UNCLASSIFIED U S Department of State Case No F-2011--07114 Doc No C17660670 Date 06 27 2014 3 From To pas Himamaul BIQ az Susan N Subject Date FW Antw call Attachments 20101015 estahljshjng VZ Clf AN doc Friday November 05 2010 3 25 00 PM RELEASED IN PART B5 B6j Let's disucss this ----Original Message----From Pizer William Billy Sent Friday November 05 2010 3 24 PM To Das Himamauli Subject fw Antw call 1 n i a --- B6 Sent Fri Nov 05 14 50 05 2010 Subject Antw call Billy please find attached some thoughts from the EU lawyers on the legal implicatiosn for astablishin the new fund · B6 William Pizer@do treas gov 05 11 2010 15 41 a I just tried you but no answer Give holler when vau have a minute 202 622 0173 This afternoon 111 be on my cell On the UN thina We l st had a kNlg talk - B6 ----------' state fciks B5 M In m mind there are re key 1 Board Is independent we can select our board members and the COP only has the normal responsibilities for guidance etc 2 Secretariat is professional and capable operating procedures are sensible have safeguards etc• 3 Trustee is World Bank we do not see another candidate capable of enforcing our legal needs Separately there seems to be an issue about the actual documents establishing the fund being sqmething other than a COP decision E g the GEF instrument is actually a document of the trust fund itself Not a lawyer so not sure I fully get this point but has to do with having the fund be legally · separate from the COP B5' REVIEW AUTHORITY Adolph Eisner Senior Reviewer UNCLASSIFIED U S Department of State C se No F-2011-07114 Doc No C17660670 Date 06 27 2014 UNCLASSIFIED U S Department of State Case No F-2011-07114 Doc No C17660671 Date 06 27 2014 RELEASED IN FULL -1 of2- 21 July 2011@ 16 26 Subject legal implications of establishing the new fund Date 8 Oct2010 1 Questioi s presented 1 Most parties now support the establishment of a Fund but also acknoVw' ledge that the details of the fund are unlikely to be agreed in time for Cancun Three legal questions arise a · Can the COP establish the Fu·nd in Cancun without having first agreed on the details of its design leaving the negotiations on the details for later b What are the legal implications of establishing a Fund without having first agreed the all or at least some details ofttie Fund 2 This note is based on the understanding that establishing a fund means bringing it into existence In this context where the details of the Fund would not have been agreed the Fund would exist but not yet be operational · 2 Can the COP establish the Fund in Cancun 3 Yes The COP has already exercised its authority under Article 7 2 i to establish two funds the SCCF and LDCF Decision 5 CP 7 para 12 and 7 CP 7 para 2 4 In each circumstance the fund was established as a more or less empty shell Details on its design were agreed by decisions of subsequent COPs including decisions that effectively outsource the day-to-day governing board trustee secretariat and project cycle management functions 5 ' The use of _the phrase shall be established rather than is established in these previous COP decisions was intended to recognize that th funds had not yet been designed but introduced legal ambiguities as 'to when the funds were considered to be established These legal ambiguities were resolved by subsequent COP decisions indicating that the funds came into existence through the origi al ecisions 3 What are the legal implications of the COP establishing the Fund in Cancun 6 A number of delegations have begun to draw the distinction between a political decision to establish a Fund in Cancun and the legal act of establishment The distinction might be useful to resolve any uncertainty as to whether the Fund has been established while leaving the legal means by which it will be established within or outside the UNFCCC for a later date This note focuses on the legal act of establishment of the Fund 7 If the COP establishes the fund by a COP decision it will be a subsidiary body of the COP and therefore u nder the Convention and· under the COP's ultimate auth9rity However the COP could devolve much of its authority to the Fund's governing body and outsource important functions to other existing institutions As -a legal safeguard against REVIEW AUTHORITY Adolph Eisner Senior Reviewer UNCLASSIFIED U S Department of State _Case No F-2011-07114 Doc No C17660671 Date 06 27 2014 UNCLASSIFIED U S Department of State Case No ·F-2011-07114 Doc No C17660671 Date 06 27 2014 -2 of2 - 20 June 2010@ 23 13 political interference with the day-to-day operation of the Fund a COP decision should specify that the COP's authority would be limited o providing guidance and the Fund's being accountable to the COP Once such a COP decision setting out the limits of COP intervention has been adopted this could afterwards only be changed by consensus see previous note on meaning of authority guidance accountable 8 A Fund established by COP decision whether in Cancun or subsequently ratherthal' by treaty instrument or under the auspices of international institution such as the World Bank will have some specific inherent legal limitations It will not have international or domestic legal personality unless Parties take further steps It will therefore have to rely on the COP and its own limited personality or outside institutions such as trustees and Implementing Agencies to carry out certain functions However this limitation also applies to some extent to funds and institutions established outside the convention such as the GEF and the CIFs which rely on the World Bank as trustee for legal personality 9 A Fund established by the COP would be directly accountable to the COP By contrast for any fund established outside the Convention the COP's ability to guide and hold that fund accountable would be limited to relatively weak arrangements such as a MOU - 2 - UNCLASSIFIED U S Department of State ase No F-2011-07114 Doc No C17660671 Date 06 27 2014