October 2017 - Ws2-jurisdiction

FOR YOUR FINAL REVIEW: FINAL Draft of OFAC Recommendation
by Greg Shatan Oct. 5, 2017

Oct. 5, 2017

All, Here is the FINAL Draft of the OFAC Recommendations, reflecting our call today. There are a few changes based on a question asked in the call about what "residents" was intended to mean. In the course of cleaning that up, I noticed that the language cited to the RAA in fact came from the Terms and Conditions for a Registrar Accreditation Application. I've cleaned that up. (The language did not change at all, just the citation.) Finally, given the complexity of OFAC, I've added a "caveat" as footnote 1 so that the reader will understand the initial section is just a high-level overview of OFAC (provided for context), and not legal advice, etc. Please review and let me know if you see any issues in the attached. *Please respond no later than 23:00 UTC . *This will be submitted before 23:59 UTC today for consideration by the Plenary. As a reminder, this will be submitted to the Plenary with an email including the following paragraph: *During the preparation of this Recommendation, the Subgroup considered an email where a registrar declined to do business with a potential reseller, based on the registrar’s policy of not doing business with people with Iranian passports. The Subgroup also learned that this registrar, which had been registering domains for a number of Iranian nationals, refused to continue to do business with them. The Subgroup has concluded that, to the extent these instances are related to OFAC, the concerns raised by these instances are adequately covered in the Recommendation already without any additional changes. This is not in any way a comment on the validity of these particular concerns. The Subgroup will consider creating a "stress tests" based on these scenarios.* Thank you! Greg

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Rec on choice of law
by Thomas Rickert Oct. 5, 2017

Oct. 5, 2017

Hi all, sorry I could only join part of the call today. Reading the recommendation on choice of law it strikes me odd that for most options disadvantages are explained. Only for the „status quo“ option, an avantage is mentioned. If the group has chosen not to add the advantages I mentioned on the menu option, that is fine. Only today I spoke to a company rep at the CENTR meeting in Brussels and mentioned where we stand with the discussion and what I heard is that they had a few interested parties from the Middle East for gTLD applications and they did not move forward because of the US contracts. Also, being presented with US legal concepts and contracts based on US law leads to the situation where non-US companies have to ask ICANN for permission to be compliant with their local laws. We have that with Data Retention Waiver requests for registers, the Whois exemption procedure and now with the whole GDPR debate (which I know is broader). I have gone through that on behalf of clients and can tell you that the Data Retention Waiver processes were costly, took a long time and required substantial debate with ICANN’s lawyers. That is not really acceptable and should be changed. A menu option helps with that. Let’s remember, applicants for these waivers were not asking for any privileges other than the privilege of being permitted to be compliant with their local laws and not run the risk of getting breach notices by ICANN. Best, Thomas

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Recordings, DAIRs, Raw Caption Notes for Jurisdiction Subgroup Meeting #49 | 4 October 2017
by MSSI Secretariat Oct. 4, 2017

Oct. 4, 2017

Hello all, You may find the recordings, Decisions, Action Items, Requests (DAIRs), and raw caption notes for CCWG Accountability WS2 Jurisdiction Subgroup Meeting #49 – 4 October 2017 posted at; https://community.icann.org/x/PC4hB The transcript will be posted on when it becomes available (usually in 3 to 5 business days after the call). A copy of the DAIRs and raw caption notes may be found below. Thank you. With kind regards, Brenda Brewer, Projects & Operations Assistant Multistakeholder Strategy & Strategic Initiatives (MSSI) Internet Corporation for Assigned Names and Numbers (ICANN) [cid:image001.png@01D33D17.335113D0] Action Items: * GS to submit OFAC recommendation for 11 October plenary. * GS to update Choice of law draft text per discussions today. * GS and staff to produce a draft final report for consideration by the sub-group on 11 October. Raw Captioning Notes Disclaimer: This rough edit transcript, which may contain missing, misspelled or paraphrased words, is only provided for your immediate review and is not certified as verbatim and is not to be cited in any way. * Word Doc<https://community.icann.org/download/attachments/69283388/CCWG-Accountabili…> * PDF<https://community.icann.org/download/attachments/69283388/CCWG-Accountabili…> Decisions: * OFAC recommendation approved to be submitted independently to the plenary today for consideration at the 11 October meeting including change to Resident section as discussed. * Choice of Law – update draft text with suggestions made at this meeting and put it up on list for discussion to be finalized on 11 October. * A draft final report will be provided to the list ASAP but will need to be approved at the 11 October sub-group meeting. * A final report of draft recommendations for the sub-group will have to be submitted for 11 October 23:59 UTC. Requests: * Participants review choice of law draft and draft final report. Documents Presented * Proposed Final OFAC Recommendation for Plenary<https://community.icann.org/download/attachments/69283388/Proposed%20Final%…> * Applicable Law Choice of Venue_Draft Recommendation<https://community.icann.org/download/attachments/69283388/Applicable%20Law%…>

