective share of accrued unfunded pension liabilities. These shares were established in a fixed repayment scheme by CDR in 2010 and cannot be changed. Until these States have paid their full share of accrued unfunded pension liabilities, the PB will have to apply two different unit schemes to calculate these States’ full contribution to the Budget.

121 Despite appearing after Revenues in the Budget, the accrued unfunded pension liabilities are an additional expense. They are listed at the end of the Budget because they do not have to be paid by all Member States. The total of Article 22 (€ 197,394) added to the total of Expenses (€ 5,064,650), equals the total Budget / total revenues at the end of Revenues (€ 5,262,044).

F. Explanation of contributions to be paid by Member States: Overview I and Overview II

122 The following provides a brief explanation of the two schemes applied to the calculation of Member States’ contributions.

40 Available at https://www.hcch.net/en/secure-portal/governance1/voluntary-contributions. 41 Available at https://www.hcch.net/en/secure-portal/governance1/voluntary-contributions. 42 34% of Member States have paid off their share of the accrued unfunded liabilities.

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123 Overview I lists the total (incl. the accrued unfunded liabilities mentioned in para. 119) contributing share of each State that was a Member on or prior to 1 July 2010 and that has not yet paid off its full share in the accrued unfunded pension liabilities. In other words, in addition to their annual contribution to the operating Budget (incl. the present and future pension liabilities), they must also pay their annual share in the total accrued unfunded pension liabilities. The contribution to the operating Budget (incl. the present and future pension liabilities), € 2,653,160, is divided by 345 units; the contribution to accrued unfunded liabilities, € 197,394, is divided by 347.5 units. The total in Overview I is € 2,850,554. The total per unit is € 8,258.36 (except for the five States mentioned in para. 120).

124 Overview II lists the total contributing share of each State that was a Member on or prior to 1 July 2010 and that has paid off its full share in the accrued unfunded pension liabilities, or that became a Member after 1 July 2010 (and thus does not have to pay for accrued unfunded pension liabilities at all). These Member States only contribute to the operating Budget (incl. the present and future pension liabilities). The total, € 2,272,490, is to be divided by 295.5 units which equals € 7,690.32 per unit.

125 Each Member State’s contribution is listed in either Overview I or in Overview II, and Member States are invited to refer to their respective Overview for this information.

A N N E X E S

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Annex I – Fund Overview and Projections 1 As a result of the application of Dutch Generally Accepted Accounting Principles (GAAP) to the operational Budget of the HCCH (CDR decision taken in

2017), the previously used system of provisions was abandoned and instead converted into a system of reserve funds. The five funds identified in the table below have been established for operational expenses that will be incurred in all these areas. Actual expenses in the fields covered by the respective funds are difficult to predict as they are subject to factual developments that may or may not occur. The fund structure, accompanied by targets (limits) for each of the funds and the recognition that the funds may have to be replenished at the end of an FY, allows for more stable budgeting towards these expenses.

2 Due to the reassessment of targets for the funds decided in 2019, some funds may temporarily have higher balances than targeted. Dutch GAAP accounting principles do not allow for fund appropriations adopted by CDR to run through the income statement again (i.e., they cannot be included in the Budget again). Therefore, subject to the actual balance of funds, reappropriation between funds (cross-funding) has been used as a mechanism to rebalance funds, and it may continue to be used for future FYs. When the overall balances of the funds do not allow for the cross-funding approach, top- ups from the Budget will be required to meet the targets. Given the current levels of funds and expected expenses to be covered by the funds in the current FY, no cross-funding is foreseen in FY 2024-2025. Top-ups may be necessary in future FYs.

Established / continous Funds Relocation Staff Rules Office maintenance /

equipment IT / equipment Recueil

Minimum target for Funds 30,000.00 125,000.00 25,000.00 22,500.00 15,000.00

Balance at 30 June 2022 44,436.00 116,173.00 44,114.00 27,528.00 20,180.00 CDR approved appropriations from budget FY 22-23 - - - - - CDR approved reappropriations from other funds (cross-funding) FY 22-23 7,100.00 -7,100.00 Expenses covered FY 22-23 -24,017.00 -1,366.00 -6,979.00 -11,713.00 -

Balance at 30 June 2023 27,519.00 114,807.00 30,035.00 15,815.00 20,180.00

CDR approved appropriations to be added from budget FY 23-24 - 25,000.00 - - - CDR approved reappropriations from other funds (cross-funding) FY 23-24 9,060.00 - - - -9,060.00 Estimated expenses to be covered FY 23-24 - -15,000.00 -5,000.00 - -

Expected balance at 30 June 2025 after reappropriation, top-up or expenses in FY 23-24 36,579.00 124,807.00 25,035.00 15,815.00 11,120.00

Difference between target and Fund -6,579.00 193.00 -35.00 6,685.00 3,880.00

Proposed Fund reappropriations in FY 24-25* - - -

Proposed top-up from Budget FY 24-25 to reach target** - - - - -

Expected balance at 30 June 2025 36,579.00 124,807.00 25,035.00 15,815.00 11,120.00

Annex I – Fund Overview and Projections

31

3 It should be noted that when considering technical fund accounting, fund additions and withdrawals materialise only one year after the actual expenses are incurred and once they have been processed through the income statement. For example, an expense that materialised in the course of FY 2022- 2023 would only be covered by the relevant fund (withdrawn) in FY 2023-2024. Similarly, replenishment of a fund through the Budget would only materialise (i.e., be credited to the fund) in the subsequent FY.

The minimum targets for each of the funds

Fund Relocation

4 This Fund should be sufficient to cover two to three relocations (and related expenses) per FY. This could relate to either staff arrivals or departures. Expenses may vary depending on entitlements (incl. family situations) of staff.

5 The minimum target for this Fund is set at € 30,000. No payment to this Fund is envisaged through the Budget for FY 2024-2025.

Fund Staff Rules

6 This Fund includes a sub-fund of € 32,500, as per the CDR decision in May 2021, which is ring-fenced and only to be used for a loss of employment indemnity, if materialised.1

7 Additionally, approximately € 60,000 is held to mitigate the risk of unknown and exceptionally high expenses in the event dispute procedures or indemnity payments (above the ring-fenced amount) are required. Other expenses covered from the Staff Rules Fund as elaborated in the notes relating to Article 1e of the Budget are also covered through this Fund.

8 The minimum (total) target for this Fund was increased from € 100,000 to € 125,000 by CDR in May 2023, in order to compensate for costs that could arise as a result of not hiring a new Head of HR in FY 2023-2024. No payment to this Fund is envisaged through the Budget for FY 2024-2025.

Fund Office maintenance / equipment

9 This Fund needs to cover expenses to maintain the office and office equipment in a functional state. It also serves to cover any repairs to the equipment, furniture and office space.

10 The minimum target for this Fund is set at € 25,000. No payment to this Fund is envisaged through the Budget for FY 2024-2025.

1 In the hypothetical case of an Official at Grade A2, who is not entitled to any allowances (e.g., family and / or child allowance) and who has been with the Organisation for any term between

five and 10 years, the amount would reach approx. € 42,000. Based on the actual staff data of the PB (incl. number of years spent at the PB), there is, however, a strong likelihood that a possible indemnity would be (significantly) higher. The ring-fenced amount may thus have to be increased in the future.

Annex I – Fund Overview and Projections

32

Fund IT / equipment

11 This Fund covers maintenance of the IT environment to ensure security and compliance with adequate standards. This includes periodic updates and investments for key infrastructure and equipment, if and when required.

12 The minimum target for this Fund is € 22,500 given how crucial the IT infrastructure is to the operation of the PB in the current working environment, in particular as regards teleworking and videoconferencing. No payment to this Fund is envisaged through the Budget for FY 2024-2025.

Fund Recueil

13 This Fund covers the cost for the publication and possible reprints of the Collection of HCCH Instruments (Recueil).

14 The minimum target for this Fund is € 20,000. The Fund remains at a sufficient level for FY 2024-2025 and would allow for a full reprint of the 2020 edition of the Recueil if needed, as well as making savings for the next edition. No payment to this Fund is envisaged through the Budget for FY 2024- 2025.

33

Annex II – Overview of the costs relating to the implementation of Spanish as an Official Language over the next three FYs (as presented in Annex II of the approved Budget for FY 2023-2024)

Note inserted in April 2024 (see also the comments above in footnote 10):

While the figures presented in this Annex were based on an online interpretation model for Spanish, the approved Budget for FY 2024-2025 is based on in-person interpretation costs in English, French, and Spanish at CGAP 2025, and online interpretation costs in English, French, and Spanish at the SC meeting to be held in July 2024. The net result is that the costs for phase two of implementing Spanish will be approximately € 19,000 lower than envisaged in this Annex. This is mainly due to the change in interpretation models provided at each meeting, and the format for the CDR 2025 meeting, which will be held in person at the premises of the PB, with online interpretation. This format is significantly more cost- effective than an in-person CDR meeting at the Hague Academy Building with in-person interpretation. Additionally, the PB is implementing a new, more cost-effective process for the production of the CDR minutes (this process cannot be implemented for SC and CGAP meetings which last longer and thus require a team of Recording Secretaries).

1. As decided by CGAP during its meeting in March 2023, with the financial implications approved by CDR during its meeting in May 2023, Spanish will become an additional official language on 1 July 2024 (i.e., when translation, administrative support, and interpretation can all be offered).

2. This Annex provides a general overview of the costs relating to the implementation of Spanish as an additional official language over the next three FYs. This overview is presented following (i) the initial proposal annexed to Draft Zero Budget (a proposal which amounted to € 510,000), (ii) the further proposal annexed to Draft Budget 1 (€ 151,500), and (iii) the proposal reflected in Prel. Doc. No 19 bis for CGAP 2023 (€ 139,000).

3. This overview is based on the assumption that the PB would receive € 25,000 in the form of voluntary contributions for the introduction of Spanish in 2023, of which € 15,000 would be used in FY 2023-2024, and € 10,000 in FY 2024-2025.

4. Caveat: The figures are subject to adjustments, in particular inflation, costs for licenses, the Work Programme decided by CGAP (incl. the number of SC meeting days), the further experience with online simultaneous interpretation as well as fees for interpreters, and the need for external translations. The PB will provide Member States with any information that becomes available in this regard for subsequent FYs.

FY 2023-2024 (reflected in this Approved Budget)

Software € 19,000 (reflected in Art. 3b)

PB positions € 22,500 (reflected in Art. 1a)

External translations € 38,500 of which € 15,000 would be absorbed by voluntary contributions; thus to be absorbed by Budget: € 23,500 (reflected in Art. 6b)

Printing € 2,500 (reflected in Art. 4a)

Total for Budget € 67,500

FY 2024-2025

The above costs of € 67,500 would be included in the baseline of this Budget.

Annex II – Overview of the costs relating to the implementation of Spanish as an Official Language over the next three FYs (as presented in Annex II of the approved Budget for FY 2023-

2024)

34

In addition, the following costs would be included for Spanish:

External Translations € 15,000 (to absorb the costs covered by voluntary contributions in 2023-2024) (if no further voluntary contributions received)

Simultaneous Interpretation & Recording Secretaries (8 days) € 55,000, of which € 10,000 would be absorbed by voluntary contributions; thus to be absorbed by Budget: € 45,000

Total additional costs for Budget € 60,000

[Total Budget costs for 2023-2025 € 127,500]

FY 2025-2026

The above costs of € 127,500 would be included in the baseline of this Budget. In addition, € 10,000 would have to be included to absorb the costs covered by voluntary contributions in 2024-2025. The recurrent costs for Spanish to be paid by the Budget would as of then amount to € 137,500 (but only € 10,000 of which would constitute a further increase of the Budget for 2025-2026). Thus, the full costs for the introduction of Spanish would only have to be covered exclusively by the Budget as of the third FY (2025-2026).

The Secretary General

Hague Conference on Private International Law Conférence de La Haye de droit international privé [email protected] www.hcch.net

Regional Office for Asia and the Pacific (ROAP) Bureau régional pour l’Asie et le Pacifique (BRAP) Regional Office for Latin America and the Caribbean (ROLAC) Bureau régional pour l’Amérique latine et les Caraïbes (BRALC)

His Excellency Mr Lauri Kuusing Ambassador of Estonia Embassy of the Republic of Estonia Zeestraat 92 2518 AD THE HAGUE

Our Ref.: 20240625LJM01 The Hague, 25 June 2024

Dear Mr Ambassador,

Following the adoption of the Budget for Financial Year 1 July 2024 – 30 June 2025 (Financial Year 70) by the Council of Diplomatic Representatives (CDR) at its meeting of 21 May 2024, I am pleased to send you a copy of the final Budget as adopted. I refer to Overview I for your State’s contribution for Financial Year 2024-2025, which amounts to

€ 8,258.36 The attached invoice of assessed contributions provides the total contribution to be paid by your State for Financial Year 2024-2025. According to Article 9(1) of the Regulations on Financial Matters and Budgetary Practices adopted on 1 January 2016, “[a]ssessed Contributions from Member States are due in full at the beginning of each Financial Year [i.e., on 1 July], and are required to be paid as soon as possible”. Against this background, I take the liberty of requesting that every effort be made to ensure your State’s prompt payment of its contribution in order to avoid any disruption of the Permanent Bureau’s operations in the coming weeks and months. Your efforts in this regard are greatly appreciated.

Furthermore, according to Article 11(1) of the same Regulations, “the Secretary General shall regularly inform the Council of Diplomatic Representatives of the status of payments of contributions”. As reflected in the attached overview of contributions, 17 Member States (19%) still have outstanding payments due for Financial Year 2023-2024, amounting to € 397,595.47 (8% of the total of assessed contributions for that Year). When the arrears from previous financial years, amounting to € 99,828.72, are added, the total of outstanding payments amounts to € 497,424.19. I am pleased to stress that Estonia is not among the Member States with arrears and I am most grateful for your State’s diligence in this regard. Still, the amount of outstanding payments is a matter of concern and puts the operation of the Permanent Bureau at a serious, short-term risk. If no contributions are received in the next few weeks, the Permanent Bureau will have to start using the Revolving Fund as of July 2024.

2

It is recalled that the Revolving Fund can only finance two full months of the Permanent Bureau’s basic operations. States are thus strongly encouraged to pay any outstanding amounts as swiftly as possible.

I avail myself of this opportunity to renew to Your Excellency assurances of my highest consideration.

Dr Christophe Bernasconi Attachments mentioned.

