00 Month 2014
Location, Country
Page 1
Thirty-Second Board Meeting
Privileges and Immunities of
the Global Fund
GF/B32/19
Montreux, Switzerland, 20-21 November 2014
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The Global Fund Thirty-Second Board Meeting
GF/B32/19
Board Decision
PRIVILEGES AND IMMUNITIES
Purpose:
1. This paper outlines how the absence of privileges and immunities exposes the Global
Fund to a variety of risks. It identifies the instruments to secure privileges and
immunities, and updates the Board on current progress.
2. The decision point presented at the end of the paper reflects the joint recommendation
of the Audit and Ethics Committee as well as the Finance and Operational Performance
Committee. The decision point requests the Board to reaffirm its support for obtaining
privileges and immunities by endorsing a series of measures to enhance current efforts
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EXECUTIVE SUMMARY
1 Due to the absence of privileges and immunities in both donor and implementer countries,
the Global Fund is exposed to a broad set of risks.
2 The Board has previously affirmed the importance of states according privileges and
immunities to the Global Fund, either through the application of relevant domestic
legislation or signing of the Board-endorsed Agreement on Privileges and Immunities.
3 To date, eight states have signed the Board-endorsed Agreement on Privileges and
Immunities, and the Secretariat is continuing its efforts to secure privileges and
immunities in a greater number of states.
4 Based on analysis provided by the Secretariat, and related discussions at meetings in
September, October and November 2014, the Audit and Ethics Committee (the “AEC”)
and the Finance and Operational Performance Committee (the “FOPC”) expressed
support for raising the discussion on privileges and immunities at the Board level to
develop concrete actions that will enhance the Secretariat’s work in this area.
5 Accordingly, this paper presents a decision point that the AEC and FOPC jointly
recommend to the Board for approval.
BACKGROUND
6 In 2009, the Board agreed to recommend that states consider granting the Global Fund
privileges and immunities through the following channels:
1
a. Applying legislation to confer upon the Global Fund the privileges and immunities
ordinarily provided to international organizations; or
b. Signing of the Board-endorsed Agreement on Privileges and Immunities (the “P&I
Agreement”).
7 The Board affirmed its support of the Secretariat’s efforts to obtain privileges and
immunities in 2010, noting that privileges and immunities are necessary for the Global
Fund to effectively exercise its functions and efficiently use its resources to deliver its
mission.
2
In affirming the need for privileges and immunities, the Board encouraged
states represented on the Board to support and facilitate the Secretariat’s efforts to secure
privileges and immunities.
8 The P&I Agreement, which is to be signed by states, accords the Global Fund juridical
personality, under which it has the capacity to contract, acquire and dispose of property
or assets, and institute legal proceedings. The privileges and immunities extend to the
Global Fund, its assets, archives and officials acting in their official capacity. Furthermore,
it provides tax exemptions for goods, supplies, materials, equipment, services or funds
introduced into, acquired, or used in a country as part of, or in conjunction with, funding
provided under a Global Fund grant.
9 Upon the tenth instrument of ratification, acceptance or approval, the P&I Agreement
comes into force. States express consent to be bound by an international agreement such
as the P&I Agreement in numerous ways depending on national legislation. Typically, the
executive branch executes the agreement followed by parliamentary ratification.
1
As adopted by the Board in December 2009 under Board decision point GF/B20/EDP04.
2
As adopted by the Board in December 2010 under Board decision point GF/B22/DP21.
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Timelines can vary depending on parliamentary schedules, so continued engagement with
relevant counterparts such as the Ministry of Foreign Affairs are crucial.
10 To date eight countries have signed the Board-endorsed P&I Agreement. These countries
are Ethiopia, Georgia, Ghana, Moldova, Montenegro, Rwanda, Swaziland and most
recently Uganda. The United States and Switzerland have separately, prior to the Board’s
endorsement of the P&I Agreement, accorded privileges and immunities to the Global
Fund.
3
11 In addition to the P&I Agreement, the new Framework Agreement, which the Global Fund
will sign with host countries for all new grants under the current funding model, serves as
an added tool to secure privileges and immunities from additional states. Under the
Framework Agreement, the host country is required to provide tax exemptions, or, if taxes
are levied and paid, reimbursements of such amounts. Failure to provide such exemptions
or reimbursements could result in withholdings of disbursements or deductions of grant
amounts. Tax exemptions are a priority matter for the Secretariat, but they represent one
aspect of privileges and immunities. As such, the Framework Agreements also stipulate
that host-country grantees must take all appropriate and necessary actions to ensure the
Global Fund is accorded privileges and immunities within three years of signing the
Framework Agreement.
DISCUSSION
12 The absence of privileges and immunities may hinder the Global Fund’s ability to:
a. Protect and maximize the impact of Global Fund resources;
b. Deliver life-saving commodities in a timely and efficient manner;
c. Conduct safe field activities; and
d. Ensure transparency and oversight over grants.
At Risk: Protecting and maximizing the impact of Global Fund resources
13 In the absence of privileges and immunities, assets, income and property of the Global
Fund and the programs it finances can be subject to taxation and other currency
restrictions. Consequently, grant funds are not fully optimized or directed towards
programmatic investments to fight the three diseases.
14 Within jurisdictions where the Global Fund lacks privileges and immunities, the Global
Fund can be sued, and Global Fund assets will not be immune from enforcement
measures following an adverse judgment. Consequently, in view of this risk, the Global
Fund is unable to open bank accounts in countries where it does not possess privileges
and immunities.
