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The third session of the SBI was chaired by Mohamed Ould El Ghaouth (Mauritania). Delegates recommended that the COP take note of several reports on procedural matters relating to establishment of the permanent secretariat. ANTIGUA AND BARBUDA, on behalf of the G77/CHINA, inquired about FCCC liaison arrangements in New York in addition to those in Geneva. FRANCE questioned the cost, and the matter was referred to informal consultations. The meeting then considered a report on legal arrangements for the secretariat in Germany (FCCC/CP/1996/6/Add.1). FRANCE called for more time to study the document and the Chair agreed to facilitate informal discussions.

The Chair then introduced Agenda Item 7(b) on income and budget performance, and resource deployment for 1997 (FCCC/CP/1996/7 and Add.1). The Secretariat summarized Add.1 on the financial performance of the FCCC, contributions and expenditures in 1996, and the forecast for 1996-97. There will be an annual payment of DM1.5 million per year from the German Government and lower staff costs arising from relocation to Bonn. Thirty-five Parties have paid contributions in full and expenditures are in line with COP-1 estimates. Additional requirements for 1996 amount to US$158,000, and US$867,400 for 1997. Germany will contribute an additional DM3.5 million annually to a special fund. Executive Secretary Michael Zammit-Cutajar noted that no additional core resources are being sought for 1997. He proposed a revision of the capital reserve level, up from 8.3% of the core budget to 15%. Responding to questions from the US and the EU, the Secretariat said budgeting beyond 1997 will be addressed at the next session of the SBI. No activity is given greater priority than in-depth reviews. JAPAN questioned the proposal to revise the level of working capital reserves. The Chair invited delegations to interact with their capitals to resolve the issue. The SBI then recommended approval of the programme of work for 1996-1997 (FCCC/SBI/1996/11).