Legend

Contribution FY69

8.16% 397,595.47 Arrears of 1 year (FY68)

Arrears of 2 years or more

Advance payment FY70

8.73% 497,424.19 *based on Overview I/II respectively

7,865.87 Bank fees / balances Advance payment Outstanding

7,297.83 under €500 to be received for contribution to pay

1 unit * added to invoice FY70 2024-2025 by 30 Jun 2024

ALBANIA 1 2023-2024 7,865.87 7,863.37 2.50 -

ANDORRA 1 2023-2024 7,297.83 7,297.83 -

ARGENTINA 3 2023-2024 23,597.60 23,597.36 0.64 -

0.24

2022-2023 21,532.16 17.40

3,116.00

18,398.76

ARMENIA 1 2023-2024 7,297.83 7,297.83 -

AUSTRALIA 20 2023-2024 157,317.31 157,305.31 12.00 -

AUSTRIA 6 2023-2024 46,627.15 46,627.15 -

AZERBAIJAN 1 2023-2024 7,297.83 7,297.83 -

BELARUS 1 2023-2024 7,865.87 7,865.87 -

BELGIUM 15 2023-2024 109,467.38 109,467.38 -

BOSNIA-HERZEGOVINA 1 2023-2024 7,865.87 7,865.87 -

BRAZIL 10 2023-2024 84,339.06 84,339.06 -

2022-2023 77,454.28 77,358.57

95.71

BULGARIA 3 2023-2024 23,597.60 23,597.60 -

BURKINA FASO 0.5 2023-2024 3,648.91 3,648.91 12,638.86 -

CANADA 33 2023-2024 240,828.23 240,828.23 -

CHILE 3 2023-2024 23,597.60 23,597.60

CHINA 33 2023-2024 240,828.23 240,828.23 -

COSTA RICA 1 2023-2024 7,297.83 2,223.07 469.91 -

5,074.76

CROATIA 1 2023-2024 7,297.83 7,297.83 -

CYPRUS 1 2023-2024 7,865.87 7,865.87 -

CZECH REPUBLIC 5 2023-2024 39,329.33 39,329.33

DENMARK 10 2023-2024 72,978.25 72,978.25 -

2022-2023 66,093.47 66,093.47

2021-2022 64,623.48 64,623.48

DOMINICAN REPUBLIC 1 2023-2024 7,297.83 7,297.83 400.00 -

2022-2023 6,609.35 6,309.26

2021-2022 6,462.35 6,378.73

83.62

300.09

ECUADOR 1 2023-2024 7,865.87 1,543.37 6,322.50

EGYPT 5 2023-2024 39,329.33 39,329.33

2022-2023 35,886.94 35,886.94

2021-2022 35,151.94 35,151.94

EL SALVADOR 1 2023-2024 7,297.83 7,297.83 -

ESTONIA 1 2023-2024 7,865.87 7,865.87 -

FINLAND 10 2023-2024 72,978.25 72,978.25 -

FRANCE 33 2023-2024 259,573.55 259,573.55 -

GEORGIA 1 2023-2024 7,581.85 7,581.85 -

GERMANY 33 2023-2024 240,828.23 240,828.23 -

GREECE 3 2023-2024 23,597.60 23,597.60 -

HONDURAS 1 2023-2024 7,297.83 3.00 7,294.83

HCCH ASSESSED CONTRIBUTIONS AND ARREARS - FINANCIAL YEAR 2023 - 2024 (FY69)

TOTAL OUTSTANDING PAYMENTS FOR CURRENT AND

PREVIOUS FYs

OUTSTANDING PAYMENTS FOR FY69 (2023-2024)

Members Units FY Payment received

June 2024

7,865.87 Bank fees / balances Advance payment Outstanding

7,297.83 under €500 to be received for contribution to pay

1 unit * added to invoice FY70 2024-2025 by 30 Jun 2024

HUNGARY 5 2023-2024 39,329.33 39,329.33

ICELAND 1 2023-2024 7,297.83 7,297.83

INDIA 20 2023-2024 157,317.31 157,243.31 74.00 -

2022-2023 143,547.75 143,535.75

12.00

IRELAND 5 2023-2024 36,489.13 36,489.13 -

ISRAEL 3 2023-2024 23,597.60 23,597.60 -

ITALY 27 2023-2024 197,041.28 197,041.28 -

JAPAN 33 2023-2024 259,573.55 259,573.55 -

JORDAN 1 2023-2024 7,865.87 7,865.87 -

KAZAKHSTAN 1 2023-2024 7,297.83 7,297.83 -

KOREA (REPUBLIC OF) 15 2023-2024 117,987.98 89,292.30 -

28,695.68

LATVIA 1 2023-2024 7,865.87 7,865.87 -

LITHUANIA 1 2023-2024 7,297.83 7,297.83 -

LUXEMBOURG 3 2023-2024 23,597.60 23,597.60 -

MALAYSIA 3 2023-2024 23,597.60 23,597.60 -

MALTA 1 2023-2024 7,297.83 7,297.83

MAURITIUS 1 2023-2024 7,297.83 7,297.83 -

MEXICO 10 2023-2024 72,978.25 72,978.25 -

MOLDOVA 1 2023-2024 7,297.83 7,297.83 -

MONACO 1 2023-2024 7,297.83 7,297.83 -

MONGOLIA 1 2023-2024 7,297.83 6,697.20 600.63

MONTENEGRO 1 2023-2024 7,865.87 7,865.87 -

2022-2023 7,177.39 7,177.39

2021-2022 7,030.39 7,030.29

0.10

MOROCCO 5 2023-2024 39,329.33 39,329.33 -

NAMIBIA 1 2023-2024 7,297.83 7,297.83 -

2022-2023 6,609.35 6,609.35

2021-2022 6,462.35 6,462.35

2020-2021 2,636.19 2,636.19

RF 972.16 972.16

NETHERLANDS 15 2023-2024 109,467.38 109,467.38 -

NEW ZEALAND 5 2023-2024 39,329.33 39,329.33 -

NICARAGUA 1 2023-2024 7,297.83 7,297.83 -

NORTH MACEDONIA 1 2023-2024 7,865.87 7,865.87 -

NORWAY 10 2023-2024 78,658.65 78,658.65 -

PANAMA 1 2023-2024 7,297.83 7,297.83 7,453.87 -

PARAGUAY 1 2023-2024 7,297.83 3,387.81 3,910.02

PERU 1 2023-2024 7,865.87 7,109.84 756.03

2022-2023 7,177.39 63.57

7,021.84

91.98

PHILIPPINES 1 2023-2024 7,297.83 7,285.83 12.00 -

2022-2023 6,609.35 6,597.35

12.00

POLAND 6 2023-2024 46,627.15 46,627.15 -

PORTUGAL 5 2023-2024 36,489.13 36,489.13 -

ROMANIA 3 2023-2024 21,893.48 21,893.48

2022-2023 19,828.04 19,828.04

RUSSIA 20 2023-2024 154,477.10 154,477.10

2022-2023 107,660.81 97,800.81

9,594.92

265.08

SAUDI ARABIA 20 2023-2024 145,956.50 145,956.50 -

SERBIA 1 2023-2024 7,865.87 7,865.87 -

Members Units FY Payment received

June 2024

7,865.87 Bank fees / balances Advance payment Outstanding

7,297.83 under €500 to be received for contribution to pay

1 unit * added to invoice FY70 2024-2025 by 30 Jun 2024

SINGAPORE 4 2023-2024 29,191.30 29,191.30 -

SLOVAK REPUBLIC 3 2023-2024 21,893.48 21,893.48 -

SLOVENIA 1 2023-2024 7,865.87 7,865.87 -

SOUTH AFRICA 10 2023-2024 78,658.65 78,658.65 -

SPAIN 25 2023-2024 196,646.63 196,646.63 -

SRI LANKA 3 2023-2024 21,893.48 21,893.48 -

2022-2023 19,828.04 19,828.04

2021-2022 19,387.04 19,387.04

SURINAME 1 2023-2024 7,865.87 69,382.23

2022-2023 7,177.39

2021-2022 7,030.39

2020-2021 6,894.89

2019-2020 6,929.43

2018-2019 6,853.34

2017-2018 6,835.16

2016-2017 6,797.50

2015-2016 6,541.51

2014-2015 6,456.75

SWEDEN 15 2023-2024 117,987.98 117,987.98 -

SWITZERLAND 15 2023-2024 117,987.98 117,987.98 -

THAILAND 3 2023-2024 21,893.48 21,893.48 -

TUNISIA 5 2023-2024 36,489.13 36,489.13 -

TÜRKİYE 5 2023-2024 39,329.33 39,329.33 -

UKRAINE 5 2023-2024 39,329.33 39,329.33 -

2022-2023 35,886.94 35,886.94

UNITED KINGDOM 33 2023-2024 240,828.23 240,828.23 -

UNITED STATES OF AMERICA 33 2023-2024 259,573.55 109,068.00 -

150,505.55

URUGUAY 3 2023-2024 23,597.60 23,597.60

2022-2023 21,532.16 21,532.16

UZBEKISTAN 1 2023-2024 7,297.83 7,297.83 -

VENEZUELA 1 2023-2024 7,297.83 7,297.83

VIET NAM 1 2023-2024 7,297.83 7,297.83 -

ZAMBIA 1 2023-2024 7,297.83 45,610.19

2022-2023 6,609.35

2021-2022 6,462.35

2020-2021 6,326.85

2019-2020 6,361.39

2018-2019 6,285.30

2017-2018 6,267.12

CONTRIB 2014-2024 5,697,639.26 5,200,215.07 100.50 20,963.28 497,323.69

Members Units FY

8.73% 497,424.19 TOTAL OUTSTANDING PAYMENTS FOR

CURRENT AND PREVIOUS FYs

Payment received

June 2024

OUTSTANDING PAYMENTS FOR FY69 (2023-2024) 397,595.47 8.16%

(out of total MS contribution FY69) 4,871,651.00

TO BE PAID FY 68 13,786.74

Suriname 7,177.39

Zambia 6,609.35

TOTAL 13,786.74

TO BE PAID FY 67 13,492.74

Suriname 7,030.39

Zambia 6,462.35

TOTAL 13,492.74

TO BE PAID FY 66 13,221.74

Suriname 6,894.89

Zambia 6,326.85

TOTAL 13,221.74

TO BE PAID FY 65 13,290.82

Suriname 6,929.43

Zambia 6,361.39

TOTAL 13,290.82

TO BE PAID FY 64 13,138.64

Suriname 6,853.34

Zambia 6,285.30

TOTAL 13,138.64

TO BE PAID FY 63 13,102.28

Suriname 6,835.16

Zambia 6,267.12

TOTAL 13,102.28

TO BE PAID FY 62 6,797.50

Suriname 6,797.50

TOTAL 6,797.50

TO BE PAID FY 61 6,541.51

Suriname 6,541.51

TOTAL 6,541.51

TO BE PAID FY 60 6,456.75

Suriname 6,456.75

TOTAL 6,456.75

SUBTOTAL FY 60, FY 61, FY62, FY63, FY64, FY65, FY66, FY67, FY68 99,828.72

TOTAL OUTSTANDING PAYMENTS FOR CURRENT & PREVIOUS FYs 497,424.19

Members with 2 or more years of arrears and thus under the sanction of Article 11(4) of the Financial Regulations:

Suriname

Zambia

Outstanding payments FY 2018-2019 (FY 64)

BREAKDOWN PER FINANCIAL YEAR (FY)

Outstanding payments FY 2019-2020 (FY 65)

Outstanding payments FY 2021-2022 (FY 67)

Outstanding payments FY 2020-2021 (FY 66)

Outstanding payments FY 2022-2023 (FY 68)

Arrears FY 2017-2018 (FY 63)

Arrears FY 2016-2017 (FY 62)

Arrears FY 2015-2016 (FY 61)

Arrears FY 2014-2015 (FY 60)

June 2024

Reference number : 70.46

ESTONIA: 1 UNIT

Due Paid Balance Due

Assessed contribution for Financial Year 2024/2025 (FY 70)

€ 8,258.36 per unit 8,258.36 - 8,258.36

TOTAL 8,258.36 - 8,258.36

TOTAL to pay € 8,258.36

Kindly please be advised that this invoice replaces all previous ones and that payment to the HCCH should be made by bank transfer

(cheques are not accepted).

Payment should be made to:

ABN AMRO MeesPierson, P.O.Box 283, 1000 EA Amsterdam, The Netherlands

International Bank Account Number (IBAN): NL04ABNA0555299783

BIC (Swift): ABNANL2A

Name account holder: Conférence de La Haye de droit international privé

Please quote reference number 70.46 with your payment

Invoice of Assessed Contributions (FY 70)

July 2024

Hague Conference on Private International Law www.hcch.net

Conférence de La Haye de droit international privé [email protected]

Conferencia de La Haya de Derecho Internacional Privado The Hague | Buenos Aires | Hong Kong SAR

Hague Conference on Private International Law Conférence de La Haye de droit international privé Conferencia de La Haya de Derecho Internacional Privado

www.hcch.net

[email protected] The Hague | Buenos Aires | Hong Kong SAR

BUDGET AND EXPLANATORY NOTES

FOR FINANCIAL YEAR 1 JULY 2024 – 30 JUNE 2025 (FY 70)

document drawn up following the meeting of the Council of Diplomatic Representatives on 21 May 2024

* * *

Distributed by the Permanent Bureau on 25 June 2024

Table of Contents I. Introduction ............................................................................................................................................ 1

II. A challenging background...................................................................................................................... 2

A. Phase two of costs relating to the implementation of Spanish as an additional official language as of 1 July 2024 ......................................................................................................... 4

1. New costs for translation .................................................................................................. 4

2. New costs for interpretation.............................................................................................. 4

B. Meetings and their format ........................................................................................................... 4

1. The meetings...................................................................................................................... 4

2. Format of meetings and interpretation ............................................................................ 5

3. Meeting costs reflected in the Budget ............................................................................. 5

a. SC meeting 2024 .................................................................................................... 5

b. CGAP and CDR meetings 2025 .............................................................................. 5

C. Rental costs PB premises – End of 11-year rental contract ..................................................... 6

D. Other factors ................................................................................................................................. 7

1. Increases ............................................................................................................................ 7

2. Reserve Funds & Revolving Fund ..................................................................................... 7

3. Cuts and economies .......................................................................................................... 8

4. Use of Operational Surplus from FY 2022-2023 ............................................................. 8

5. Reimbursement iSupport / eCODEX................................................................................. 9

6. Additional units .................................................................................................................. 9

E. Overall results .............................................................................................................................. 9

III. The approved Budget for FY 2024-2025............................................................................................ 10

IV. Comments on Articles of the approved Budget for FY 2024-2025 .................................................. 15

A. Expenses .................................................................................................................................... 15

1. Operation of the PB ......................................................................................................... 15

a. Article 1, Personnel ............................................................................................... 15

b. Article 2, Office space and operation ................................................................... 17

c. Article 3, IT ............................................................................................................. 18

d. Article 4, Copying, printing and publications ....................................................... 19

e. Article 5, Library ..................................................................................................... 19

f. External translations ............................................................................................. 19

g. Article 7, PB missions ............................................................................................ 20

h. Article 8, Financial operation ................................................................................ 20

i. Article 9, Representation (incl. for international meetings) ................................ 20

j. Article 10, Overhead reimbursement iSupport and eCODEX.............................. 21

k. Article 11, Unforeseen .......................................................................................... 21

2. Meetings ........................................................................................................................... 21

a. Article 12, Off-site meetings (Hague Academy) ................................................... 22

b. Article 14, Other costs relating to HCCH meetings ............................................. 24

3. Present and future pension liabilities ............................................................................ 25

a. Article 15, Retirement or survivors’ pensions ..................................................... 25

b. Article 16, Pension administration by the ISRP ................................................... 25

B. Revenues .................................................................................................................................... 25

1. Article 17, Contribution of Member States .................................................................... 25

2. Article 18, Allocation of reserves from FY 2022-2023.................................................. 26

3. Article 19, Contribution of Member Organisation .......................................................... 26

4. Article 20, Income derived from sales of publications .................................................. 26

C. VCs for the implementation of Spanish .................................................................................... 26

1. Article 21a, VC for Spanish translations in FY 2023-2024 ........................................... 26

2. Article 21b, VC for Spanish interpretation in FY 2024-2025 ........................................ 26

D. Other VCs .................................................................................................................................... 27

1. Article 22a, VC from Members ........................................................................................ 27

2. Article 22b, VCs from non-Members............................................................................... 27

E. Accrued unfunded pension liabilities (Art. 23) ......................................................................... 27

F. Explanation of contributions to be paid by Member States: Overview I and Overview II ...... 27

Annex I – Fund Overview and Projections ..................................................................................................... 30

Annex II – Overview of the costs relating to the implementation of Spanish as an Official Language over the next three FYs (as presented in Annex II of the approved Budget for FY 2023-2024) ............. 33

Budget and Explanatory Notes for Financial Year 1 July 2024 – 30 June 2025 (FY 70)

I. Introduction 1 The Council of Diplomatic Representatives (CDR) met on 21 May 2024 to discuss, amongst other

financial matters, Draft Budget 3 for Financial Year (FY) 2024-2025, submitted by the Secretary General (SG) on 15 April 2024.1 During the meeting, CDR approved the Budget for FY 2024-2025 as presented in Draft Budget 3 by consensus, in accordance with Article 8(2), first sentence, of the 2016 Regulations on Financial Matters and Budgetary Practices of the HCCH (Fin. Regs).

2 The approved Budget for FY 2024-2025 builds on Draft Budget 1 of January 2024,2 and Draft Budget 2 of April 2024.3 It also reflects the outcome of earlier discussions during the meeting of the Standing Committee (StC) held in February and April 2024, as well as the decisions taken by Council on General Affairs and Policy (CGAP) at its 2024 meeting. These decisions relate in particular to the Special Commission (SC) meeting to take place in FY 2024-2025 and its format, the format of the 2025 meeting of CDR, the Work Programme of the HCCH in general, and the adoption of Spanish as an additional official language of the HCCH as of 1 July 2024.4

3 As announced by the SG during the CDR, CGAP, and StC meetings, the Permanent Bureau (PB) has done its best to identify further cuts and savings, and to present as realistic a Budget as possible. The Budget for FY 2024-2025 also reflects the consideration given to the question as to which costs are “avoidable” and without legal risk to the Organisation or impact on the effective, basic operation of the PB. While these cuts and savings will have an impact on the operation of the PB, they are nonetheless been made to lower the overall increase of the budget.

4 Against this background, the main changes since Draft Budget 1, include:

- the lowering of costs for social benefits and insurances (see para. 41);

- the further lowering of costs for PB missions (see para. 75);

- the lowering of costs for bank fees (see para. 77);

- the inclusion of € 34,000 in the Budget for FY 2024-2025 as the contribution to the Budget from the iSupport / e-CODEX grants (compared to € 29,000 in Draft Budget 2 and compared to € 40,000 in Draft Budget 1 (see para. 31);

- the lowering of costs for interpretation at the SC meeting on the practical operation of the 1965 Service, 1970 Evidence, and 1980 Access to Justice Conventions in July 2024; the SG noted the possibility for this cost saving during the StC meeting in April 2024, and since then a further small reduction is now envisaged (see paras 12 and 15);

1 Draft Budget 3 and Explanatory Notes for Financial Year 1 July 2024 – 30 June 2025 (FY 70) of April 2024, available on

the Secure Portal of the HCCH website at www.hcch.net under “Governance” then “Council of Diplomatic Representatives”.

