Draft Proposals for the UPU Istanbul Congress – Reform of the Union

1. United States Department of State ADVISORY COMMITTEE ON INTERNATIONAL POSTAL AND DELIVERY SERVICES 29 September 2014, American Institute of Architects Building, 1735 New York Avenue, NW, Washington, D.C. Draft Proposals for the UPU Istanbul Congress – Reform of the Union James I. Campbell Jr. Final / 29 Sep 2014

2. Topics • Legal Framework of the UPU • Draft Proposals re reform of the Union

3. Legal Framework of the UPU

4. "Acts" of the UPU

5. Regulations adopted by the POC are binding on governments Constitution Article 22. Acts of the Union 3 The Universal Postal Convention, the Letter Post Regulations and the Parcel Post Regulations shall embody the rules applicable throughout the international postal service and the provisions concerning the letter-post and postal parcels services. These Acts shall be binding on all member countries.Member countries shall ensure that their designated operators fulfil the obligations arising from the Convention and its Regulations.... 5. The Regulations, which shall contain the rules of application necessary for the implementation of the Convention and of the Agreements, shall be drawn up by the Postal Operations Council, bearing in mind the decisions taken by Congress. Gen. Regs. Article 141. Procedure for submitting proposals to the Postal Operations Council concerning the preparation of new Regulations in the light of decisions taken by Congress 1.The Regulations of the Universal Postal Convention and the Postal Payment Services Agreement shall be drawn up by the Postal Operations Council in the light of the decisions taken by Congress.

6. Option to opt out of POC Regulations is severely limited Const. Article 22. Acts of the Union 1 The Constitution shall be the basic Act of the Union. It shall contain the organic rules of the Union and shall not be subject to reservations. 2 The General Regulations shall embody those provisions which ensure the application of the Constitution and the working of the Union. They shall be binding on all member countries and shall not be subject to reservations. Conv. Article 29. Terminal dues. Provisions applicable to exchanges between countries in the target system. 8 No reservations may be made to this article, except within the framework of a bilateral agreement. [Article 30(4), transitional system, is identical]. Conv. Article 39. Reservations at Congress 4 To become effective, proposals concerning reservations must be approved by whatever majority is required for amendment of the article to which the reservation relates. POC Rules of Procedures. Article 14. Reservations to the Regulations revised by the POC 8 The reservations shall be approved by a majority of the members having the right to vote.

7. POC directs the commercial functions of the UPU Gen. Regs. Article 113. Functions of the POC 1. The Postal Operations Council shall have the following functions: 1.1 Coordinates practical measures for the development and improvement of international postal services. 1.2 Takes, subject to Council of Administration approval within the framework of the latter's competence, any action considered necessary to safeguard and enhance the quality of and to modernize the international postal service.... 1.9 Conducts the study of the most important operational, commercial, technical, economic and technical cooperation problems which are of interest to all member countries or their designated operators, including questions with major financial repercussions (charges, terminal dues, transit charges, airmail conveyance rates, parcel-post rates, and the posting abroad of letter-post items), and prepares information, opinions and recommendations for action on them....

8. The POC is a council of designated operators Gen. Regs. Article 112. Composition and functioning of the POC 1.The Postal Operations Council shall consist of forty members who shall exercise their functions during the period between successive Congresses. 2 The members of the Postal Operations Council shall be elected by Congress on the basis of qualified geographical distribution. Twenty-four seats shall be reserved for developing member countries and sixteen seats for developed member countries. At least one third of the members shall be renewed at each Congress. 3 Each member of the Postal Operations Council shall appoint its representative, who shall have responsibilities for delivering services mentioned in the Acts of the Union. The members of the Postal Operations Council shall take an active part in its work.

9. The POC is dominated by 19 DOs with "permanent" seats • Belgium • Brazil • Canada • China • Cuba • Egypt • France • Germany • Great Britain • India 11. Italy 12. Japan 13. Netherlands 14. New Zealand 15. Nordic* 16. Russia 17. Spain 18. Switzerland 19. United States * Nordic seat alternates between Denmark, Finland, Norway, and Sweden. Red font = industrialized country.

10. Relationship between acts of the UPU and national law Const. Article 24. National legislation The provisions of the Acts of the Union shall not derogate from the legislation of any member country in respect of anything which is not expressly provided for by those Acts.

11. Fundamental issues presented by the UPU legal framework • Governments have delegated authority over their countries to a Council characterized by unacceptable conflicts of interest. • Combining governmental and commercial functions in a single group creates a conflict of interest. • Exercise of governmental authority by a committee of designated operators creates a conflict of interest. • Exercise of governmental power by commercial entities raises questions under US (due process) and EU (state aid) laws. • Governments have delegated authority over their countries without appropriate controls or limits. • POC Regulations are adopted and revised after Congress adjourns, so Congress cannot know the content of the Regulations binding on them. • The Convention does not provide a specific delegation of authority to the POC so POC Regulations can (and do) extend beyond the provision of the Convention approved by Congress.

12. The UPU has failed to adopt appropriate structural reform 1992UPU Group of Postal Experts, "Report on the Management of the Work of the UPU." 1992 CEPT separates govt/organizational function in Europe. 1996 French ministry, Report on management of Union's work. CA GT 1.1 Doc 4 "[A]n increasing number of States have considered they could no longer be 'judge and party' and have chosen to separate public authority responsibilities from operational functions both organically and functionally.... Just as governments have had to adapt, the UPU, as an intergovernmental body, must also take this new situation on board. The UPU was set up at a time when States were the only actors in the postal sector. Since then it has acquired a very strong 'operational' responsibility. " 1999 Beijing Congress. U.S./German Proposals 33 and 66 to convene Extraordinary Congress to implement reforms including appropriate separation of functions. 2001 CA High Level Group o the Future Development of the UPU, SubGroup 2. "Five Options Paper". CA HLGSG 2 2001.1–Doc 2. 2010 PWC, "Study on the impact of new market players in the postal sector on the Union and its mission and activities".

13. Draft Proposals re reform of the Union To Part II