On the financial rules of the secretariat of the cooperation council of turkic speaking states

23.08.2012

Agreement

The Governments of the Republic of Azerbaijan, Republic of Kazakhstan, Kyrgyz Republic and Republic of Turkey, hereinafter referred to as the “Parties",

Being guided by the generally recognised principles and norms of international law,

Aiming at the implementation of the provisions of Article 11 of the Nakhchivan Agreement on the Establishment of the Cooperation Council of Turkic Speaking States of October 3, 2009,

With due respect to the Host Country Agreement between the Government of the Republic of Turkey and the Secretariat of the Cooperation Council of Turkic Speaking States Regarding the Secretariat of the Cooperation Council of Turkic Speaking States signed on 27 December 2011

have agreed as follows:

Article 1 Definitions

“Turkic Council” means the Cooperation Council of Turkic Speaking States;

“Secretariat” means the Secretarial of the Turkic Council;

“Budget” means the formation and disposal of funds intended for realization of the tasks and functions of the Secretariat;

“Financial Year” means period of time starting 1 January and finishing 31 December of the calendar year;

“Contributions” mean the amounts set for the Parties to cover the costs associated with the activity of the Secretariat in the current financial year;

“CFM” means the Council of Foreign Ministers of the Turkic Council;

“CoE” means the Council of Elders of the Turkic Council;

“SOC” means the Senior Officials Committee of the Turkic Council;

“Host Country” means the Member State of the Turkic Council on whose territory the headquarters of the Secretariat is located;

“External Audit” means examination of financial and economic activity of the Secretariat, which is carried out by an independent auditor/auditors as appointed by the CFM;

“Incomes” mean the funds received by the Secretariat in the form of set contributions to the budget:

“Other Incomes” mean all receipts except for the set contributions, donations in cash, as well as the amounts received as a result of direct reimbursement of costs in the current financial year;

“Expenditures” mean the funds disposed by the Secretariat from the budget to finance its tasks and functions;

“Working Capital Reserve” is part of the Budget to be used for the spending of the Secretariat pending the full payment of compulsory contributions.

Article 2 General Provisions

This Agreement shall define the sources of financing, order of forming and implementation of budget of the Secretariat, which shall include expenditures related to the CoE, and regulate the basic financial aspects of their activities.

Article 3 Budget

1. Budget of the Secretariat including the expenditures of the Cot shall cover all incomes and expenditures of a financial year in monetary and/or other forms.

2. The budget of the Secretariat shall be approved by the CFM after endorsement by the SOC.

3. The income shall comprise:

a) Compulsory contributions by Member States as the main income.

i) The scale of contributions is fixed as follows:

Republic of Azerbaijan — 2/15

Republic of Kazakhstan — 4/15

Kyrgyz Republic — 1/15

Republic of Turkey — 8/15

ii) However, the CFM through SOC is authorized to modify this scale, should need arise due to changes in the economic capacity of members and/or expansion of the organization. These modifications should be effective for the budget of the next year and contributions shall be made accordingly;

iii) If there is no consensus on the scale of new contributions, the scale shown in this article shall continue to be valid;

iv) Until the ratification of this Agreement, voluntary contributions will be realized according to the present scale:

b) Payments to budget of the Secretariat from voluntary* contributions by the Parties, the amount of which shall be unlimited;

c) Voluntary contributions in monetary and/or other forms, could also be accepted from Turkic Council Observer-States, other States, Turkic Council Observer-Organizations, other international organizations and fora, legal and physical persons, subject to the approval of the Parties;

d) Other incomes provided that they arc not in conflict with the objectives and tasks of the Secretariat.

4. The expenditures shall comprise:

a) Remuneration of the Secretary General, including:

4.a.l. medical insurance. 4.a.2. dependency allowance, 4.a.3. childrenʼs allowance, 4.a.4. educational grant. 4.a.5. accommodation allowance. 4.a.6. rotation expenses. 4.a.7. home leave. 4.a.8 representation allowance. 4.a.9. social security payments.

b) Remuneration of the Deputy Secretary Generals, including:

4.b.I. medical insurance. 4.H.2. dependency allowance. 4.H.3. childrenʼs allowance, 4.b.4. educational grant, 4.b.5. rotation expenses. 4.b.6. home leave (once a year) 4.b.7. representation allowance, 4.b.8. social security payments.

c) Remuneration of the personnel of the Secretariat, including:

4.c.l. medical insurance. 4.c.2. dependency allowance, 4.c.3. children's allowance, 4.C.4. educational grant. 4.C.5. rotation expenses, 4.C.6. home leave (once a year). 4.c.7. social security payments, 4.C.8. language allowance (for personnel category G according to the Regulations for the Staff of the Secretariat of the Cooperation Council of Turkic Speaking States).

d) Lind of service indemnity of staff members completing their term of service;

e) Severance pay in case of termination of service contracts of personnel;

f) Expenses of business trips of the Secretary General. Deputy Secretary Generals, personnel of the Secretariat and the members of CoE. including per diem, transport fare and hotel accommodations;

g) Purchase of goods and services for the Secretariat;

h) Purchase of office furniture and equipment, motor vehicles and other means necessary for the functioning of the Secretariat;

i) Other expenditures, including following expenditures for day-to-day functioning of the Secretariat:

Maintenance and repairs of premises, office furniture, equipment, automobiles and other means;

Staff training;

Candidate expenditures;

Project expenses;

Protocol expenses;

Consulting.