2 Draft Budget 1 and Explanatory Notes for Financial Year 1 July 2024 – 30 June 2025 (FY 70) of January 2024, available on the Secure Portal of the HCCH website at www.hcch.net under “Governance” then “Council of Diplomatic Representatives”.

3 Draft Budget 2 and Explanatory Notes for Financial Year 1 July 2024 – 30 June 2025 (FY 70) of April 2024, available on the Secure Portal of the HCCH website at www.hcch.net under “Governance” then “Council of Diplomatic Representatives”.

4 The introduction of Spanish in two phases was planned and approved by both CGAP and CDR in 2023. First, through the acquisition of translation software, adjustments to staff positions, the inclusion of funds for external translations, and adjusted printing costs (all had to be reflected in the Budget for FY 2023-2024); secondly, through the introduction of Spanish online interpretation, and the hiring of Spanish speaking Recording Secretaries for meetings (foreseen in the Budget for FY 2024-2025). See also Annex II.

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- a further deferral of the proposal to transfer the iSupport position to the Budget (now possibly envisaged to take place in July 2025 instead of January 2025);5 as a result of the postponement of this proposed transfer, the contribution to the Budget from the iSupport / e- CODEX grants is lower than envisaged in Draft Budget 1 (but higher than in Draft Budget 2, see para. 4) in order to ensure the financing of the iSupport position for another year via voluntary contributions (VCs) (see also para. 31);

- the lowering of the costs for the 2025 CDR meeting, following CGAP’s Conclusion & Decision (C&D) No 69, inviting CDR, “[i]n the light of budgetary constraints […] to exceptionally consider holding its 2025 meeting in person at the premises of the PB, with the possibility of online participation and online simultaneous interpretation”6 (see para. 14);

- the lowering of the costs for the 2025 CGAP meeting, following the (late) confirmation of the new fee structure for renting the Hague Academy Building beyond 1 August 2024;7 as the increase of these rental costs is slightly lower than anticipated, costs for the 2025 CGAP meeting have been reduced slightly compared to projections for this meeting in Draft Budget 1 (however, overall costs for this meeting are higher than in the current FY due to the introduction of Spanish as an additional official language); and

- the lowering of funds for representation (see para. 79).

5 The approved Budget for FY 2024-2025 first briefly recalls the general, challenging background against which this Budget has been prepared (II.), including the impact of phase two of the implementation of Spanish as an additional official language as of 1 July 2024 (II.A.), the outcome of CGAP’s decisions relating to meetings and their format (II.B), as well as other factors affecting this Budget (II.D.), before presenting the overall results of the Budget (II.E). This is followed by the actual Budget for FY 2024-2025, allowing a comparison of expenditures and revenues with those of the previous FY (see Art. 5(4), first sentence, of the Fin. Regs), and providing an overview of Member States’ assessed contributions (III.), followed by short comments on each budget article that explain the reasons for any proposed increase or decrease in expenditures and / or revenues (see Art. 5(4), second sentence, Fin. Regs) (IV.). Finally, Annex I provides an overview of the five existing reserve funds, and Annex II reproduces the (unrevised) overview of costs related to the implementation of Spanish as an additional official language of the HCCH over three FYs, as approved by CDR at its meeting in May 2023.

II. A challenging background 6 As mentioned in Draft Budget 1 and Draft Budget 2, there are five key factors that significantly

impact budgetary planning and make for a challenging “starting point” in the Budget for FY 2024- 2025.

5 While the SG wishes to recall the arguments in favour of transferring the iSupport position to the Budget (see Draft

Budget 1, para. 14), there are sufficient VCs available to finance this position fully for another year. Therefore, considering the overall budget increase, the proposal to transfer this position to the Budget can be postponed once more. As a result, the costs of this position have been taken out of this Budget. Subject to further developments relating to the use of iSupport (in particular outside the EU) and the availability of additional VCs, the SG envisages, however, to propose this transfer again in FY 2025-2026.

6 C&D No 69 concludes by indicating that CGAP will assess this format of CDR meetings at its 2026 meeting. 7 The PB reminds the Member States that the new fee structure applied by the Carnegie Foundation for rent of the Hague

Academy Building was not known beyond July 2024 when Draft Budget 1 was prepared. The PB only received the new fee structure from the Carnegie Foundation in March 2024.

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a. First, as recommended by CGAP at its 2023 meeting,8 and as subsequently approved by CDR at its 2023 meeting,9 phase two of costs to implement Spanish as an additional official language as of 1 July 2024 have to be included in this Budget. This means that as of FY 2024-2025, full costs for Spanish translation have been included in the Budget to match the amount available for French translation (Art. 6). Additionally, costs for interpretation in Spanish, and costs for Recording Secretaries working in Spanish, have been added as of the Budget for FY 2024-2025.10

b. Secondly, the costs for meetings at the Hague Academy (in particular the rental fees and costs for interpretation) will increase as of FY 2024-2025 (August 2024, to be precise – the new fee structure thus does not affect the SC meeting on the practical operation of the 1965 Service, 1970 Evidence, and 1980 Access to Justice Conventions, which will take place in July 2024). As mentioned in paragraph 4, the increase is slightly lower than anticipated by the PB in Draft Budget 1. Additionally, in order to provide interpretation in Spanish as of July 2024, as planned, the related costs are now included for the SC, CGAP and CDR meetings in FY 2024-2025 (see paras 11 et seq.).

c. Thirdly, the rental contract for the premises of the PB needed to be examined by CDR at its 2024 meeting to consider possible new arrangements as of July 2024 (see paras 18 et seq.).

d. Fourthly, salaries have increased as a result of the regulatory adjustment to higher costs of living in the Netherlands. The adjustment of salaries is necessary and unavoidable to meet obligations and prevent the Organisation from being exposed to legal risks; every effort has been made to minimise their budgetary impact. Additionally, compared to projections in Draft Budget 1, the allowances some staff members are entitled to have been adjusted due to changes in personal situations.

e. Fifthly, the high inflation in the Netherlands has not only led to increased costs for numerous services, but also requires an inflation adjustment of a considerable number of other budget articles; this adjustment is all the more challenging as the further developments of inflation are difficult to anticipate; the PB has made projections for services based on current costs (April 2024), but it will provide more information about inflation adjustments by service providers if they become available (see para. 54).

7 Mindful of the challenging financial environment that States face, the SG has made every effort to minimise the budgetary impact of the necessary changes and adjustments. Together with the Head

8 See CGAP 2023, C&D No 55, available on the HCCH website at www.hcch.net under “Governance” then “Council on

General Affairs and Policy” and “Archive (2000-2023)”. 9 See Approved Budget and Explanatory Notes for FY 1 July 2023 – 30 June 2024 (FY 69), incl. fn. 3 and Annex II, available

on the Secure Portal of the HCCH website under “Governance” then “Council of Diplomatic Representatives”. 10 While the figures presented in Annex II of the Budget for FY 2023-2024 were based on an online interpretation model for

Spanish only, the Budget for FY 2024-2025 is based on online interpretation costs for Spanish as well as English and French, but only for the SC meeting in July 2024 and the 2025 CDR meeting. As regards the 2025 CGAP meeting, however, the SG prefers to budget for an in-person interpretation model. This is to enable the HCCH to revert to in-person interpretation at CGAP 2025 if the experience with online interpretation at the SC meeting in July 2024 turns out be unsatisfactory. If, on the other hand, the experience with online interpretation at the SC meeting in July 2024 is satisfactory, online interpretation would also be used at CGAP 2025 (in which case the resulting cost savings would contribute to a possible operational surplus). The SG is of the view that this careful approach reflects sound and responsible budgeting. While interpreters remain somewhat reluctant to provide their services online when a meeting is being held in hybrid format, the PB remains convinced that the online model is worthwhile exploring and that it can lead to important cost savings in the future. In addition to the changes in the interpretation models, the change in format for the 2025 CDR meeting, a reassessment of the number of interpreters and interpretation booths required (relaxed post- Covid protocol), and the implementation of a new process for the production of the CDR minutes, will also lead to cost reductions; see also paras 10 and 17 (under the new process for the production of the CDR minutes, the latter will be produced by a single Recording Secretary and then be translated internally into the other official languages of the HCCH; this is opposed to hiring three Recording Secretaries to produce reports in each official language; the new process would not be cost-effective for SC and CGAP meetings which due to the duration of these meetings require a team of Recording Secretaries in any case). With these further improvements of process-efficiency put in place by the PB, the costs of phase two of implementing Spanish will be approximately € 19,000 lower than envisaged in Annex II.

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of Finance, he has, as always, sought to identify any further possibilities to make cuts and economies in any of the budget articles, without jeopardising the effective operation of the HCCH and its PB (D.3). Also, it is suggested that the overall increases be partially covered by using a significant part of the net operational surplus from FY 2022-2023 (€ 72,000, see D.4), and by the reimbursement which the HCCH receives from the European Union (EU) Action Grant for iSupport (€ 34,000, see D.5).

A. Phase two of costs relating to the implementation of Spanish as an additional official language as of 1 July 2024

1. New costs for translation

8 In accordance with the plans approved by CDR in May 2023, in FY 2024-2025 € 15,000 must be added to Article 6b to cover the full costs for external translations into Spanish, bringing this article to € 38,500. In FY 2023-2024, although these costs were also projected at € 38,500, only € 23,500 had to be reflected in the Budget for FY 2023-2024 because the balance of € 15,000 would be covered by VCs. The full costs for translations into Spanish (€ 38,500 in FY 2024-2025) must as of now be reflected as a regular and annual expense.

9 The PB is most grateful for the continuing support and in particular for the significant VCs received from Spain and Mexico during FY 2023-2024, and for the further VC announced by Spain for 2024 to support the implementation of Spanish as an official language.11 The PB continues to encourage Member States to make further VCs towards the implementation of Spanish as an additional official language, which would further decrease the relevant costs to be covered through the Budget.

2. New costs for interpretation

10 In accordance with the plans approved by CDR in May 2023, in FY 2024-2025 costs for Spanish interpretation and Recording Secretaries working in Spanish at meetings have to be added to the Budget (reflected in Art. 12). In 2023, these costs were projected at € 55,000, with € 10,000 to be covered by the VCs received from Spain and Mexico during FY 2023-2024 (see para. 9), bringing the effective costs to be covered through the Budget for FY 2024-2025 to € 45,000. The use of € 10,000 from VCs is reflected in Article 21b of this Budget. As explained in footnote 10, however, based on a change in the interpretation models provided at the July 2024 SC and 2025 CDR meetings, the format of the 2025 CDR meeting, as well as a new process put in place for the production of the CDR minutes, the costs for Spanish interpretation and Recording Secretaries are expected to be approximately € 19,000 lower than envisaged in Annex II for FY 2024-2025.

B. Meetings and their format

1. The meetings

11 In addition to annual governance and financial meetings, for FY 2024-2025, CGAP has mandated the PB to organise one SC meeting, namely an SC meeting on the practical operation of the Service, Evidence, and Access to Justice Conventions. This meeting was provisionally scheduled for June 2023 and then July 2023, but it was postponed as a cost saving measure in FY 2022-2023 and FY 2023-2024.12 It will now be held in July 2024.

11 The balance of VCs received from Germany and Mexico in previous years will also be used to support the implementation

of Spanish. 12 See CGAP 2023, C&D No 39.

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2. Format of meetings and interpretation

12 The approved Budget for FY 2024-2025 is based on CGAP’s recommendation for the July 2024 SC and 2025 CGAP meetings to be held in person with the possibility of online participation. Costs for interpretation at the SC meeting are based on services for the (then) three official languages (English, French, Spanish) being provided online (incl. interpretation provisions for online participants).13 As this will be the first time the online interpretation model will be used at a meeting held in hybrid format, plans include, as a safety measure, for one interpreter to be present in-person in the Hague Academy Building. This interpreter would coordinate the work amongst the team of interpreters and be a fall-back interpreter in case one of the online interpreters faces technical difficulties.

13 The July 2024 SC will be the first time the HCCH uses the online interpretation model for a large meeting in hybrid format. As explained in footnote 10, as regards the CGAP meeting in March 2025, the SG prefers to budget for an in-person interpretation model (for the three official languages). This is to enable the HCCH to revert to in-person interpretation at CGAP 2025 if the experience with online interpretation at the SC meeting in July 2024 turns out be unsatisfactory.

14 In the light of budgetary constraints, CGAP invited CDR to consider exceptionally holding its 2025 meeting in person at the premises of the PB, with the possibility of online participation and online simultaneous interpretation.14 While costs remain subject to confirmation depending on available interpreters and fees, when using the current pricing scheme for interpreters as a model, it is estimated that € 17,050 will be saved by holding the CDR meeting at the premises of the PB and by providing remote interpretation. As a further cost saving measure, the meetings of the StC will continue to be held online.

3. Meeting costs reflected in the Budget

a. SC meeting 2024

15 The costs for a hybrid SC meeting in July 2024 in the Hague Academy building, with online interpretation in the three official languages, amount to € 110,650, based on the current pricing scheme for FY 2023-2024 (compared to € 123,150 in Draft Budget 1 and Draft Budget 2, and € 111,150 as announces by the SG during the April 2024 StC meeting (see paras 94-98).

b. CGAP and CDR meetings 2025

16 The costs for a hybrid 2025 CGAP meeting in the Hague Academy building, with in-person interpretation, amount to € 131,600 (compared to € 133,050 in Draft Budget 1). This is the amount reflected in this Budget (see Part III).

17 The costs for an in-person CDR meeting at the premises of the PB with remote (online) interpretation in May 2025 amount to € 4,750 (compared to € 22,450 in Draft Budget 1). This is the amount reflected in this Budget (see Part III). For more details of the costs of these meetings, see paras 88-93).15

13 It should be noted that the International Association of Conference Interpreters recommends a 25% top-up for

interpretation at meetings with online participants; so far, the PB has managed to negotiate with its interpreters that this substantial increase not be applied.

14 See para. 4 above, referring to CGAP 2024, C&D No 69. 15 Based on the new pricing scheme for 2024-2025 for the Hague Academy Building, the cost of holding CDR at the Hague

Academy as an in-person only meeting, with in-person interpretation, would amount to € 21,800. The costs of holding CDR at the Hague Academy as an in-person only meeting but with online interpretation would be significantly higher at € 31,350, as technical facilities would need to be added to allow for remote interpretation. The costs of holding an online CDR meeting at the premises of the PB without remote (online) interpretation, would amount to € 200 (see also fn. 21).

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C. Rental costs PB premises – End of 11-year rental contract

18 The 11-year rental agreement concluded in 2014 for the premises of the PB will end in June 2025. According to the terms of the contract, if the HCCH wishes to terminate the contract, it must indicate its intention to do so before 1 October 2024. If no indication is given before that date, the rental agreement will be extended for a further three years under the current terms, until 30 June 2028. In the PB’s view, the current premises are adequate both in terms of space and costs. A move to new premises would not only be costly and have a significant impact on the PB’s operations, it would also require additional funds to fit out the new office space so as to accommodate the PB’s needs.

19 Before deciding to extend the current agreement, however, the SG was of the view that the rental conditions under that agreement, in particular the rental price per square meter, should be assessed against the backdrop of current market conditions (these market conditions have changed as a result of the COVID-19 pandemic and the resulting increase of telework). An assessment of the rental conditions seemed all the more appropriate, and indeed necessary, as the yearly discount of approximately € 40,000 on the current rental price, which the HCCH was granted in 2014 as an incentive to move to Churchillplein, expires on 30 June 2024. As a result, if the discount was not extended, the rental price of the premises would increase by approximately € 40,000 per year as of 1 July 2024. This increase was not, however, reflected in the Budget for FY 2024-2025 as the SG anticipated that the rental costs and a discount could be renegotiated as part of a new and long-term deal. In other words, instead of terminating the current contract or having it automatically extended, the SG proposed to replace the current agreement with a new, cost-effective long-term rental agreement that would also bring budgetary certainty and predictability to the HCCH.

20 With a view to ensuring a “good deal”, the SG was hoping to rely again on the expertise of the Netherlands’ Government Building Agency (Rijksvastgoedbedrijf, formerly known as the Rijksgebouwdienst; this agency had assisted the PB during its relocation process in 2013 and 2014), in particular with a view to assessing the competitiveness of the future rental price of the current premises of the PB. However, in response to the PB’s query, the agency indicated that they no longer provide these services. The PB thus continued its efforts and got in touch with the Dutch Ambassador for International Organisations to assess ways in which the Host State could provide assistance in this matter (the SG is indeed of the view that this kind of support should be part of a Host State’s services). The PB then also contacted the Hague Business Agency and the Municipality of The Hague. This expert strongly advised the services of a professional real estate agent for the negotiations with the owner. The PB thus reached out to the same real estate agent from 2014 (REDEPT) and accepted an offer for REDEPT to conduct the negotiations and handle the administrative aspects of a new agreement with the current owner.