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ISSUE - absence of choice of law clause in registry agreements
by Raphaël BEAUREGARD-LACROIX Oct. 4, 2017

Oct. 4, 2017

Dear all, I would like to officially submit this issue to the attention of our subgroup. I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these. and for reference purposes -The standard registry agreement (RA) I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to! Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is! *Issue* ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2 As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them. For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21: *1)* *The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate.* *2)* *The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages.* This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there. Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law. I would like to quote here ICANN legal's answer to our follow-up: *"Historically, not having a choice of law clause seems to have worked out well in practice. * *The lack of a choice of law clause, as far as ICANN is aware, has not presented big **problems for either ICANN or contracted parties. * *The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties **to interpret the performance requirements, their rights and obligations in the ordinary course.* *Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply. * *As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs **of the parties and ICANN’s global coordination function"* I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective. Moreover, I plainly reject the contention that *"The plain language of the agreement *(allows)* the parties to interpret the performance requirements, their rights and obligations in the ordinary course."* The only time this can be true is between US parties. This is just wrong for parties outside the US. We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law... The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute. As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not. As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses. *Solution* Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else. I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable. Best,

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Agenda and Documents for upcoming call
by Greg Shatan Oct. 4, 2017

Oct. 4, 2017

All: Here are the agenda and documents for our upcoming call at 1300-1430 UTC today. 1. Agenda 2. Proposed Final OFAC Recommendation (Second Reading) 3. OFAC Recommendation with Proposed Changes 4. Choice of Law and Venue Recommendation Based on discussions on last week's call and on the list, it seems clear that the proposed changes in document 3 did not get sufficient traction to be included in the Final OFAC Recommendation, which remains unchanged from last week, including the two small additions to the final paragraph that were discussed on that call. If approved by the Subgroup, the OFAC Recommendation would be delivered to the Plenary, with the following note in the email: *During the preparation of this Recommendation, the Subgroup considered an email where a registrar declined to do business with a potential reseller, based on the registrar’s policy of not doing business with people with Iranian passports. The Subgroup also learned that this registrar, which had been registering domains for a number of Iranian nationals, refused to continue to do business with them. The Subgroup has concluded that, to the extent these instances are related to OFAC, the concerns raised by these instances are adequately covered in the Recommendation already without any additional changes. This is not in any way a comment on the validity of these particular concerns. The Subgroup will consider creating a "stress tests" based on these scenarios.* I look forward to our call. Greg

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Re: [Ws2-jurisdiction] [EXTERNAL] issues on applicable law
by Burr, Becky Oct. 3, 2017

