Re: [soac-newgtldapsup-wg] continuity of operations funding requirement

[Richard Tindal <richardtindal@xxxxxx>]

it has to be either an:

(i) irrevocable standby letter of credit (from a reputable, internationally 
recognized financial institution)

or 

(ii) an irrevocable cash escrow account

RT


On Aug 12, 2010, at 10:30 AM, Avri Doria wrote:

> 
> Hi,
> 
> Does this need to be a financial bond.  Could the financial instrument be a 
> co-signature by a well established guarantor?
> 
> a.
> 
> On 12 Aug 2010, at 12:49, Eric Brunner-Williams wrote:
> 
>> 
>> Hi Richard,
>> On 8/12/10 11:10 AM, Richard Tindal wrote:
>> 
>>> My understanding of the Financial Continuity Instrument is an amount
>>> of cash, or an irrevocable cash instrument, which the registry places
>>> under the control of ICANN.
>> 
>> The term is defined in the evaluation criteria, p94 of 312 in the 
>> draft-rfp-clean-28may10-en.pdf, para 2, which reads:
>> 
>> "In the Continuity question in the financial section (see Question #50), up 
>> to 3 points are awarded if an applicant provides, at the application stage, 
>> a financial instrument that will guarantee ongoing registry operations in 
>> the event of a business failure. This extra point can serve to guarantee 
>> passing the financial criteria for applicants who score the minimum passing 
>> score for each of the individual criteria. The purpose of this weighting is 
>> to reward applicants who make early arrangements for the protection of 
>> registrants and to accept relatively riskier business plans where 
>> registrants are protected."
>> 
>> What is being provided, and where, is not defined.
>> 
>> Assume an application by a cooperative located in Korea for an IDN string 
>> related to agriculture and rural food marketing which creates
>> a financial instrument denominated in KRW at the (Korean) National 
>> Agricultural Cooperative Federation, NH Bank [1].
>> 
>> The proposed facilities-based registry operation is in Korea, and the 
>> proposed operating costs, the costs that are the actual expense to be 
>> continued by some instrument, are proposed to all be paid in KRW to Korean 
>> accounts, individual (staff) and corporate (vendor).
>> 
>> I think it is difficult to conclude that the financial instrument only meets 
>> the continuity purpose if it is in dollars in a bank in Los Angeles.
>> 
>> At p186 of 312 there is a prior to or concurrent with the execution of the 
>> registry agreement reference, and the definition refers back to the quoted 
>> text above, from p94.
>> 
>> At p200 there is "... Registry Operator ... has duly executed and delivered 
>> to ICANN an instrument that secures the funds required to perform registry 
>> functions for the TLD in the event of the termination or expiration ..." 
>> Here the language addresses the instrument, what the currency 
>> instrumentalized is, and what institution the instrument is drawn upon, is 
>> undefined.
>> 
>> That's all we know from draft-rfp-clean-28may10-en.pdf.
>> 
>> Eric
>> 
>> [1] http://www.nonghyup.com/Main/main.aspx
> 
>