21 In his discussions with the real estate agent, the SG stressed that the renewed agreement should include an extension of the discount for at least a few years; the fallback option was a discount for at least FY 2024-2025, with a decreasing discount over the following years. The negotiations also addressed aspects relating to the overall development of the building (e.g., a possibility to have access to conference facilities for meetings involving 40-80 people, and/or to a catered lunch facility in the building complex). Some smaller action points relating to the maintenance of the building were requested to be reflected in the renewed agreement (e.g., an improved intercom system to let people into the building from the entrance and the garage).

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22 The SG continued to inform the Member States of the HCCH of any relevant developments ahead of the 2024 CDR meeting.16 REDEPT engaged with the representatives of the building owners and negotiated a draft rental agreement to fulfil the needs of the PB, including a rental discount to offset expenses for the first five years of the draft rental agreement. With the negotiated annual incentive for the first five years, the full costs of the new agreement would only eventuate in the sixth year of the rental agreement (2029). The result is that the Budget for FY 2024-2025 will not need to be adjusted to include additional funding for the PB premises. The SG is pleased with the outcome of these negotiations and considers that the new rental agreement is indeed in the best interest of the HCCH. Following discussions at its meeting in May 2024, CDR approved the terms of the new rental agreement and authorised the SG to finalise a new agreement for the PB premises for a period of 10 years (1 July 2024 to 30 June 2034).

D. Other factors

1. Increases

23 The approved Budget for FY 2024-2025 also reflects higher costs for numerous operational expenses. These increases, which are explained in more detail under Part IV., are listed below, in addition to the increases already explained above:

 Article 1a Salaries and allowances: + € 197,400  Article 1b Social benefits and insurances: + € 10,400  Article 1g External support (operational / legal): + € 4,600  Article 2a Rent: + € 10,100  Article 2d Cleaning: + €7,800  Article 3a Support / maintenance: + € 1,000  Article 3c Internet / website(s): + € 300  Article 4a Lease / production supplies: + € 10,150  Article 6b Spanish: + € 15,000  Article 7 PB missions: + € 3,000  Article 9 Representation: + € 1,500  Article 12a Venue: +€ 10,550  Article 12b Interpretation (English, French, Spanish): +€ 11,700  Article 12c Additional personnel / moving: +€ 4,700  Article 12i Additional personnel / moving: +€ 1,250  Article 14a Supplies and facilitation: +€ 2,700  Article 15 Retirement or survivors’ pensions: + € 44,500

24 In this Budget for FY 2024-2025, the total of these increases amounts to € 336,650 (compared to € 341,000 in Draft Budget 2 and € 394,400 in Draft Budget 1 – a difference of € 4,350 compared to Draft Budget 2 and € 57,750 compared to Draft Budget 1). Relevant adjustments have led to lower increases of Articles 1a (Salaries and allowances), 1b (Social benefits and insurances), Article 7 (PB missions), Article 9 (Representation), Article 12a (Venue), and Article 15 (Retirement and survivors’ pensions).

2. Reserve Funds & Revolving Fund

25 No additions are made to any of the reserve funds for operational expenses through the respective articles of this Budget. While these funds had to be used during FY 2022-2023, no top-ups are

16 See Memo: Recent Developments Related to the Rental Agreement for the PB Premises, and, in particular, Prel. Doc.

No 6 of May 2024 for CDR, which provides more details about the new rental agreement. Both these documents are available on the Secure Portal of the HCCH website at www.hcch.net under “Governance” then “Council of Diplomatic Representatives”.

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foreseen in the Budget for FY 2024-2025. An overview of all the reserve funds for operational expenses is provided in Annex I.

26 This Budget does not include any contribution to the Revolving Fund. However, given the increase of the total Budget in FY 2023-2024, the Revolving Fund needs to be topped-up in order to remain within the required bandwidth determined by Article 12 of the Fin. Regs. CDR approved to top-up the Revolving Fund by using € 8,412 from the net operational surplus from FY 2022-2023 (see paras 29-30) to this effect.

3. Cuts and economies

27 With a view to compensating for these increases as much as possible, in particular against the backdrop of the challenging economic environment, but also in his continued efforts to apply a realistic and cost-efficient Budget without jeopardising the effective operation of the HCCH and its PB, the SG, together with the Head of Finance, has been able to identify a few items in the Budget for FY 2024-2025 where cuts and economies are possible, either as a result of changed needs or to reflect new circumstances. These cuts and economies relate to:

 Article 1e Fund Staff Rules: - € 25,000  Article 2c Insurance: - € 1,000  Article 8a Bank fees: - € 1,000  Article 12d Venue: - € 9,500  Article 12e Interpretation (English, French, Spanish): - € 1,050  Article 12f Additional personnel / moving: - € 200  Article 12g Venue: - € 19,250  Article 12h Interpretation (English, French, and Spanish): - € 10,650  Article 16 Pension administration by the ISRP: - € 700

28 In the approved Budget for FY 2024-2025, the total of these cuts and economies amounts to € 68,350 (compared to cuts of € 56,700 in Draft Budget 2 and € 46,150 in Draft Budget 1 – a difference of € 11,650 compared to Draft Budget 2 and € 22,200 compared to Draft Budget 1).

4. Use of Operational Surplus from FY 2022-2023

29 Following the SG’s proposal to CDR on the allocation of the net operational surplus for FY 2024- 2025 (see Art. 13(2) Fin. Regs),17 at its meeting in May 2024, CDR approved the use of an amount of € 72,000 from the net operational surplus from FY 2022-2023 as additional revenue (technically an allocation of reserves, as reflected in Art. 18a) to absorb some of the increases in this Budget.18 Inclusion of this amount would have a significant positive impact on the Budget. This approach would also allow for part of the surplus to be redistributed to Member States by significantly lowering Member States’ assessed contributions for FY 2024-2025, without undertaking the time and resource-intense administrative burden of calculating, setting-up and executing reimbursements by way of more than 90 bank transfers of small amounts.

30 CDR also approved that the balance of the net operational surplus from FY 2022-2023 (approx. € 8,000) would be used to top up the Revolving Fund in order to keep it at the level required by Article 12 of the Fin. Regs. With this top-up, the Revolving Fund will be at 12.95% of the assessed contributions for FY 2023-2024 (the lowest it has ever been since the adoption of the Fin. Regs, but still within the limits of the Fin. Regs). No further budgetary funds are to be used to top up the Revolving Fund.

17 See Prel. Doc. No 3 of May 2024 for CDR. 18 As in the past, the surplus from FY 2022-2023 is not the result of inadequate or otherwise unrealistic budgeting, but

mainly the result of unexpected changes of circumstances and the resulting necessary adjustments to the original plans.

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5. Reimbursement iSupport / eCODEX

31 The reimbursement for iSupport and eCODEX from the EU to cover some costs incurred by the Budget during FY 2024-2025 (i.e., salary costs of some staff members working on iSupport and eCODEX, and overhead costs for operation) is reflected in Article 10. The reimbursement that may be used in the Budget for FY 2024-2025 amounts to € 34,000 (see also para. 4).19 For technical reasons, this reimbursement is reflected as a “negative cost”. This reimbursement is lower than what was envisaged in Draft Budget 1 (€ 40,000) as the iSupport position is no longer proposed to be moved to the Budget for FY 2024-2025 and as a result, the VCs must be used to cover the costs of this position; based on a reassessment of funds the contribution has been raised from € 29,000 in Draft Budget 2.

6. Additional units

32 No additional units are taken into account in the Budget for FY 2024-2025.

33 While the PB is in contact with the (currently three) admitted States regarding the completion of their membership process, at the time of submitting this Budget, these processes have not advanced enough to warrant, or indeed justify, inclusion of their respective units in this Budget.

34 As a result of these developments, the total number of units in the HCCH Budget is 640.5.

E. Overall results

35 As a result of all of the above, compared to the Budget for FY 2023-2024, the key indicators of the approved Budget for FY 2024-2025, are:

 Operation of the PB and International Meetings: increase of € 219,500 or 5.23%;20  Total expenses of the Budget (Operation of the PB, International Meetings plus Present and

Future Pension Liabilities): increase of € 263,300 or 5.48%;  Total Budget: increase of € 263,300 or 5.27%;  Total assessed contribution of the Member States: increase of € 251,393 or 5.16%;  Value of the Member States’ assessed contributions per budgetary unit: increase of

€ 392.49 or 4.99%.21

36 The median number of budgetary units allocated to Member States is three. Thus, the median increase of assessed contributions under this Budget amounts to € 1,177.47.

37 As mentioned, the SG is mindful of the challenges that States face as a result of the current economic context. These circumstances, however, are beyond the PB’s control. The SG remains committed to a realistic Budget, based on the actual needs of the HCCH and the PB considering the Work Programme and priorities decided by CGAP.

19 In accordance with the EU Action Grant guidelines, the HCCH may use this reimbursement for any purpose, incl. towards

salary costs. 20 Without the costs relating to the second phase of implementing Spanish as an additional official language, the increase

would be € 183,500 or 4.37%. 21 If CDR were held at the Hague Academy as an in-person only meeting with in-person interpretation, the increase per unit

would be 5.33%; if CDR were held at the Hague Academy as an in-person only meeting but with remote interpretation, the increase per unit would be 5.52%. If CDR were held at the premises of the PB without interpretation, the increase per unit would be 4.90% (see also fn. 15).

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Budget Financial Year Budget Financial Year 1 July 2023-30 June 2024 (FY 69) 1 July 2024-30 June 2025 (FY 70)

EXPENSES

OPERATION OF THE PERMANENT BUREAU

Art 1 Personnel

1a Salaries and allowances 2,858,900.00 3,056,300.00 1b Social benefits and insurances 198,800.00 209,200.00 1c Home leave 10,500.00 10,500.00 1d Fund relocation - - 1e Fund Staff Rules (HR matters not covered in other Articles 25,000.00 - 1f ISRP administration 6,500.00 6,500.00 1g External support (operational / legal) 88,500.00 93,100.00

3,188,200.00 3,375,600.00

Art 2 Office space and operation

2a Rent 194,000.00 204,100.00 2b Service 76,500.00 76,500.00 2c Insurance 11,800.00 10,800.00 2d Cleaning 27,000.00 34,800.00 2e Office supplies 12,000.00 12,000.00 2f Telecommunication / postage 10,000.00 10,000.00 2g Fund maintenance / equipment - -

331,300.00 348,200.00

Art 3 IT

3a Support / maintenance 50,000.00 51,000.00 3b Software licenses / hardware 63,000.00 63,000.00 3c Internet / website(s) 13,500.00 13,800.00 3d Fund IT / equipment - -

126,500.00 127,800.00

Art 4 Copying, printing, and publications

4a Lease / production supplies 77,500.00 87,650.00 4b External design, lay-out 1,000.00 1,000.00 4c Fund recueil - -

78,500.00 88,650.00

Art 5 Library

5a Subscriptions 13,000.00 13,000.00 5b Purchases 6,500.00 6,500.00

19,500.00 19,500.00

Art 6 External translators

6a French 38,500.00 38,500.00 6b Spanish* 23,500.00 38,500.00

62,000.00 77,000.00

Art 7 PB missions 71,500.00 74,500.00

Art 8 Financial operation

8a Bank fees 5,000.00 4,000.00 8b Audit fees 49,000.00 49,000.00

54,000.00 53,000.00

III. The approved Budget for FY 2024-2025

11

Art 9 Representation (incl. for international meetings) 18,000.00 19,500.00

Art 10 Overhead reimbursements iSupport / eCODEX (29,000.00) (34,000.00)

Art 11 Unforeseen 3,500.00 3,500.00

SUBTOTAL 3,924,000.00 4,153,250.00

Budget Financial Year Budget Financial Year 1 July 2023-30 June 2024 (FY 69) 1 July 2024-30 June 2025 (FY 70)

MEETINGS

Art 12 Off-site meetings (Hague Academy)

CGAP 12a Venue 72,650.00 83,200.00 12b Interpretation (English, French, and Spanish) 22,850.00 34,550.00 12c Additional personnel / moving 9,150.00 13,850.00

104,650.00 131,600.00 CDR

12d Venue 9,500.00 - 12e Interpretation (English, French, and Spanish) 5,100.00 4,050.00 12f Additional personnel / moving 900.00 700.00

15,500.00 4,750.00

Special Commissions and other meetings 12g Venue 94,000.00 74,750.00 12h Interpretation (English, French, and Spanish) 32,700.00 22,050.00 12i Additional personnel / moving 12,600.00 13,850.00

139,300.00 110,650.00

subtotal 259,450.00 247,000.00

Art 13 On-site meetings (PB) - incl. additional personnel 3,000.00 3,000.00

Art 14 Other costs relating to HCCH meetings

14a Supplies and facilitation 7,000.00 9,700.00 14b Travel consultants and external experts 2,500.00 2,500.00

9,500.00 12,200.00

SUBTOTAL 271,950.00 262,200.00

Budget Financial Year Budget Financial Year 1 July 2023-30 June 2024 (FY 69) 1 July 2024-30 June 2025 (FY 70)

PRESENT AND FUTURE PENSION LIABILITIES

Paid by all Member States

Art 15 Retirement or survivors' pensions 587,700.00 632,200.00

Art 16 Pension administration by the ISRP 17,700.00 17,000.00

SUBTOTAL 605,400.00 649,200.00

TOTAL EXPENSES 4,801,350.00 5,064,650.00

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Budget Financial Year Budget Financial Year 1 July 2023-30 June 2024 (FY 69) 1 July 2024-30 June 2025 (FY 70)

REVENUES

Art 17 Contribution of the Member States 4,871,651.00 5,123,044.00

Art 18 Allocation of reserves from previous FY 73,093.00 72,000.00

Art 19 Contribution of a Member Organisation 39,000.00 39,000.00

Art 20 Income derived from sales of publications 15,000.00 18,000.00

Art 21 Voluntary Contributions (VC) for implementation of Spanish

21a VC for Spanish translation FY 23-24 (reflected in Art.6b)* [15,000.00] - 21b VC for Spanish interpretation FY 24-25 - 10,000.00

[15,000.00] 10,000.00

TOTAL REVENUES 4,998,744.00 5,262,044.00

OTHER VOLUNTARY CONTRIBUTIONS

Art 22a VC from Members p.m. p.m.

Art 22b VC from non-Members p.m. p.m.

TOTAL VC - -

TOTAL BUDGET 4,998,744.00 5,262,044.00

ACCRUED UNFUNDED PENSION LIABILITIES

Art 23 Paid, in addition to their contribution to the Budget, 197,394.00 197,394.00 by all States that were Member on or prior to 1 July 2010

and which have not yet paid off their full share in these liabilities

EXPLANATION OF CONTRIBUTIONS TO BE PAID BY THE MEMBER STATES

*See Annex II for implementation details for Spanish as an official language as of 1 July 2024, as decided and approved by CDR in May 2023. In FY 23-24 the expected VC was ncluded in Art. 6b. For better transparency and comparison, it is now reflected in Art. 21a. The overall budget for FY 23-24 is not affected.

Overview II lists the total contributing share of each State that was a Member on or prior to 1 July 2010 and that has paid off its share in the accrued unfunded pension liabilities or that became a Member after 1 July 2010 (and thus does not have to pay for accrued unfunded pension liabilities at all): € 2,272,490 to be divided by 295.5 units = € 7,690.32 per unit.

The increase per unit is 4.99% or € 392.49 per unit compared to the previous Financial Year 2023-2024 (FY 69).

The calculation for the contributions of the Member States is based on the number of units assigned to each Member State under the system of the Universal Postal Union (as amended at the 23rd meeting of the Council of Diplomatic Representatives on 1 November 1977).

The total contribution to be paid by the Member States amounts to € 5,123,044 (see Art. 17).

Overview I lists the total contributing share of each State that was a Member on or prior to 1 July 2010 and that has not yet paid off its full share in the accrued unfunded pension liabilities (Art. 22): the contribution to the operating Budget (incl. the present and future pension liabilities), € 2,653,160, is divided by 345 units; the contribution to accrued unfunded liabilities, € 197,394, is divided by 347.5 units. The total in Overview I is € 2,850,554 The total per unit is €  8,258,36 per unit (with the exception of Austria, Brazil, Georgia, Poland, and Russia).

