[NCUC-DISCUSS] Acceptance of nomination for NCUC EC

Tue Nov 10 12:37:08 CET 2015

Hi everyone,

 A few thoughts on issues that have arisen concerning: 1) the legal structure of the NCUC, 2) the NCUC banking situation, 3) the desirability of a single individual holding two positions on the Executive Committee simultaneously.

 At the outset I would like to echo Benjamin, Kathy and others in thanking Milton for the years of service he has provided to this organisation and this community as Treasurer maintaining our bank records. It's a rather mundane, thankless job consisting of balancing a banking account, sending wires and making reports and recommendations  to the E.C. That our account balance has grown and has allowed us in recent years to send representatives, otherwise unfunded, to F2F meetings is a tribute to Milton's stewardship of the funds and the fundraising prowess of Bill and, most exceptionally, Robin. 

 As to the various issues that have been raised:

 1. I'm happy to see a consensus developing that suggests the NCUC needs to develop a more formal organisational structure. This is something that myself and Carlos Affonso Pereira de Souza tried to push as long ago as the Beijing meeting to widespread apathy. I'm quite sure it was also considered before myself and others became involved in this community and was  likewise ignored. It's a sign of our growth and maturity as an organisation that we're now at a point where serious consideration is being given to the matter.

 The principle reason we need to create a legal vehicle within which to operate is that we need to protect our officers, members and our growing bank account from exposure to lawsuits and other forms of liability. Were someone to feel they were wronged by the NCUC in a way that caused economic harm they could very easily create a lawsuit against each and every one of us. At the moment we do not have a liability shield that is universally recognised. In defence, we would argue that we are de facto a California unincorporated associated and liability protection does exist but neither the jurisdiction, organisational form  nor the protection thereof is certain. We need to make it so.

 An additional reason we need to move in this direction is that if American authorities wanted to construe us as an unincorporated association (unlikely absent an affirmative declaration on our part, but possible) we are already in breach of American law as UA's with yearly revenues in excess of $5,000 have certain reporting requirements that to the best of my knowledge we are not fulfilling. In other words, should we tick off the American government they could very easily come after us and our members. Very unlikely, but best practice would suggest we avoid even this remote possibility.

 Other issues, such as the recent need to obtain a TIN (taxpayer identification number) to maintain certain donations and the desire to obtain 501 charitable status (which CAN, however,  be obtained without formal incorporation), be it 501(c)3 or other §501 possibilities,  are also in play here.

 2. Once a decision to create a legal vehicle for the NCUC has been reached the next question is what and where; i.e. what type of legal vehicle and under what jurisdiction. There are a number of issues that need to be considered.

 Before going forward with this project we should consult with ICANN legal. The GNSO is a creation  of ICANN's Bylaws. Our function within the GNSO is subject to these same Bylaws. I suspect that ICANN may not be enthusiastic about it's constituent components developing ad hoc their own legal personality. I'm not sure. That there is some question here does lead me to think that an approach we might want to take is to establish an NCUC support organisation that is explicitly legally independent from ICANN and in no way subject to it's bylaws  but whose purpose is to support the NCUC within ICANN: a NCUC Foundation, if you will.  This would be more complicated to create but may be the only way to maintain our independence from ICANN should future or current events dictate we need to do so.

 Jurisdiction is something we need to carefully consider. With the IRP becoming a major procedural instrument within ICANN I can see advantages in formally incorporating ex-USA. Forum shopping to apply/avoid application of an IRP decision would be easier were we to be legally based elsewhere. I should note that this applies only to IRP's we bring ourselves, as a constituent part of ICANN or as an independent entity, and not one's brought within the sole designator process. 

 Paperwork requirements are another consideration. Incorporation in the United States would bring with it reporting requirements both on the organisational and transactional level. Tax returns, form 990, and records of disbursements to non US individuals, along with collection of tax status documents from those receiving payments from the NCUC.  are all things that come with formal legal status in the USA. There are also state level reporting requirements in the USA that do not exist in countries with unitary legal and revenue collection systems.

 There is a new legal form here in the United Kingdom known aa the Charitable Incorporated Organisation (CIO) that might be a more appropriate legal form  for the NCUC than, for example, a California Public Benefit Corporation. A CIO gives the organisation the main benefits of a normal nonprofit (legal personality, liability protection) but without any reporting requirements other than that of submitting its yearly accounts and report of trustees (basically a list of officers) to the Charity Commission. This can all be done online and there is no cost involved. All other reporting requirements (in the UK this would normally involve reports to Companies House and the Charity Commission) are disposed of. There may be other legal forms and possibilities elsewhere that would be equally or more attractive. Should the CIO prove desirable  I'd be happy to work with the EC and others to complete and file the paperwork.