5. The Staff Matrix of the Secretariat showing expenditures according to rank and salaries of the personnel for a financial year shall be prepared by the Secretariat and approved by the CFM after the endorsement of the SOC.

Article 4 Budget Administration

1. The budget shall be administered by the Secretariat.

2. Exact amount of compulsory contribution of each Party will be shown in the budget.

3. Annual contributions to the budget shall be calculated and paid in USD.

4. The Secretariat shall inform the CFM during its sessions on whether the assessed contributions are transferred to the budget in full.

5. The due contributions shall be paid preferably within the course of first three months of the financial year. However in ease where this is not possible due to national legislation, payments may be made at four intervals to be effectuated on the first day of each three months.

Article 5 Estimate of Expenditures

1. The Secretariat's budget shall be implemented in accordance with the Estimate of Expenditures — the document that covers expenditures for a financial year.

2. The Secretariat shall form its draft budget and send it with the calculations and justification on each item for consideration by the Parties in the first half of the year preceding the new financial year.

3. For expenditures in local currency, rates of exchange for the budget estimate will be based on the average rates of exchange of the preceding year by the Central Bank of the Host Country.

4. Within the framework of the approved budget any transfer from one item to another could be made by the Secretariat by informing the Parties in advance excluding the item on salaries.

5. Balance of budgetary funds of the Secretariat, which is not utilized for its intended purpose by the end of a financial year, shall be incorporated into the income of the budget of the next financial year. The contributions of each member state shall be calculated accordingly and will be communicated to the Parties for the amount of their net contributions.

6. The residual budget as of 1st January due to incomplete use for purchasing equipment and durable goods in the previous year shall be used for payments of pending orders.

Article 6 Custody of Funds

1. The Secretary General shall designate the banking account/accounts where the Secretariat funds shall be kept.

2. The accounts of the Secretariat shall be maintained in USD and in the national currency of the Host Country Accounting rates of exchange for the expenditures of the preceding period will be based on three monthly average exchange rates of the Central Bank of the Host Country.

Article 7 Accountability

1. The Secretary General shall exercise control over and be accountable to the CFM through SOC for the management of financial resources of the Secretariat.

2. The Secretary General shall present the annual accounts/report for each financial year to the CFM through SOC not later than March 31st of the year following previous financial year.

3. At the end of each financial year the cash surplus or deficit may be determined by calculating excess of income over expenditure, or excess of expenditure over income. In case of a cash deficit of the budget of the Secretariat, the Secretary General shall inform the CFM through SOC and make proposals regarding the necessary financial measures to be taken.

Article 8 Audit

1. External Audit for the financial activities of the Secretariat shall be carried out not less than once in every year by an independent auditor/auditors authorized by the CFM through endorsement by SOC. The Secretary General shall present documents, necessary for conducting external audit, to the body so authorized.

2. After the external audit is carried out. the audit report shall be circulated by the Secretary General to all the Parties.

Article 9 Working Capital Reserve

1. The Working Capital Reserve is part of the Budget and shall be used exclusively to finance the budgetary appropriations pending the receipt of the annual mandatory contributions.

2. The amount of the Working Capital Reserve shall be fixed to an amount not below 3/12 of the annual Budget. Upon receipt of the pending annual compulsory contributions the advanced amount will be returned to the Working Capital Reserve.

Article 10 Final Provisions

1. This Agreement shall enter into force on the thirtieth day alter the receipt through diplomatic channels of the last written notification by the depositary on the completion by Parties of internal procedures required for its entry into force.

After its entry into force this Agreement is open for accession by new Member States of the Turkic Council.

It shall enter into force for the acceding state on the thirtieth day after the receipt by the depositary of its instrument of accession.

2. Republic of Turkey shall be the Depositary of this Agreement. The Depositary shall notify in written through diplomatic channels the Parties about the date of entry into force of the Agreement, as well as about receiving instruments of ratification, acceptance, approval or accession from the relevant Parties.

3. In case of disagreements concerning the interpretation or application of this Agreement, the Parties shall settle them through consultations and negotiations.

4. By mutual consent of the Parties amendments and additions may be made to this Agreement in the form of separate protocols entering into force in accordance with the procedure set forth in paragraph 1 of this Article. These amendments and additions shall be an integral parts of this Agreement

5. Any Party may at any lime withdraw from this Agreement by forwarding a written notification to the Depositary. The Agreement shall terminate with regard to that Party after the expiry of 6 months from the date of receipt by the Depositary of such a notification.

Done in the city of Bishkek, on the 23rd day of August 2012 in a single original copy in the Azerbaijani. Kazakh. Kyrgyz. Turkish and English languages, all texts being authentic. In case of controversy English version shall prevail.

The original copy of this Agreement shall be kept by the Depositary, which shall send to each signatory Party a certified copy.