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MEMBERS units accrued unfunded contribution to the total contribution pension liabilities operational Budget to be paid

ALBANIA 1 568.04 7,690.32 8,258.36 ARGENTINA 3 1,704.12 23,070.96 24,775.08 AUSTRALIA 20 11,360.81 153,806.40 165,167.21 AUSTRIA * 6 2,840.20 46,141.92 48,982.12 BELARUS 1 568.04 7,690.32 8,258.36 BOSNIA AND HERZEGOVINA 1 568.04 7,690.32 8,258.36 BRAZIL** 10 11,360.81 76,903.20 88,264.01 BULGARIA 3 1,704.12 23,070.96 24,775.08 CHILE 3 1,704.12 23,070.96 24,775.08 CYPRUS 1 568.04 7,690.32 8,258.36 CZECH REPUBLIC 5 2,840.20 38,451.60 41,291.80 ECUADOR 1 568.04 7,690.32 8,258.36 EGYPT 5 2,840.20 38,451.60 41,291.80 ESTONIA 1 568.04 7,690.32 8,258.36 FRANCE 33 18,745.33 253,780.56 272,525.89 GEORGIA *** 1 284.02 7,690.32 7,974.34 GREECE 3 1,704.12 23,070.96 24,775.08 HUNGARY 5 2,840.20 38,451.60 41,291.80 INDIA 20 11,360.81 153,806.40 165,167.21 ISRAEL 3 1,704.12 23,070.96 24,775.08 JAPAN 33 18,745.33 253,780.56 272,525.89 JORDAN 1 568.04 7,690.32 8,258.36 LATVIA 1 568.04 7,690.32 8,258.36 LUXEMBOURG 3 1,704.12 23,070.96 24,775.08 MALAYSIA 3 1,704.12 23,070.96 24,775.08 MONTENEGRO 1 568.04 7,690.32 8,258.36 MOROCCO 5 2,840.20 38,451.60 41,291.80 NEW ZEALAND 5 2,840.20 38,451.60 41,291.80 NORTH MACEDONIA 1 568.04 7,690.32 8,258.36 NORWAY 10 5,680.40 76,903.20 82,583.60 PERU 1 568.04 7,690.32 8,258.36 POLAND * 6 2,840.20 46,141.92 48,982.12 REPUBLIC OF KOREA 15 8,520.60 115,354.80 123,875.40 RUSSIAN FEDERATION **** 20 8,520.60 153,806.40 162,327.00 SERBIA 1 568.04 7,690.32 8,258.36 SLOVENIA 1 568.04 7,690.32 8,258.36 SOUTH AFRICA 10 5,680.40 76,903.20 82,583.60 SPAIN 25 14,201.01 192,258.00 206,459.01 SURINAME 1 568.04 7,690.32 8,258.36 SWEDEN 15 8,520.60 115,354.80 123,875.40 SWITZERLAND 15 8,520.60 115,354.80 123,875.40 TÜRKIYE 5 2,840.20 38,451.60 41,291.80 UKRAINE 5 2,840.20 38,451.60 41,291.80 UNITED STATES OF AMERICA 33 18,745.33 253,780.56 272,525.89 URUGUAY 3 1,704.12 23,070.96 24,775.08

197,393.99 2,653,160.40 2,850,554.39 rounding differences 0.01 (0.40) (0.39)

Total taken into account 345.0 197,394.00 2,653,160.00 2,850,554.00 for Financial Year FY 70

(1) As amended at the 23rd meeting of the Council of Diplomatic Representatives on 1 November 1977

* Austria and Polands' contribution to operational Budget is based on 6 units. Their shares of the accrued unfunded liabilities are based on 5 units. ** Brazil's contribution to operational Budget is based on 10 units. Its share of the accrued unfunded liabilities is based on 20 units. *** Georgia's contribution to operational Budget is based on 1 unit. Its share of the accrued unfunded liabilities is based on 0.5 units. **** The Russian Federations' contribution to operational Budget is based on 20 units. Its share of the accrued unfunded liabilities is based on 15 units.

Under the system of the Universal Postal Union (1)

OVERVIEW I

Total contributing share of each State that was a Member on or prior to 1 July 2010 and that has

not yet paid off its full share in the accrued unfunded pension liabilities

Financial Year 2024-2025 (FY 70)

14

contribution to the MEMBERS units operational Budget

(= total contribution to be paid)

ANDORRA 1 7,690.32 ARMENIA 1 7,690.32 AZERBAJAN 1 7,690.32 BELGIUM 15 115,354.80 BURKINA FASO 0.5 3,845.16 CANADA 33 253,780.56 CHINA 33 253,780.56 COSTA RICA 1 7,690.32 CROATIA 1 7,690.32 DENMARK 10 76,903.20 DOMINICAN REPUBLIC 1 7,690.32 EL SALVADOR 1 7,690.32 FINLAND 10 76,903.20 GERMANY 33 253,780.56 HONDURAS 1 7,690.32 ICELAND 1 7,690.32 IRELAND 5 38,451.60 ITALY 27 207,638.64 KAZAKHSTAN 1 7,690.32 LITHUANIA 1 7,690.32 MALTA 1 7,690.32 MAURITIUS 1 7,690.32 MEXICO 10 76,903.20 MONACO 1 7,690.32 MONGOLIA 1 7,690.32 NAMIBIA 1 7,690.32 NETHERLANDS 15 115,354.80 NICARAGUA 1 7,690.32 PANAMA 1 7,690.32 PARAGUAY 1 7,690.32 PHILIPPINES 1 7,690.32 PORTUGAL 5 38,451.60 REPUBLIC OF MOLDOVA 1 7,690.32 ROMANIA 3 23,070.96 SAUDI ARABIA 20 153,806.40 SINGAPORE 4 30,761.28 SLOVAKIA 3 23,070.96 SRI LANKA 3 23,070.96 THAILAND 3 23,070.96 TUNISIA 5 38,451.60 UNITED KINGDOM 33 253,780.56 UZBEKISTAN 1 7,690.32 VENEZUELA 1 7,690.32 VIET NAM 1 7,690.32 ZAMBIA 1 7,690.32

2,272,489.56 rounding differences 0.44

Total taken into account 295.5 2,272,490.00 for Financial Year 70

(1) As amended at the 23rd meeting of the Council of Diplomatic Representatives on 1 November 1977

Under the system of the Universal Postal Union (1)

OVERVIEW II

Total contributing share of each State that was a Member on or prior to 1 July 2010 and that has

paid off its full share in the accrued unfunded pension liabilities or that became a Member after 1 July 2010

Financial Year 2024-2025 (FY 70)

15

IV. Comments on Articles of the approved Budget for FY 2024-2025

A. Expenses

1. Operation of the PB

a. Article 1, Personnel

Article 1a, Salaries and allowances

38 Compared to the Budget for FY 2023-2024, this article increases by € 197,400 (as opposed to € 228,100 in Draft Budget 1). It covers costs for 26.95 FTEs, which is the same number of FTEs in the Budget for the current FY. As mentioned in paragraph 4, this Budget no longer includes costs for the iSupport position as of January 2025 (now possibly envisaged to be transferred in July 2025).22 The article includes regulatory salary adjustments related to staff progression, as well as costs for other allowances and entitlements tied to the Staff Rules. Salaries and allowances are established in accordance with the Remuneration Adjustment Method (RAM) applied to salaries and allowances for Co-ordinated and Associated Organisations located in the Netherlands. The salary projections for 2025 are calculated using the 2024 salary scales for the Netherlands (as determined by the International Service for Remunerations and Pensions (ISRP) and the Coordinating Committee on Remuneration (CCR)), as well as an estimated RAM rate of 2%.23 This latter projection is necessary to avoid underfunding for salaries from January to June 2025.

39 The total personnel costs, including pension liabilities and related administration costs, amount to 80.24% of the total Budget. This percentage is based on the total of Articles 1, 15, 16 and 22 (and not just on salary costs). When only considering costs for active staff in Article 1a, 1b and 1c, the total personnel costs amount to 62.26% of the total Budget.24

40 As in previous FYs, the human resources costs of the Regional Office for Asia and the Pacific (ROAP) are not included in this Budget. The SG wishes to stress again, however, that in his view the current situation with different treatments applicable to two existing Regional Offices is not satisfactory. The matter will need to be considered by CGAP and CDR in the future; this consideration may include, without prejudice, arguments about equal treatment of the two existing Regional Offices.

Article 1b, Social benefits and insurances

41 This article increases by € 10,400 (compared to € 11,900 in Draft Budget 2 and€ 14,300 in Draft Budget 1). It includes costs for a group insurance policy to cover the risks of death and disability, as well as temporary or long-term sick leave.25 The increase of this article is necessary to meet expenses for medical and disability insurance (based on annual premiums) and is beyond the PB’s discretion.

42 The article covers partial reimbursement of certain health insurance expenses for staff, in keeping with mandatory statutory policies of the Host State Agreement with the Netherlands.

22 See also fn. 5. 23 The RAM includes, but is not limited to, an inflation component; the adjustment is determined by the ISRP and is approved

by the CCR as well as the governing bodies of the Co-ordinated and Associated Organisations. A Memo prepared by the ISRP relating to the calculation and application of the RAM is available on the Secure Portal of the HCCH website. The salary scales enter into force on 1 January of each calendar year, and the RAM can represent an increase or a decrease in a given year.

24 According to information received from the ISRP for comparison, active staff costs at the OECD amount to approximately 80%.

25 The definitive premium is calculated at the end of each FY as a percentage of actual salary and health insurance costs over the year.

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Article 1c, Home leave

43 This article remains unchanged. It covers travel expenses with respect to home leave for eligible officials and their dependants (approx. 30 persons in total). While home leave is accrued by eligible staff every two years, staff have a period of 18 months in which to use it. It is, therefore, necessary to budget for these obligations in anticipation that they can be claimed during FY 2024-2025. Additionally, flight tickets have become significantly more expensive.

Article 1d, Fund relocation

44 This article remains unchanged. It covers possible relocation costs during FY 2024-2025 for current and future officials of the PB, as well as removal costs and the relocation allowance. No reappropriations (cross-funding), from or to other Funds, are foreseen in FY 2024-2025 (see Annex I).

Article 1e, Fund Staff Rules (HR matters not covered in other Articles)

45 This article decreases by € 25,000. Based on expected projections, this Fund will not require a top- up through the Budget in FY 2024-2025. In May 2023 CDR approved the PB’s proposal to increase the target of this Fund from € 100,000 to € 125,000, with a top-up of € 25,000.

46 The Reserve Fund for the Staff Rules is used to cover costs in each FY relating to the application of certain governance and HR provisions associated with the Staff Rules, such as dispute resolution mechanisms (incl. the use of confidentiality counsellors, mediators, conciliators or arbitrators, a complaints procedure, a conciliation procedure, and an appeals procedure to the Administrative Tribunal of the Council of Europe), external legal fees, and the use of services of external HR experts (to the extent needed). This Reserve Fund is also used to finance possible training of staff in matters of team development, management, and initiatives to improve the PB’s overall operation.

47 This Fund includes a sub-fund for the possible payment of an indemnity for loss of employment (see Art. 13 of the Staff Rules and the Budget for FY 2017-2018). This sub-fund consists of a ring- fenced amount for this purpose. The ring-fenced amount was set at € 30,000 by CDR at its meeting in May 2019 and increased to € 32,500 by CDR in May 2021.26

48 Any balance in this Fund remains part of this Fund and is not part of an operational surplus.

Article 1f, ISRP administration

49 This article remains unchanged. It covers costs for annual publications by the ISRP and the CCR on the adjustments of salaries, allowances and pensions for Co-ordinated Organisations, as well as the specific salary scales applicable to the relevant countries, including the Netherlands and Argentina.

Article 1g, External support (operational / legal)

50 This article increases by € 4,600. It covers work on publications of the HCCH, including the upcoming new editions of the Practical Handbooks on the Service and Evidence Conventions (approx. 38% of the total article). It also includes an increase for the external technical support provided by a qualified accountant, which is essential for the effective operation of the financial office of the PB and for enabling the SG to fulfil his increased responsibilities as defined in the 2016 Fin. Regs. The increase is due to increased audit requirements to meet current compliance

26 In the hypothetical case of an Official at Grade A2, who is not entitled to any allowances (e.g., family and / or child

allowance) and who has been with the Organisation for any term between five and 10 years, the amount would reach approx. € 42,000. Based on the actual staff data of the PB (incl. number of years spent at the PB), there is, however, a strong likelihood that a possible indemnity would be significantly higher. The ring-fenced amount may thus have to be increased in the future.

17

regulations (with this increase, that position counts for approx. 32% of the total article). This article also includes costs for library support (approx. 6% of the total article), as well as general services support for PB operations, meetings, and publications (approx. 18% of the total article). In comparison to the Budget for FY 2023-2024, these hours have been reduced based on projected services.

51 The external operational (non-legal) support provided to the PB by parties not hired as staff of the HCCH, remains essential. In addition, relying on external parties rather than hiring staff for this work is considerably more cost-effective.

52 Finally, this article includes costs for possible external legal support in relation to ongoing normative projects for which external assistance is required; costs for this support have been cut slightly and represent approximately 6% of the total article.

b. Article 2, Office space and operation

53 The increased cost for services in the Netherlands has a significant impact on operations of the PB. Furthermore, inflation adjustments implemented by service providers remain unpredictable. The PB has, therefore, made projections for services based on current and actual costs (as far as they are known in May 2024); in addition, and as per past practice, an inflation rate of 2% has been applied to certain articles as disclosed below. This is also the inflation rate used in the Net Present Value analysis (NPV) presented to the Members as part of the relocation process to Churchillplein 6b in 2014.27 As of the next FY, the PB will use the NPV applicable for the new rental contract as of July 2024 to project the evolution of rent and services costs of the premises of the PB. This allows for the projection of a gradual increase to avoid the risk of underfunding operational expenses and more drastic escalations in the future.

54 An inflation adjustment rate of just 2%, however, is low, considering that the inflation rate in the Netherlands in 2023 was 3.8%. This is lower compared to 2022, but only if energy is included; if energy is excluded, the inflation rate in 2023 was still at 6.5%, thus affecting a lot of operational costs of the HCCH.28 It is generally expected that inflation will be somewhat lower in 2024.29 The SG hopes that continuing to apply a relatively low 2% inflation adjustment for expense planning, unless expressly indicated otherwise by service providers, will be sufficient to cover actual costs throughout FY 2024-2025.30 The SG wishes to express a note of caution, though, and suggests that the developments of the inflation rate be monitored carefully. That said, in this Budget, costs can remain neutral in some articles despite inflation projections because actual expenses are expected to be slightly lower in FY 2024-2025. This means that a total of 15 articles have also effectively decreased (in addition to the five articles that have actually decreased).

Article 2a, Rent

55 This article increases by € 10,100. It covers costs for rent of the PB premises at Churchillplein 6b. In keeping with the NPV presented to the Members in 2014, these figures reflect current expenses plus an estimated 2% inflation rate (see para. 54; on the matter of the ending of the rental agreement for the premises of the PB, see paras 18-22).

27 Available at http://www.hcch.net/upload/hidden/2014/dipl/20140124npv_en.pdf. 28 See https://www.cbs.nl/en-gb/news/2024/02/inflation-rate-3-8-percent-in-2023-excluding-energy-at-6-5-percent. 29 https://www.dnb.nl/en/current-economic-issues/the-state-of-the-dutch-economy/. Though in March 2024, the inflation

in the Netherlands rose again to 3.1%, see https://www.cbs.nl/en-gb/news/2024/15/inflation-rises-to-3-1-percent-in- march.

30 According to the Netherlands Bank, an inflation rate of 2% across the euro area remains the target, see https://www.dnb.nl/en/the-euro-and-europe/inflation/.

18

Article 2b, Service

56 While this article has been adjusted to reflect current expenses, plus an estimated 2% inflation rate in keeping with the NPV presented to the Members in 2014 (see para. 54), the net effect is that it remains unchanged.

Article 2c, Insurance

57 This article decreases by € 1,000. It has been adjusted to reflect actual expenses, plus an estimated 2% inflation rate (see para. 54). This article includes fire, theft, goods and equipment, liability and travel insurance for the PB.

Article 2d, Cleaning

58 This article increases by € 7,800. It reflects current expenses plus an inflation adjustment as applied by the service provider in the current FY (see para. 54). It covers cleaning costs for the office. Also, upon retirement of the General Services Officer (and the non-replacement of this staff position), some cleaning and maintenance responsibilities that fell under the responsibility of that Officer had to be shifted to the cleaning company. It should be noted that the current contract with this service provider was recently renegotiated and adjusted to the higher costs resulting from inflation.

Article 2e, Office supplies

59 This article remains unchanged. It includes costs for office supplies, stationery, etc., necessary for the operation of the PB during FY 2024-2025.

Article 2f, Telecommunication / postage

60 This article remains unchanged. It covers telecommunication costs for the VOIP and telephone conference call system used at the PB, as well as postage costs.

Article 2g, Fund maintenance / equipment

61 This article remains unchanged. It covers maintenance costs for the office space and general office equipment (e.g., the annual carpet cleaning, treatment of the wooden floor in the kitchen, servicing of the air conditioning in the conference room and the server room, repairs, etc.). No reappropriations (cross-funding), from or to other Funds, are foreseen in FY 2024-2025 (see Annex I).

c. Article 3, IT

62 A robust, secure, and efficient IT infrastructure is essential to enable smooth office operations, including via telework. The continued maintenance and updating of the IT infrastructure is of paramount importance.