15 The inability to open bank accounts in a broader set of countries limits the means for
mitigating foreign-exchange risks as certain foreign-exchange transactions may require a
local bank account. Furthermore, certain private donors prefer or require contribution
modalities that would allow a donation payment to remain in their country. The options
3
Privileges and immunities have been accorded to the Global Fund by the United States in 2006, under the
International Organizations Immunities Act of the United States of America (22 United States Code 288 and
288f–6), and by Switzerland in 2004, through the Headquarters Agreement between the Global Fund and Swiss
Federal Council.
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for facilitating these types of contributions become limited when the Global Fund is
unable to open local bank accounts.
16 Being subject to legal process and enforcement also becomes a hindrance to the Global
Fund’s recovery efforts when litigation is used to prevent, delay or divert such efforts to
pursue recoveries.
At Risk: Timely and efficient delivery of life-saving commodities
17 Health products and other imported goods for programs financed by the Global Fund can
be subject to customs duties, procedures and delays. These delays impact critical activities
because of the time it can take for goods and products to clear customs. Such delays can
have added financial implications given the cost of maintaining shipments at ports of
entry while customs matters are being addressed. Furthermore, program implementation
is impacted when life-saving commodities do not reach patients according to schedule.
18 Also, imported health products and other goods may face customs duties, taxes and other
charges upon their entry into an implementer country. These added levies reduce the
amount of grant funds available for critical procurement needs.
At Risk: Safety of field activities
19 The presence of Global Fund staff in implementer countries is growing as engagement,
collaboration and partnership are fundamental principles and enablers under the current
access-to-funding, grant-management and assurance models. With the demands of staff
presence in country rising, at times in environments where the populations served and
activities supported may be criminalized, the lack of privileges and immunities
jeopardizes staff security and may inhibit field activities.
20 Even as staff travel in their official capacities, they lack immunity from legal proceedings
and detention, including other threats to their safety and effectiveness. For example, staff
traveling on personal passports without privileges and immunities may be blocked or
delayed from entering or exiting a country. They also face the risk of prosecution,
detention and other physical threats and intimidation.
21 The threat of detention and prosecution can further reduce the ability of the Global Fund
to send its staff to places where they will be seen as proponents of activities, interventions
and key affected populations that might be criminalized by governments.
22 As in-country presence is also a key element of obtaining assurance over grant activities
and expenditures, the lack of privileges and immunities to protect staff also threatens to
limit or inhibit the mechanisms that can be utilized to increase assurance over programs.
At Risk: Transparency and oversight of grants
23 Without privileges and immunities, the Global Fund’s archives, data and working
documents are not immune from potential search and seizure by government entities. As
such, confidential information and records—including evidence collected in an
investigation or audit—could be accessed, compelled for disclosure, or confiscated.
24 Additionally, the threat of litigation can also impede or compromise the Global Fund’s
ability to obtain information and oversight of grant programs. This threat raises security
concerns that may inhibit the Global Fund from continuing activities in country, such as
verifications, site visits and other programmatic engagement or reviews.
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RECOMMENDATION
25 Efforts to secure privileges and immunities in a greater number of countries has been
entry points to countries, failure to leverage diplomatic and political channels, and a lack
of dedicated resources to manage communications and follow-up efforts. To bring greater
attention to this issue, the Secretariat explained the risks associated with the lack of
privileges and immunities to the AEC and FOPC to seek support for raising discussions at
the Board level.
26 Upon review and discussion, the AEC and FOPC acknowledged that without privileges
and immunities, the Global Fund’s resources, staff and mission are exposed to serious
risks and challenges. Given many of the hindrances to greater progress in securing
privileges and immunities could be addressed through concrete action or statements by
the Board, the AEC and FOPC decided to recommend that the Board:
a. Re-affirm the importance of states according privileges and immunities to the
Global Fund through domestic legislation or signing of the Board-endorsed
P&I Agreement;
b. Acknowledge the Secretariat’s efforts to hold host-country grantees
accountable for taking all appropriate and necessary actions to provide the
Global Fund with privileges and immunities within a three-year period;
c. Request the Secretariat to dedicate appropriate resources towards obtaining
privileges and immunities;
d. Establish regular reporting to the Board on the status of efforts to secure
privileges and immunities, under the oversight of the AEC and FOPC; and
e. Leverage stakeholder relationships to identify additional strategies or
advocacy plans to obtain privileges and immunities, under the guidance of the
Chair and Vice Chair of the Board.
DECISION
Decision
27 Based on the discussion above, the AEC and FOPC jointly recommend the following
decision point to the Board for approval.
Decision Point: GF/B32/DP06: Privileges and Immunities
1. The Board acknowledges:
a. The absence of privileges and immunities exposes the Global Fund’s
resources, staff and mission to serious risks and challenges;
b. The importance of states, particularly implementing country
governments, to accord privileges and immunities to the Global
Fund through either applying domestic legislation or executing the
Board-endorsed multilateral Agreement on Privileges and
Immunities; and
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c. The Secretariat’s efforts to require host-country grantees to take all
appropriate and necessary actions to ensure the Global Fund is
accorded privileges and immunities within three years from the
effective date of a Framework Agreement signed between the Global
Fund and host-country grantees.
2. To further ensure progress in protecting the Global Fund through
privileges and immunities, the Board requests:
a. The Secretariat to dedicate required resources for the acquisition of
privileges and immunities for the Global Fund;
b. The Finance and Operational Performance Committee and the Audit
and Ethics Committee to oversee jointly the acquisition of privileges
and immunities for the Global Fund, and report to the Board on an
annual basis on implementing and donor countries that have and
have not provided such protection to the Global Fund; and
c. The Board Leadership to constitute a dedicated group of donor and
implementer representatives to identify strategies and advocate for
the acquisition of privileges and immunities for the Global Fund.