 3. As one of the first e-residents of the Republic of Estonia I'm excited to see the enthusiasm for the e-residency program. When I became an e-resident two trips to Estonia were required. Now applications can be made online and cards collected at about 50 embassies worldwide. I do have an Estonian bank account and if we are to decide to go this route a simple visit to an Estonian bank by one of our members authorised by the EC should be enough to open an account. However...

 E-residency is not a substitute for legal personhood. That which does not exist can not be resident anywhere. Once the NCUC has a legal personality an Estonian e-residency does offer a number of advantages (digital signatures, easy transfer of executive responsibility, uncomplex set up of formal legal structures) that may be appealing to the NCUC. That would be step two, though, following the establishment of legal personhood elsewhere.

 4. Eventually I believe it would be advantageous for the NCUC to have either multiple bank accounts or a dollar denominated offshore account. In doing so, we'd just be continuing to follow the lead of our multinational Treasurer,  Milton Mueller. Milton has the ability to wire from and receive money into bank accounts both in Europe and in North America. It's proven to be of great value to folks like me who when getting reimbursed by the NCUC have been able to avoid bank charges associated with wire transfers from the United States. Europe, of course, is the home of more NCUC members than any other region.

 A more holistic solution would be to obtain an offshore account at an international bank. Our current bank balance is high enough to allow us to open such an account. The benefit of these accounts is that the bank will have both ABA and SWIFT numbers, amongst others, allowing us to receive and distribute funds as domestic rather than international transactions ( in terms of banking infrastructure, not reporting requirements). These accounts can be opened without travel to the offshore jurisdiction involved and can be done quite easily once legal personhood has been established.

 5. As for the transitionary period during which we reconstruct the NCUC:

 a. It would not be good form to have an EC member also be our Treasurer. The accountability, or lack thereof, of constituent components of the ICANN community is a major issue in our current accountability debates. Were two photos of Milton to appear on this page ( http://www.ncuc.org/governance/executive-committee/ ) it would feed a perception of a lack of accountability that we don't wish to feed. I find this to be a problem of perception, not reality, but in politics, and we are involved in a political environment, perception is often as or more important than reality.

 I would encourage the incoming EC to appoint as Treasurer someone not of the EC but one who understands our situation and will work with Milton on all financial affairs. I see no reason the status quo needs to change in terms of actual work product, unless Milton wanted to delegate some tasks to alleviate the burden on himself.  Another alternative would be for the EC to NOT fill the Treasurer position at all and designate Milton to be the EC member in charge of all financial affairs. I trust the incoming EC to evaluate the situation and to do the right and prudent thing for the NCUC.

 Best,

 Ed

----------------------------------------
 From: "Benjamin Akinmoyeje" <benakin at gmail.com>
Sent: Tuesday, November 10, 2015 9:09 AM
To: "James Gannon" <james at cyberinvasion.net>
Cc: "NCUC-discuss" <ncuc-discuss at lists.ncuc.org>
Subject: Re: [NCUC-DISCUSS] Acceptance of nomination for NCUC EC   
 First off, I appreciate the work the Prof has done for 16 years, so I publicly announced that I am one of those knocking at his door to join the race, though I am not from the NA region nor physically present at his door to knock it.  
 He has built trust from the historical knowledge and delivered his functions all this while.
 But as it was said NCUC is not legally an organization yet, we need to fix that and he is well positioned to help fix that now.

 My suggestion to all is for us to look at the critical issues that will allow the change to happen.
 We need to get NCUC become a legal entity that the banking system can recognize and hence we can set up what ever system, Treasurer - secretary or  Treasurer.

 Thanks Bill for calling our attention to the bylaws, I would have gone ahead with the process without blinking an eyelid, but now I am more enlightened about the bylaws, 16 years history of NCUC , trust for the prof. and why I should vote in NCUC elections.

 Thank you,
 Benjamin

   On Tue, Nov 10, 2015 at 9:21 AM, James Gannon <james at cyberinvasion.net> wrote:      That's the whole problem though, NCUC does not exist as an organisation therefore we don't have an organisational bank account so its impossible to do so.

 -James

 From: Ncuc-discuss <ncuc-discuss-bounces at lists.ncuc.org> on behalf of Seun Ojedeji <seun.ojedeji at gmail.com>
Date: Tuesday 10 November 2015 at 12:49 a.m.
To: Tapani Tarvainen <ncuc at tapani.tarvainen.info>
Cc: NCUC-discuss <ncuc-discuss at lists.ncuc.org>
Subject: Re: [NCUC-DISCUSS] Acceptance of nomination for NCUC EC

Sent from my Asus Zenfone2
Kindly excuse brevity and typos.
On 10 Nov 2015 00:28, "Tapani Tarvainen" <ncuc at tapani.tarvainen.info> wrote:
>
> On Nov 10 07:51, Andrew A. Adams (aaa at meiji.ac.jp) wrote:
>
>
>
> But we really should have at least two people who can access the
> account.   

SO:   

I don't think this should require much convincing to be agreed upon. Having 2 account signatories is just a normal organisation standard.  

Regards  

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