Article 3a, Support / maintenance

63 This article increases by € 1,000. It reflects current expenses plus an estimated 2% inflation rate (see para. 54). It covers the PB’s external IT support and maintenance costs.

Article 3b, Software licenses / hardware

64 While this article has been adjusted to reflect current expenses, plus an estimated 2% inflation, the net effect is that it remains unchanged. The article mainly includes costs for computer licenses.

19

Article 3c, Internet / website(s)

65 This article increases by € 300. It has been adjusted to reflect current expenses, plus an estimated 2% inflation. It includes costs for Internet and HCCH website(s).

Article 3d, Fund IT / equipment

66 This article remains unchanged. This Fund is used as a reserve for updates to the IT infrastructure and equipment that are required but that cannot be absorbed by the other lines in Article 3 (e.g., to replace servers). No reappropriations (cross-funding), from or to other Funds, are foreseen in FY 2024-2025 (see Annex I).

d. Article 4, Copying, printing and publications

Article 4a, Lease / production supplies

67 This article increases by € 10,150. It reflects current costs of the lease contract plus an inflation adjustment as applied by the supplier in the current FY (see paras 53-54). It covers costs to lease copiers and printers for the PB, as well as costs for supplies needed to produce all publications. The lease contract for the copiers was entered into as a cost-saving measure in order to produce all HCCH publications in house, rather than having them produced by external publishers, which would be significantly more expensive.

Article 4b, External design, lay-out

68 This article remains unchanged. With a view to reducing costs, the PB is now handling almost all of this work internally. This article primarily includes costs for photo credits in publications.

Article 4c, Fund Recueil

69 This article remains unchanged. This Fund is a reserve for the publication of the Collection of HCCH Instruments (Recueil). As the most recent edition of the Collection of HCCH Instruments was published in March 2020, this Fund will be used for possible reprints of the 2020 edition or the publication of a subsequent new edition. No reappropriations (cross-funding), from or to other Funds, are foreseen in FY 2024-2025 (see Annex I).

e. Article 5, Library

Article 5a, Subscriptions

70 This article remains unchanged. It covers costs for subscriptions that are necessary to maintain a basic, up-to-date library at the PB and to enable the legal staff to conduct its work.

Article 5b, Purchases

71 This article remains unchanged. The article funds necessary purchases to maintain a basic, up-to- date library at the PB and to enable the legal staff to conduct its work.

f. External translations

72 The PB assures translations using an internal Translator / Reviser for French and Spanish respectively, and several external translators. Generally, the internal Translator / Reviser is responsible for the day-to-day translation work, including Preliminary Documents for CGAP, CDR and SC meetings, circulars, presentations, factsheets, promotional materials, and speeches. External translators are used for more voluminous publications, such as Practical Handbooks and Guides to Good Practice, as well as other technical publications such as Explanatory Reports. Internal staff cannot be used for these voluminous publications as they would be blocked for

20

multiple weeks or months. This combination of internal Translators / Revisers and external translators allows the PB to manage both short-term and long-term translation work, and to do so cost-effectively.

Article 6a, French

73 This article remains unchanged. It covers translations of documents and communications into French. This article remains under pressure and does not even compensate for inflation costs.

Article 6b, Spanish

74 This article increases by € 15,000. As mentioned in paragraph 8, as of FY 2024-2025 this article must cover the full costs of € 38,500 for external translations into Spanish.

g. Article 7, PB missions

75 Compared to the Budget for FY 2023-2024, this article increases by € 3,000 (as opposed to (€ 4,000 in Draft Budget 2 and € 6,600 in Draft Budget 1). This slight increase still does not bring the nominal amount of the article back to a pre-Covid level (€ 76,500 in FY 2019-2020). Considering the sharp increase in flight and hotel costs following the COVID-19 pandemic, this article has effectively decreased significantly compared to pre-pandemic times. This article, however, is essential to allow the PB to conduct relevant missions to serve the HCCH’s strategic goal of universality and inclusiveness.

76 This article needs to cover expenses for important missions of approximately 15 members of the PB. Travel expenses (incl. daily subsistence allowances) are paid in keeping with procedures outlined in the Staff Rules, and the SG continues to apply a strict travel policy for each mission, where prior approval by the SG is required. Organisers of seminars, workshops, or any other meeting to which the PB is invited are regularly asked to contribute to the mission costs (travel, hotel, or both) of PB representative(s), if possible. Such contributions are received on various occasions, although they sometimes only partially cover costs. Participation in meetings via videoconference (instead of in-person participation with related travel expenses) will continue to be used when possible and appropriate.

h. Article 8, Financial operation

Article 8a, Bank fees

77 This article decreases by € 1,000. It covers costs for operating PB bank accounts and PB transaction costs.

Article 8b, Audit fees

78 While this article has been adjusted to reflect current expenses, plus an estimated 2% inflation, the net effect is that it remains unchanged (see para. 54). The article includes the annual costs to audit the HCCH accounts and pensions. It also includes annual costs for preparatory actuarial pension work for the audit. It should be noted that fees for the auditing of VCs are not included in this article and are covered directly by VCs.

i. Article 9, Representation (incl. for international meetings)

79 Compared to the Budget for FY 2023-2024, this article increases by € 1,500 (as opposed to € 2,000 in Draft Budget 1). It covers costs for the SG reception (which, for cost efficiency reasons, is always held during the CGAP meeting) and other small functions offered by the SG or the PB during HCCH meetings. Some basic expenses have also increased as a result of services and suppliers raising prices. This article also covers work-related lunch or dinner invitations during the

21

FY, small gifts for experts who chair meetings, flowers, etc. It also includes a small amount for organising a promotional day for the work of the HCCH as part of The Hague International Open Day, during which many Hague-based international organisations are represented. These representational activities are an important element of international diplomacy and outreach. They also serve the HCCH’s strategic goal of universality and inclusiveness.

j. Article 10, Overhead reimbursement iSupport and eCODEX

80 This article reflects a negative expense (a payment to the HCCH) of € 34,000 (compared to € 29,000 in Draft Budget 2 and to € 40,000 in Draft Budget 1) expected from the EU Action Grant for iSupport and eCODEX. The payment compensates the HCCH for overhead expenses incurred by the PB for the use of office space and equipment for this project, as well as for salary costs (on a pro-rata basis) for one staff member occasionally contributing to the project.31

k. Article 11, Unforeseen

81 This article remains unchanged. It is used to cover any unforeseen expenses during the FY.

82 The PB uses this line exceptionally, either when the relevant costs could not be foreseen at all, when the nature of the costs cannot be categorised under any other budget article, or when it is possible to cover expenses that would otherwise have to fall under a particular fund. Although this article is most likely too low by any contingency budget principles (it only amounts to approx. 0.07% of the total Budget), it remains an important budget line given that the HCCH Budget is very clearly defined per article, and at times unexpected expenses arise during a FY that cannot be allocated to an existing budget line as defined.

2. Meetings

83 As mentioned above (paras 6b, 11 et seq.), meeting costs are higher because rental costs and interpretation costs have increased for FY 2024-2025. Costs are based on rental fees at the Hague Academy for one SC meeting on the practical operation of the Service, Evidence, and Access to Justice Conventions (to be held in July 2024 as an in-person meeting with the possibility of online participation and with online interpretation), CGAP 2025 (to be held as an in-person meeting with the possibility of online participation and with in-person interpretation), and CDR 2025 (to be held as in-person meeting at the premises of the PB with the possibility of online participation and with online interpretation). While costs for interpretation remain subject to available interpreters and their fees, and depending on experience that can be gained during SC meeting in July 2024 and the CDR 2025 meeting, the PB will continue to assess what further cost savings can be expected if online interpretation is offered at future meetings. The SC meeting is budgeted on a model with one day for set-up, 3.5 meeting days, and a half day for breakdown time (costs are for five days in total). Since the Carnegie Foundation charges for the rent of the Hague Academy building over weekends, even if the room is not being used, the SG continues to suggest that SC meetings be held from Tuesday mornings to Friday noon.

84 It should be noted that while there was also only one SC meeting32 held in the current FY, it was more expensive as this meeting was exceptionally held for longer and over two weeks. This explains why, despite higher fees and costs for interpretation booths, Article 12g effectively decreases in FY 2024-2025 (see paras 94 et seq.).

31 Rules applicable to this kind of EU action grant provide for a flat rate of 7% for indirect costs, in order to cover the

overhead costs incurred by project participants. Indirect costs are distinguished from compensation to the HCCH for the services to iSupport and eC0DEX of PB staff members whose salaries are paid out of the HCCH Budget. The exact final value depends on the European Commission accepting the costs and the amount of the costs actually incurred.

32 SC meeting on the practical operation of the 1980 Child Abduction and 1996 Child Protection Conventions (October 2023).

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85 Meeting costs for the SC meeting in FY 2024-2025 are based on 2023-2024 prices, as the Carnegie Foundation has agreed to maintain these prices for use of the Hague Academy for the SC meeting in the first week of July 2024. After this, a new pricing scheme for 2024-2025 will apply till June 2025. This Budget, therefore, has been adjusted to take into account the new rental fees at the Hague Academy for CGAP 2025. Rental costs at the Hague Academy have been removed from this Budget for CDR 2025, as a cost saving measure suggested by CGAP and approved by CDR at its May 2024 meeting (see paras 14 and 17). It should be noted that although CDR will no longer be considered an off-site meeting in the next FY, the presentation of costs under Article 12d to 12f has been maintained in order to allow for clear comparison of costs between FYs.

86 As stated in paragraph 10, in accordance with the plans approved by CDR in May 2023, costs for Spanish interpretation and Recording Secretaries working in Spanish at meetings have to be added to the Budget as of FY 2024-2025 (reflected in Art. 12). In Annex II these costs were projected at € 55,000 in total for the meetings of the SC, CGAP and CDR, with € 10,000 of a VC used to offset some of these costs (reflected in Art. 21b), bringing the effective costs to be covered through the Budget for FY 2024-2025 to € 45,000. However, as explained in paragraph 10 and in footnote 10, for FY 2024-2025 these costs are expected to be approximately € 19,000 lower than envisaged and reflected in Annex II.

87 This approved Budget for FY 2024-2025 also includes costs for 24 days of Experts’ Group or Working Group meetings relating to normative work at the PB. These meeting days at the PB may generate additional costs (see Art. 13 for details). As in previous FYs, the PB will do its best to limit staff overtime, and it has projected a lower amount for these costs in FY 2024-2025 (€ 125 per meeting day). Any governance related meeting days to be held at the PB generally do not generate meeting costs.

a. Article 12, Off-site meetings (Hague Academy)

CGAP

Article 12a, Venue

88 Compared to the Budget for FY 2023-2024, this article increases by € 10,550 (as opposed to € 12,000 in Draft Budget 1). This article covers setting-up and dismantling costs, the rent of the large meeting room in the Hague Academy building, the interpretation booths for three languages and other equipment, workspaces for staff, two additional meeting rooms, service costs at the venue (all under the new, higher fee structure for FY 2024-2025), as well as the costs for technical support to enable online participation. Rental costs for CGAP are budgeted on a model with one day for set-up, 3.5 meeting days, and a half day for breakdown time (costs are for five days in total).

Article 12b, Interpretation (English, French, and Spanish)

89 This article increases by € 11,700. It covers interpretation costs for six interpreters at a 3.5-day CGAP meeting. Interpretation costs have mainly increased due to two new interpreters required for Spanish interpretation to ensure proper composition of interpretation teams (on the reason for budgeting for in-person interpretation for CGAP 2025, see fn. 10).

Article 12c, Additional personnel / moving

90 This article increases by € 4,700 mainly in order to hire two additional Recording Secretaries for Spanish. It covers overtime expenses of some administrative staff members of the PB, costs for six Recording Secretaries during this meeting, as well as costs for movers. The PB is no longer hiring additional personnel for catering and other assistance during the CGAP meeting. The new process put in place by the PB for preparing the minutes of CDR meetings cannot be applied to CGAP

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meetings; as CGAP meetings last longer, the PB needs to hire a team of Recording Secretaries to rotate.

CDR

Article 12d, Venue

91 Compared to the Budget for FY 2023-2024, this article decreases by € 9,500 (as opposed to increasing by € 5,050 in Draft Budget 1), following CGAP’s recommendation and CDR’s approval to hold CDR 2025 in person at the premises of the PB, with the possibility of online participation and online simultaneous interpretation.33 While costs remain subject to confirmation depending on available interpreters and fees, when using the current pricing scheme for interpreters as a model, it is estimated that € 17,050 will be saved by holding the CDR meeting at the premises of the PB and by providing remote interpretation. It will, therefore, not be necessary to rent the large meeting room in the Hague Academy Building, interpretation booths for three languages and other equipment, and pay for other service costs at the Hague Academy in FY 2024-2025.

Article 12e, Interpretation (English and French)

92 Compared to the Budget for FY 2023-2024, this article decreases by € 1,050 (as opposed to increasing by € 2,100 in Draft Budget 1), following CGAP’s recommendation and CDR’s approval to hold CDR 2025 in person at the premises of the PB, with the possibility of online participation and online simultaneous interpretation.34 It covers interpretation costs for four interpreters, including one new interpreter for Spanish interpretation to ensure proper composition of interpretation teams.

Article 12f, Additional personnel / moving

93 This article decreases by € 200. The article includes overtime expenses of some administrative staff members of the PB, and costs for only one Recording Secretary during the CDR meeting (compared to two in the current FY).

SC and other meetings

Article 12g, Venue

94 This article decreases by € 19,250 based on CGAP’s plans to hold one SC meeting (see paras 11, 15, and 84-85).

95 This article covers setting-up and dismantling costs, the rent of the large meeting room in the Hague Academy Building, the interpretation booths for three languages and other equipment, workspaces for staff, two additional meeting rooms, as well as the costs for technical support to enable online participation. The costs are based on the 2023 pricing scheme (see para. 85) for a SC meeting on the practical operation of the Service, Evidence, and Access to Justice Conventions based on a model with one day for set-up, 3.5 meeting days, and a half day for breakdown time (costs are for five days in total).

96 The PB will continue to strictly assess the use of any extra meeting spaces during these meetings for use only when absolutely necessary.

33 See para. 4 above, referring to CGAP 2024, C&D No 69, fn. 10, and para. 14. 34 Ibid.

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Article 12h, Interpretation

97 This article decreases by € 10,650 (compared to increasing by € 1,850 in Draft Budget 1 and Draft Budget 2) as a result of a change in interpretation provisions for this meeting. While the PB had previously envisaged in-person interpretation for this meeting, it has been able to establish a team of interpreters to conduct this work mainly online and remotely. It covers interpretation costs for six interpreters at a 3.5-day SC meeting on the Service, Evidence, and Access to Justice Conventions.35

Article 12i, Additional personnel / moving

98 This article increases by € 1,250 mainly in order to hire two additional Recording Secretaries for Spanish. It covers overtime expenses of some administrative staff members of the PB, costs for six Recording Secretaries during this meeting, as well as costs for movers. The PB is no longer hiring additional personnel for catering and other assistance during this meeting. The new process put in place by the PB for preparing the minutes of CDR meetings cannot be applied to SC meetings; as SC meetings last longer, the PB needs to hire a team of Recording Secretaries to rotate.

Article 13 On-site meetings (PB)

99 This article remains unchanged. These costs mainly cover overtime expenses of some administrative staff members of the PB during meetings of Working / Experts’ Groups. As stated in paragraph 87, costs are projected based on 24 meeting days at the PB. As a result of its strict overtime policy and efforts to limit overtime, these costs are now estimated at € 125 per day.

100 Any meeting days related to governance matters are generally not expected to generate additional costs.

b. Article 14, Other costs relating to HCCH meetings

Article 14a, Supplies, refreshments and facilitation costs

101 This article increases by € 2,700.36 This article is also used to cover costs for the supplies and materials (incl. folders, badges, USB sticks) used and distributed at any of the HCCH meetings (incl. seminars). Additionally, during HCCH meetings and other events, light working lunches and, dinners (incl. for Drafting Committees) are sometimes covered through this article. This article increasingly also has to be used in relation to meetings taking place at the PB (incl. meetings of Experts’ and Working Groups).

Article 14b, Travel consultants and external experts

102 This article remains unchanged. It may be used to offset (some) travel costs for external experts who contribute to the work of the HCCH, such as experts chairing Working / Experts’ Group meetings and whose costs are not covered by their relevant authorities. In light of significantly increased travel costs, this article has effectively decreased for a number of years. This article is used for both off-site and on-site meetings. As in previous years, the PB does not use assessed contributions to cover any travel / hotel costs of participants who otherwise could not afford to attend HCCH meetings.

35 See fn. 10. 36 It should be recalled that since March 2020, with a view to saving costs, coffee / tea is no longer provided for free during

CGAP and SC meetings (this also allows for some cuts in Art. 12c and 12i). Refreshments are made available for purchase from a caterer.

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3. Present and future pension liabilities

a. Article 15, Retirement or survivors’ pensions

103 Compared to the Budget for FY 2023-2024, this article increases by € 44,500 (as opposed to € 53,100 in Draft Budget 1)37 to cover the full, mandatory contribution of Member States to the pension schemes currently in force at the HCCH. As is the case for salaries, this increase is imposed by the HCCH’s regulatory framework, and thus beyond the SG’s discretion.

104 This article is determined in direct correlation with Article 1a. It has to represent 23.6% of salaries for those staff members who fall under the Co-ordinated Pension Scheme (COPS), and 18.8% of salaries for those staff members who fall under the New Pension Scheme (NPS) (as per the rules that govern these pension schemes). There are 12 active staff members who fall under the COPS, and 16 staff members who fall under the NPS.

105 Currently, the HCCH has 11 pensioners (all under the COPS).

106 Pension costs relating to both COPS and NPS are currently financed through the contributions of staff, the payments of the accrued unfunded liabilities, the return on the investments of the Pension Reserve Fund (PRF), and Article 15 of the Budget which represents the Organisation’s (employer’s) contributions to the pension schemes (Art. 15 covers present and future liabilities).

107 It is recalled that the Organisation is required to provide pension benefits to all eligible staff or former staff of the Organisation under the pension schemes currently in force, and that all Member States must cover the costs relating to present and future pension liabilities, independently of when they became a Member of the HCCH and whether or not they had or still have to pay their full share of the accrued unfunded liabilities (see the explanations at the bottom of the Budget reflected in III., and Overviews I and II following the Budget).

b. Article 16, Pension administration by the ISRP

108 This article decreases by € 700. It covers current costs for the verification and administration of pensions for all officials and retirees of the HCCH by the ISRP.

B. Revenues

1. Article 17, Contribution of Member States

109 Compared to the Budget for FY 2023-2024, this article increases by € 251,393 (as opposed to € 272,393 in Draft Budget 2 and € 325,343 in Draft Budget 1). It reflects the total assessed contribution of all Member States to cover the operating budget of the HCCH (i.e., costs relating to the Operation of the PB, International Meetings, and Present and Future Pension Liabilities). The total assessed contributions from Member States are 5.16% higher than in the previous FY. The value of one budgetary unit and the full amounts to be paid by each Member State are briefly explained below under F (see paras 122 et seq.; see also the explanations at the bottom of the Budget reflected in III., and Overviews I and II following the Budget).

110 The approved Budget for FY 2024-2025 is based on a total of 640.5 units (see also paras 32-34). The increase per unit amounts to € 392.49 or 4.99% (for more details on the overall results, see paras 35-37).

37 The lower increase compared to Draft Budget 1 is mainly due to the non-transfer of the iSupport position to the Budget.

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2. Article 18, Allocation of reserves from FY 2022-2023

111 To partially offset the increase in operational expenses, in May 2024, CDR approved that an amount of € 72,000 be used from the net operational surplus from FY 2022-2023 as additional revenue in the Budget for FY 2024-2025.38

112 This approach also allows for part of the surplus to be redistributed to Member States by lowering Member States’ assessed contribution for FY 2024-2025 by € 72,000, without undertaking the time and resource-intense burden of calculating, setting up and executing reimbursements by way of more than 90 bank transfers of relatively low amounts.

3. Article 19, Contribution of Member Organisation

113 This article remains unchanged. It relates to the membership of the EU. According to Article 9(2) of the Statute of the HCCH, a Member Organisation is not required to contribute in addition to its Member States to the annual Budget of the HCCH but pays a sum to be determined by the HCCH, in consultation with the Member Organisation, to cover additional administrative expenses arising out of its membership. The amount is generally determined for a period of three FYs. The current amount of € 39,000 was agreed on in 2022 for application as of FY 2022-2023.

4. Article 20, Income derived from sales of publications

114 This article increases by € 3,000. While in the last FYs the revenue generated under this article has exceeded the budgeted amounts (in particular in relation to sales of the Practical Handbooks on the Service and Evidence Conventions), the SG continues to prefer to take a cautious approach for the projection of income derived from the sale of publications as the revenue fluctuates and is by no means guaranteed. Nonetheless, given that the projections of sales also include the release of the new editions of the Practical Handbooks on the Service and Evidence Conventions in the next FY, this increase can be justified. The sales of these publications remain a significant source of revenue for the HCCH.

C. VCs for the implementation of Spanish

1. Article 21a, VC for Spanish translations in FY 2023-2024

115 In May 2023 CDR approved the use of VCs of € 25,000 to support the implementation of Spanish over two FYs. Spain and Mexico then made VCs to cover this amount during the course of FY 2023- 2024 (see paras 6a, and 8-10). Therefore, the use of € 15,000 from VCs is reflected in Article 21a of the presentation of the Budget for FY 2023-2024 in this document (see also Annex II).

2. Article 21b, VC for Spanish interpretation in FY 2024-2025

116 This article reflects the use of € 10,000 of VCs from Spain and Mexico to support the implementation of Spanish as an official language, as approved by CDR in May 2023. It is to be used to offset new costs related to Spanish interpretation and Recording Secretaries working in Spanish (see paras 6a and 10, as well as Annex II).39

38 Although this amount is presented as revenue for ease of reference, it should be noted that under applicable accounting

principles, it does not technically qualify as revenue or income; thus, following consultations with the HCCH auditors, this amount will be processed as an allocation of a previous surplus using reserves from the financial statements of FY 2022- 2023.

39 The announcement by Spain of an additional VC, likely to be made in the course of 2024, would help to accelerate the implementation of Spanish (incl. the translation of historic documents and various HCCH regulations), and to finance actions towards the implementation of Spanish that were not envisaged originally (e.g., offering simultaneous interpretation at the recent CGAP 2024 meeting, or a reception during the SC in July 2024, which will coincide with the actual entry into force of Spain as an additional official language).

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D. Other VCs

1. Article 22a, VC from Members

117 This article was introduced following the entry into force of the 2016 Fin. Regs. Under Article 5(2)(iii) “any other income, including monetary VCs communicated to the PB in writing, donations and revenues of a regular nature” shall be included in the Budget. In order to provide Members with up- to-date information on all VCs received during the FY from Member States, the PB provides an overview of all VCs received on a monthly basis.40 For presentation this article has been split into two sections as of the Budget for FY 2024-2025 (related to contributions for Members and non- Members).

2. Article 22b, VCs from non-Members

118 This article was introduced following the entry into force of the 2016 Fin. Regs. Under Article 5(2)(iii) “any other income, including monetary VCs communicated to the PB in writing, donations and revenues of a regular nature” shall be included in the Budget. In order to provide Member States with up-to-date information on all VCs received during the FY from non-Members, the PB provides an overview of all VCs received on a monthly basis.41 For presentation this article has been split into two sections as of the Budget for FY 2024-2025 (related to contributions for Members and non-Members).

E. Accrued unfunded pension liabilities (Art. 23)

119 This article remains unchanged. Contrary to the present and future pension liabilities, which are to be paid by all Member States, the accrued unfunded pension liabilities are to be paid only by States that were Members on or prior to 1 July 2010 and which have not yet paid off their full share of these liabilities (see CDR decision dated 6 July 2010).42 Payments for accrued unfunded pension liabilities are made in addition to assessed contributions. The remaining annual amount of the accrued unfunded liabilities to be paid, € 197,394, will be divided among the Member States that continue to pay their share in these costs annually (347.5 units, i.e., € 568.04 per unit).

120 Importantly, while Austria, Brazil, Georgia, Poland, and the Russian Federation have been reclassified under the UPU system in recent years, these reclassifications do not affect these States’ payment of their respective share of accrued unfunded pension liabilities. These shares were established in a fixed repayment scheme by CDR in 2010 and cannot be changed. Until these States have paid their full share of accrued unfunded pension liabilities, the PB will have to apply two different unit schemes to calculate these States’ full contribution to the Budget.

121 Despite appearing after Revenues in the Budget, the accrued unfunded pension liabilities are an additional expense. They are listed at the end of the Budget because they do not have to be paid by all Member States. The total of Article 22 (€ 197,394) added to the total of Expenses (€ 5,064,650), equals the total Budget / total revenues at the end of Revenues (€ 5,262,044).

F. Explanation of contributions to be paid by Member States: Overview I and Overview II

122 The following provides a brief explanation of the two schemes applied to the calculation of Member States’ contributions.

40 Available at https://www.hcch.net/en/secure-portal/governance1/voluntary-contributions. 41 Available at https://www.hcch.net/en/secure-portal/governance1/voluntary-contributions. 42 34% of Member States have paid off their share of the accrued unfunded liabilities.

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123 Overview I lists the total (incl. the accrued unfunded liabilities mentioned in para. 119) contributing share of each State that was a Member on or prior to 1 July 2010 and that has not yet paid off its full share in the accrued unfunded pension liabilities. In other words, in addition to their annual contribution to the operating Budget (incl. the present and future pension liabilities), they must also pay their annual share in the total accrued unfunded pension liabilities. The contribution to the operating Budget (incl. the present and future pension liabilities), € 2,653,160, is divided by 345 units; the contribution to accrued unfunded liabilities, € 197,394, is divided by 347.5 units. The total in Overview I is € 2,850,554. The total per unit is € 8,258.36 (except for the five States mentioned in para. 120).

124 Overview II lists the total contributing share of each State that was a Member on or prior to 1 July 2010 and that has paid off its full share in the accrued unfunded pension liabilities, or that became a Member after 1 July 2010 (and thus does not have to pay for accrued unfunded pension liabilities at all). These Member States only contribute to the operating Budget (incl. the present and future pension liabilities). The total, € 2,272,490, is to be divided by 295.5 units which equals € 7,690.32 per unit.

125 Each Member State’s contribution is listed in either Overview I or in Overview II, and Member States are invited to refer to their respective Overview for this information.

A N N E X E S

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Annex I – Fund Overview and Projections 1 As a result of the application of Dutch Generally Accepted Accounting Principles (GAAP) to the operational Budget of the HCCH (CDR decision taken in

2017), the previously used system of provisions was abandoned and instead converted into a system of reserve funds. The five funds identified in the table below have been established for operational expenses that will be incurred in all these areas. Actual expenses in the fields covered by the respective funds are difficult to predict as they are subject to factual developments that may or may not occur. The fund structure, accompanied by targets (limits) for each of the funds and the recognition that the funds may have to be replenished at the end of an FY, allows for more stable budgeting towards these expenses.

2 Due to the reassessment of targets for the funds decided in 2019, some funds may temporarily have higher balances than targeted. Dutch GAAP accounting principles do not allow for fund appropriations adopted by CDR to run through the income statement again (i.e., they cannot be included in the Budget again). Therefore, subject to the actual balance of funds, reappropriation between funds (cross-funding) has been used as a mechanism to rebalance funds, and it may continue to be used for future FYs. When the overall balances of the funds do not allow for the cross-funding approach, top- ups from the Budget will be required to meet the targets. Given the current levels of funds and expected expenses to be covered by the funds in the current FY, no cross-funding is foreseen in FY 2024-2025. Top-ups may be necessary in future FYs.

Established / continous Funds Relocation Staff Rules Office maintenance /

equipment IT / equipment Recueil

Minimum target for Funds 30,000.00 125,000.00 25,000.00 22,500.00 15,000.00

Balance at 30 June 2022 44,436.00 116,173.00 44,114.00 27,528.00 20,180.00 CDR approved appropriations from budget FY 22-23 - - - - - CDR approved reappropriations from other funds (cross-funding) FY 22-23 7,100.00 -7,100.00 Expenses covered FY 22-23 -24,017.00 -1,366.00 -6,979.00 -11,713.00 -

Balance at 30 June 2023 27,519.00 114,807.00 30,035.00 15,815.00 20,180.00

CDR approved appropriations to be added from budget FY 23-24 - 25,000.00 - - - CDR approved reappropriations from other funds (cross-funding) FY 23-24 9,060.00 - - - -9,060.00 Estimated expenses to be covered FY 23-24 - -15,000.00 -5,000.00 - -

Expected balance at 30 June 2025 after reappropriation, top-up or expenses in FY 23-24 36,579.00 124,807.00 25,035.00 15,815.00 11,120.00

Difference between target and Fund -6,579.00 193.00 -35.00 6,685.00 3,880.00

Proposed Fund reappropriations in FY 24-25* - - -

Proposed top-up from Budget FY 24-25 to reach target** - - - - -

Expected balance at 30 June 2025 36,579.00 124,807.00 25,035.00 15,815.00 11,120.00

Annex I – Fund Overview and Projections

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3 It should be noted that when considering technical fund accounting, fund additions and withdrawals materialise only one year after the actual expenses are incurred and once they have been processed through the income statement. For example, an expense that materialised in the course of FY 2022- 2023 would only be covered by the relevant fund (withdrawn) in FY 2023-2024. Similarly, replenishment of a fund through the Budget would only materialise (i.e., be credited to the fund) in the subsequent FY.

The minimum targets for each of the funds

Fund Relocation

4 This Fund should be sufficient to cover two to three relocations (and related expenses) per FY. This could relate to either staff arrivals or departures. Expenses may vary depending on entitlements (incl. family situations) of staff.

5 The minimum target for this Fund is set at € 30,000. No payment to this Fund is envisaged through the Budget for FY 2024-2025.

Fund Staff Rules

6 This Fund includes a sub-fund of € 32,500, as per the CDR decision in May 2021, which is ring-fenced and only to be used for a loss of employment indemnity, if materialised.1

7 Additionally, approximately € 60,000 is held to mitigate the risk of unknown and exceptionally high expenses in the event dispute procedures or indemnity payments (above the ring-fenced amount) are required. Other expenses covered from the Staff Rules Fund as elaborated in the notes relating to Article 1e of the Budget are also covered through this Fund.

8 The minimum (total) target for this Fund was increased from € 100,000 to € 125,000 by CDR in May 2023, in order to compensate for costs that could arise as a result of not hiring a new Head of HR in FY 2023-2024. No payment to this Fund is envisaged through the Budget for FY 2024-2025.

Fund Office maintenance / equipment

9 This Fund needs to cover expenses to maintain the office and office equipment in a functional state. It also serves to cover any repairs to the equipment, furniture and office space.

10 The minimum target for this Fund is set at € 25,000. No payment to this Fund is envisaged through the Budget for FY 2024-2025.

1 In the hypothetical case of an Official at Grade A2, who is not entitled to any allowances (e.g., family and / or child allowance) and who has been with the Organisation for any term between

five and 10 years, the amount would reach approx. € 42,000. Based on the actual staff data of the PB (incl. number of years spent at the PB), there is, however, a strong likelihood that a possible indemnity would be (significantly) higher. The ring-fenced amount may thus have to be increased in the future.

Annex I – Fund Overview and Projections

32

Fund IT / equipment

11 This Fund covers maintenance of the IT environment to ensure security and compliance with adequate standards. This includes periodic updates and investments for key infrastructure and equipment, if and when required.

12 The minimum target for this Fund is € 22,500 given how crucial the IT infrastructure is to the operation of the PB in the current working environment, in particular as regards teleworking and videoconferencing. No payment to this Fund is envisaged through the Budget for FY 2024-2025.

Fund Recueil

13 This Fund covers the cost for the publication and possible reprints of the Collection of HCCH Instruments (Recueil).

14 The minimum target for this Fund is € 20,000. The Fund remains at a sufficient level for FY 2024-2025 and would allow for a full reprint of the 2020 edition of the Recueil if needed, as well as making savings for the next edition. No payment to this Fund is envisaged through the Budget for FY 2024- 2025.

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Annex II – Overview of the costs relating to the implementation of Spanish as an Official Language over the next three FYs (as presented in Annex II of the approved Budget for FY 2023-2024)

Note inserted in April 2024 (see also the comments above in footnote 10):

While the figures presented in this Annex were based on an online interpretation model for Spanish, the approved Budget for FY 2024-2025 is based on in-person interpretation costs in English, French, and Spanish at CGAP 2025, and online interpretation costs in English, French, and Spanish at the SC meeting to be held in July 2024. The net result is that the costs for phase two of implementing Spanish will be approximately € 19,000 lower than envisaged in this Annex. This is mainly due to the change in interpretation models provided at each meeting, and the format for the CDR 2025 meeting, which will be held in person at the premises of the PB, with online interpretation. This format is significantly more cost- effective than an in-person CDR meeting at the Hague Academy Building with in-person interpretation. Additionally, the PB is implementing a new, more cost-effective process for the production of the CDR minutes (this process cannot be implemented for SC and CGAP meetings which last longer and thus require a team of Recording Secretaries).

1. As decided by CGAP during its meeting in March 2023, with the financial implications approved by CDR during its meeting in May 2023, Spanish will become an additional official language on 1 July 2024 (i.e., when translation, administrative support, and interpretation can all be offered).

2. This Annex provides a general overview of the costs relating to the implementation of Spanish as an additional official language over the next three FYs. This overview is presented following (i) the initial proposal annexed to Draft Zero Budget (a proposal which amounted to € 510,000), (ii) the further proposal annexed to Draft Budget 1 (€ 151,500), and (iii) the proposal reflected in Prel. Doc. No 19 bis for CGAP 2023 (€ 139,000).

3. This overview is based on the assumption that the PB would receive € 25,000 in the form of voluntary contributions for the introduction of Spanish in 2023, of which € 15,000 would be used in FY 2023-2024, and € 10,000 in FY 2024-2025.

4. Caveat: The figures are subject to adjustments, in particular inflation, costs for licenses, the Work Programme decided by CGAP (incl. the number of SC meeting days), the further experience with online simultaneous interpretation as well as fees for interpreters, and the need for external translations. The PB will provide Member States with any information that becomes available in this regard for subsequent FYs.

FY 2023-2024 (reflected in this Approved Budget)

Software € 19,000 (reflected in Art. 3b)

PB positions € 22,500 (reflected in Art. 1a)

External translations € 38,500 of which € 15,000 would be absorbed by voluntary contributions; thus to be absorbed by Budget: € 23,500 (reflected in Art. 6b)

Printing € 2,500 (reflected in Art. 4a)

Total for Budget € 67,500

FY 2024-2025

The above costs of € 67,500 would be included in the baseline of this Budget.

Annex II – Overview of the costs relating to the implementation of Spanish as an Official Language over the next three FYs (as presented in Annex II of the approved Budget for FY 2023-

2024)

34

In addition, the following costs would be included for Spanish:

External Translations € 15,000 (to absorb the costs covered by voluntary contributions in 2023-2024) (if no further voluntary contributions received)

Simultaneous Interpretation & Recording Secretaries (8 days) € 55,000, of which € 10,000 would be absorbed by voluntary contributions; thus to be absorbed by Budget: € 45,000

Total additional costs for Budget € 60,000

[Total Budget costs for 2023-2025 € 127,500]

FY 2025-2026

The above costs of € 127,500 would be included in the baseline of this Budget. In addition, € 10,000 would have to be included to absorb the costs covered by voluntary contributions in 2024-2025. The recurrent costs for Spanish to be paid by the Budget would as of then amount to € 137,500 (but only € 10,000 of which would constitute a further increase of the Budget for 2025-2026). Thus, the full costs for the introduction of Spanish would only have to be covered exclusively by the Budget as of the third FY (2025-2026).

The Secretary General

Hague Conference on Private International Law Conférence de La Haye de droit international privé [email protected] www.hcch.net

Regional Office for Asia and the Pacific (ROAP) Bureau régional pour l’Asie et le Pacifique (BRAP) Regional Office for Latin America and the Caribbean (ROLAC) Bureau régional pour l’Amérique latine et les Caraïbes (BRALC)

His Excellency Mr Lauri Kuusing Ambassador of Estonia Embassy of the Republic of Estonia Zeestraat 92 2518 AD THE HAGUE

Our Ref.: 20240625LJM01 The Hague, 25 June 2024

Dear Mr Ambassador,

Following the adoption of the Budget for Financial Year 1 July 2024 – 30 June 2025 (Financial Year 70) by the Council of Diplomatic Representatives (CDR) at its meeting of 21 May 2024, I am pleased to send you a copy of the final Budget as adopted. I refer to Overview I for your State’s contribution for Financial Year 2024-2025, which amounts to

€ 8,258.36 The attached invoice of assessed contributions provides the total contribution to be paid by your State for Financial Year 2024-2025. According to Article 9(1) of the Regulations on Financial Matters and Budgetary Practices adopted on 1 January 2016, “[a]ssessed Contributions from Member States are due in full at the beginning of each Financial Year [i.e., on 1 July], and are required to be paid as soon as possible”. Against this background, I take the liberty of requesting that every effort be made to ensure your State’s prompt payment of its contribution in order to avoid any disruption of the Permanent Bureau’s operations in the coming weeks and months. Your efforts in this regard are greatly appreciated.

Furthermore, according to Article 11(1) of the same Regulations, “the Secretary General shall regularly inform the Council of Diplomatic Representatives of the status of payments of contributions”. As reflected in the attached overview of contributions, 17 Member States (19%) still have outstanding payments due for Financial Year 2023-2024, amounting to € 397,595.47 (8% of the total of assessed contributions for that Year). When the arrears from previous financial years, amounting to € 99,828.72, are added, the total of outstanding payments amounts to € 497,424.19. I am pleased to stress that Estonia is not among the Member States with arrears and I am most grateful for your State’s diligence in this regard. Still, the amount of outstanding payments is a matter of concern and puts the operation of the Permanent Bureau at a serious, short-term risk. If no contributions are received in the next few weeks, the Permanent Bureau will have to start using the Revolving Fund as of July 2024.

2

It is recalled that the Revolving Fund can only finance two full months of the Permanent Bureau’s basic operations. States are thus strongly encouraged to pay any outstanding amounts as swiftly as possible.

I avail myself of this opportunity to renew to Your Excellency assurances of my highest consideration.

Dr Christophe Bernasconi Attachments mentioned.

Legend

Contribution FY69

8.16% 397,595.47 Arrears of 1 year (FY68)

Arrears of 2 years or more

Advance payment FY70

8.73% 497,424.19 *based on Overview I/II respectively

7,865.87 Bank fees / balances Advance payment Outstanding

7,297.83 under €500 to be received for contribution to pay

1 unit * added to invoice FY70 2024-2025 by 30 Jun 2024

ALBANIA 1 2023-2024 7,865.87 7,863.37 2.50 -

ANDORRA 1 2023-2024 7,297.83 7,297.83 -

ARGENTINA 3 2023-2024 23,597.60 23,597.36 0.64 -

0.24

2022-2023 21,532.16 17.40

3,116.00

18,398.76

ARMENIA 1 2023-2024 7,297.83 7,297.83 -

AUSTRALIA 20 2023-2024 157,317.31 157,305.31 12.00 -

AUSTRIA 6 2023-2024 46,627.15 46,627.15 -

AZERBAIJAN 1 2023-2024 7,297.83 7,297.83 -

BELARUS 1 2023-2024 7,865.87 7,865.87 -

BELGIUM 15 2023-2024 109,467.38 109,467.38 -

BOSNIA-HERZEGOVINA 1 2023-2024 7,865.87 7,865.87 -

BRAZIL 10 2023-2024 84,339.06 84,339.06 -

2022-2023 77,454.28 77,358.57

95.71

BULGARIA 3 2023-2024 23,597.60 23,597.60 -

BURKINA FASO 0.5 2023-2024 3,648.91 3,648.91 12,638.86 -

CANADA 33 2023-2024 240,828.23 240,828.23 -

CHILE 3 2023-2024 23,597.60 23,597.60

CHINA 33 2023-2024 240,828.23 240,828.23 -

COSTA RICA 1 2023-2024 7,297.83 2,223.07 469.91 -

5,074.76

CROATIA 1 2023-2024 7,297.83 7,297.83 -

CYPRUS 1 2023-2024 7,865.87 7,865.87 -

CZECH REPUBLIC 5 2023-2024 39,329.33 39,329.33

DENMARK 10 2023-2024 72,978.25 72,978.25 -

2022-2023 66,093.47 66,093.47

2021-2022 64,623.48 64,623.48

DOMINICAN REPUBLIC 1 2023-2024 7,297.83 7,297.83 400.00 -

2022-2023 6,609.35 6,309.26

2021-2022 6,462.35 6,378.73

83.62

300.09

ECUADOR 1 2023-2024 7,865.87 1,543.37 6,322.50

EGYPT 5 2023-2024 39,329.33 39,329.33

2022-2023 35,886.94 35,886.94

2021-2022 35,151.94 35,151.94

EL SALVADOR 1 2023-2024 7,297.83 7,297.83 -

ESTONIA 1 2023-2024 7,865.87 7,865.87 -

FINLAND 10 2023-2024 72,978.25 72,978.25 -

FRANCE 33 2023-2024 259,573.55 259,573.55 -

GEORGIA 1 2023-2024 7,581.85 7,581.85 -

GERMANY 33 2023-2024 240,828.23 240,828.23 -

GREECE 3 2023-2024 23,597.60 23,597.60 -

HONDURAS 1 2023-2024 7,297.83 3.00 7,294.83

HCCH ASSESSED CONTRIBUTIONS AND ARREARS - FINANCIAL YEAR 2023 - 2024 (FY69)

TOTAL OUTSTANDING PAYMENTS FOR CURRENT AND

PREVIOUS FYs

OUTSTANDING PAYMENTS FOR FY69 (2023-2024)

Members Units FY Payment received

June 2024

7,865.87 Bank fees / balances Advance payment Outstanding

7,297.83 under €500 to be received for contribution to pay

1 unit * added to invoice FY70 2024-2025 by 30 Jun 2024

HUNGARY 5 2023-2024 39,329.33 39,329.33

ICELAND 1 2023-2024 7,297.83 7,297.83

INDIA 20 2023-2024 157,317.31 157,243.31 74.00 -

2022-2023 143,547.75 143,535.75

12.00

IRELAND 5 2023-2024 36,489.13 36,489.13 -

ISRAEL 3 2023-2024 23,597.60 23,597.60 -

ITALY 27 2023-2024 197,041.28 197,041.28 -

JAPAN 33 2023-2024 259,573.55 259,573.55 -

JORDAN 1 2023-2024 7,865.87 7,865.87 -

KAZAKHSTAN 1 2023-2024 7,297.83 7,297.83 -

KOREA (REPUBLIC OF) 15 2023-2024 117,987.98 89,292.30 -

28,695.68

LATVIA 1 2023-2024 7,865.87 7,865.87 -

LITHUANIA 1 2023-2024 7,297.83 7,297.83 -

LUXEMBOURG 3 2023-2024 23,597.60 23,597.60 -

MALAYSIA 3 2023-2024 23,597.60 23,597.60 -

MALTA 1 2023-2024 7,297.83 7,297.83

MAURITIUS 1 2023-2024 7,297.83 7,297.83 -

MEXICO 10 2023-2024 72,978.25 72,978.25 -

MOLDOVA 1 2023-2024 7,297.83 7,297.83 -

MONACO 1 2023-2024 7,297.83 7,297.83 -

MONGOLIA 1 2023-2024 7,297.83 6,697.20 600.63

MONTENEGRO 1 2023-2024 7,865.87 7,865.87 -

2022-2023 7,177.39 7,177.39

2021-2022 7,030.39 7,030.29

0.10

MOROCCO 5 2023-2024 39,329.33 39,329.33 -

NAMIBIA 1 2023-2024 7,297.83 7,297.83 -

2022-2023 6,609.35 6,609.35

2021-2022 6,462.35 6,462.35

2020-2021 2,636.19 2,636.19

RF 972.16 972.16

NETHERLANDS 15 2023-2024 109,467.38 109,467.38 -

NEW ZEALAND 5 2023-2024 39,329.33 39,329.33 -

NICARAGUA 1 2023-2024 7,297.83 7,297.83 -

NORTH MACEDONIA 1 2023-2024 7,865.87 7,865.87 -

NORWAY 10 2023-2024 78,658.65 78,658.65 -

PANAMA 1 2023-2024 7,297.83 7,297.83 7,453.87 -

PARAGUAY 1 2023-2024 7,297.83 3,387.81 3,910.02

PERU 1 2023-2024 7,865.87 7,109.84 756.03

2022-2023 7,177.39 63.57

7,021.84

91.98

PHILIPPINES 1 2023-2024 7,297.83 7,285.83 12.00 -

2022-2023 6,609.35 6,597.35

12.00

POLAND 6 2023-2024 46,627.15 46,627.15 -

PORTUGAL 5 2023-2024 36,489.13 36,489.13 -

ROMANIA 3 2023-2024 21,893.48 21,893.48

2022-2023 19,828.04 19,828.04

RUSSIA 20 2023-2024 154,477.10 154,477.10

2022-2023 107,660.81 97,800.81

9,594.92

265.08

SAUDI ARABIA 20 2023-2024 145,956.50 145,956.50 -

SERBIA 1 2023-2024 7,865.87 7,865.87 -

Members Units FY Payment received

June 2024

7,865.87 Bank fees / balances Advance payment Outstanding

7,297.83 under €500 to be received for contribution to pay

1 unit * added to invoice FY70 2024-2025 by 30 Jun 2024

SINGAPORE 4 2023-2024 29,191.30 29,191.30 -

SLOVAK REPUBLIC 3 2023-2024 21,893.48 21,893.48 -

SLOVENIA 1 2023-2024 7,865.87 7,865.87 -

SOUTH AFRICA 10 2023-2024 78,658.65 78,658.65 -

SPAIN 25 2023-2024 196,646.63 196,646.63 -

SRI LANKA 3 2023-2024 21,893.48 21,893.48 -

2022-2023 19,828.04 19,828.04

2021-2022 19,387.04 19,387.04

SURINAME 1 2023-2024 7,865.87 69,382.23

2022-2023 7,177.39

2021-2022 7,030.39

2020-2021 6,894.89

2019-2020 6,929.43

2018-2019 6,853.34

2017-2018 6,835.16

2016-2017 6,797.50

2015-2016 6,541.51

2014-2015 6,456.75

SWEDEN 15 2023-2024 117,987.98 117,987.98 -

SWITZERLAND 15 2023-2024 117,987.98 117,987.98 -

THAILAND 3 2023-2024 21,893.48 21,893.48 -

TUNISIA 5 2023-2024 36,489.13 36,489.13 -

TÜRKİYE 5 2023-2024 39,329.33 39,329.33 -

UKRAINE 5 2023-2024 39,329.33 39,329.33 -

2022-2023 35,886.94 35,886.94

UNITED KINGDOM 33 2023-2024 240,828.23 240,828.23 -

UNITED STATES OF AMERICA 33 2023-2024 259,573.55 109,068.00 -

150,505.55

URUGUAY 3 2023-2024 23,597.60 23,597.60

2022-2023 21,532.16 21,532.16

UZBEKISTAN 1 2023-2024 7,297.83 7,297.83 -

VENEZUELA 1 2023-2024 7,297.83 7,297.83

VIET NAM 1 2023-2024 7,297.83 7,297.83 -

ZAMBIA 1 2023-2024 7,297.83 45,610.19

2022-2023 6,609.35

2021-2022 6,462.35

2020-2021 6,326.85

2019-2020 6,361.39

2018-2019 6,285.30

2017-2018 6,267.12

CONTRIB 2014-2024 5,697,639.26 5,200,215.07 100.50 20,963.28 497,323.69

Members Units FY

8.73% 497,424.19 TOTAL OUTSTANDING PAYMENTS FOR

CURRENT AND PREVIOUS FYs

Payment received

June 2024

OUTSTANDING PAYMENTS FOR FY69 (2023-2024) 397,595.47 8.16%

(out of total MS contribution FY69) 4,871,651.00

TO BE PAID FY 68 13,786.74

Suriname 7,177.39

Zambia 6,609.35

TOTAL 13,786.74

TO BE PAID FY 67 13,492.74

Suriname 7,030.39

Zambia 6,462.35

TOTAL 13,492.74

TO BE PAID FY 66 13,221.74

Suriname 6,894.89

Zambia 6,326.85

TOTAL 13,221.74

TO BE PAID FY 65 13,290.82

Suriname 6,929.43

Zambia 6,361.39

TOTAL 13,290.82

TO BE PAID FY 64 13,138.64

Suriname 6,853.34

Zambia 6,285.30

TOTAL 13,138.64

TO BE PAID FY 63 13,102.28

Suriname 6,835.16

Zambia 6,267.12

TOTAL 13,102.28

TO BE PAID FY 62 6,797.50

Suriname 6,797.50

TOTAL 6,797.50

TO BE PAID FY 61 6,541.51

Suriname 6,541.51

TOTAL 6,541.51

TO BE PAID FY 60 6,456.75

Suriname 6,456.75

TOTAL 6,456.75

SUBTOTAL FY 60, FY 61, FY62, FY63, FY64, FY65, FY66, FY67, FY68 99,828.72

TOTAL OUTSTANDING PAYMENTS FOR CURRENT & PREVIOUS FYs 497,424.19

Members with 2 or more years of arrears and thus under the sanction of Article 11(4) of the Financial Regulations:

Suriname

Zambia

Outstanding payments FY 2018-2019 (FY 64)

BREAKDOWN PER FINANCIAL YEAR (FY)

Outstanding payments FY 2019-2020 (FY 65)

Outstanding payments FY 2021-2022 (FY 67)

Outstanding payments FY 2020-2021 (FY 66)

Outstanding payments FY 2022-2023 (FY 68)

Arrears FY 2017-2018 (FY 63)

Arrears FY 2016-2017 (FY 62)

Arrears FY 2015-2016 (FY 61)

Arrears FY 2014-2015 (FY 60)

June 2024