Oct. 3, 2017

FWIW, punitive damages are not usually permitted in contract disputes – I wonder why ICANN includes them at all. Also, rather than requiring ICANN to agree to submit to the jurisdiction of every country where it has a relationship with a registry or registrar, is it worth considering regional jurisdiction? Contracts with European registries and registrars could specify Swiss or Dutch or some other law, etc.? J. Beckwith Burr Neustar, Inc. / Deputy General Counsel & Chief Privacy Officer 1775 Pennsylvania Avenue NW DC 20006 Office: +1.202.533.2932 Mobile: +1.202.352.6367 Follow Neustar: LinkedIn / Twitter Reduce your environmental footprint. Print only if necessary. ________________________________ The information contained in this email message is intended only for the use of the recipient(s) named above and may contain confidential and/or privileged information. If you are not the intended recipient you have received this email message in error and any review, dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in error, please notify us immediately and delete the original message. From: <ws2-jurisdiction-bounces(a)icann.org<mailto:ws2-jurisdiction-bounces@icann.org>> on behalf of "Jorge.Cancio(a)bakom.admin.ch<mailto:Jorge.Cancio@bakom.admin.ch>" <Jorge.Cancio(a)bakom.admin.ch<mailto:Jorge.Cancio@bakom.admin.ch>> Date: Wednesday, September 6, 2017 at 4:19 PM To: "ws2-jurisdiction(a)icann.org<mailto:ws2-jurisdiction@icann.org>" <ws2-jurisdiction(a)icann.org<mailto:ws2-jurisdiction@icann.org>> Subject: [EXTERNAL] [Ws2-jurisdiction] issues on applicable law Dear all, Here are, for your convenience, the two issues I have tried to briefly explain during today’s conference call, for your consideration. As said, the main thought is to reduce uncertainty, and clarify that the parties to the registry agreements have an effective freedom to choose the applicable law and to apply a principle of subsidiarity that may reduce potential conflicts with the national laws where they are based. == 1. Issue: The law applicable to the Registry Agreement has been identified as being the main issue: The Registry Agreement contains no provision relative to the choice of jurisdiction, the applicable law consequently not being defined by the Agreement. This creates great legal uncertainty and a potential issue as regards the jurisdiction given that it would be the prerogative of the arbitrators or the judges having jurisdiction -who could come from a US Court- to determine what law governs the relationship between ICANN and the registry. Pursuant to the current business practice, the applicable law is that of the party that provides the service in question, i.e. ICANN, a priori. A registry should therefore expect the potentially applicable law to be the law of the State of California. The applicable law further determines the faculty of ICANN to claim punitive or exemplary damages (i.e. under US law, damages highly surpassing the damage actually suffered, in order to punish a behavior), in the event the registry were to breach the contract in a deliberate and repeated manner (section 5.2 of the Registry Agreement.) This well-established institution of Common Law is non-existent under Swiss law, which follows the principle of compensation (damages are used to repair the damage but cannot enrich the claimant,) and should be considered to be contrary to public order. Were the Swiss law to apply to the Agreement, such damages would not be granted. Following the principles of the institutions typical to the Common Law provided for in the Registry Agreement poses issues of compatibility with other legal orders and suggests that Californian law would -a priori- apply to the Registry Agreement. Possible solutions: The applicable law should be determined on the basis of the legitimate expectations which the parties may have in terms of applicable law. It is understandable and appropriate that the fundamental provisions or duties contained in the Registry Agreement should apply equally to all registries around the world and be therefore interpreted in a uniform way. Beyond a few provisions and duties which are absolutely fundamental, it would be judicious and consistent with a legitimate expectation that the contractual relationship between ICANN and a registry be subject to the national law of the latter. The foregoing is all the more reasonable given that the manager of a generic domain (TLD) is delegated broad powers, as it is within its scope to establish the purpose of the domain, the eligibility, or the terms of the assignment of domain names, not to mention that it has great freedom as to the way in which a domain is actually managed. There already exist special provisions for registries that are IGO/Governmental entities (section 7.16 registry agreement): if international law is at stake, there is a procedure (mediation and arbitration ex 5.2.) to resolve disputes between the registry and ICANN – this special provision could be extended: - To other registries that are not IGOs/Public authorities - To cover not only “international law obligations” but also national law obligations 2. Issue: arbitration clause With regard to territorial jurisdiction, the arbitration clause (section 5.2 of the Registry Agreement entitled "Arbitration text for intergovernmental organizations or governmental entities") has allowed the ".swiss" registry to submit itself to the arbitration of the International Court of Arbitration of the International Chamber of Commerce in Geneva, Switzerland. This provision also provides for some flexibilities restricted to IGOs or governmental entities as regards the competent court. However these flexibilities are not open to all registry operators. Possible solutions: It would be wise in our opinion: - to also allow private registries to decide on the choice of their arbitration/competent court; - to broaden the possibilities of choice for all registries (by principle, to choose an arbitration recognized in each country.) == Hope this may be considered. Regards Jorge Jorge Cancio International Relations Federal Department of the Environment, Transport, Energy and Communications DETEC Federal Office of Communications OFCOM Zukunftstrasse 44, CH 2501 Biel Tel. +41 58 460 54 58 (direct) Tel. +41 32 327 55 11 (office) Fax +41 58 460 54 66 mailto: jorge.cancio(a)bakom.admin.ch<mailto:mailto:%20jorge.cancio@bakom.admin.ch> www.bakom.admin.ch<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.bakom.admin.ch_&d=D…> [cid:image001.png@01D2F585.7A604270] Igf2017.swiss<https://urldefense.proofpoint.com/v2/url?u=https-3A__igf2017.swiss_&d=DwMFA…> info(a)igf2017.swiss<mailto:info@igf2017.swiss>

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OFAC Recommendation
by Greg Shatan Oct. 2, 2017

Oct. 2, 2017

All, In order to finalize the OFAC Recommendation, I attach a copy of the latest draft of the OFAC Recommendation with several proposed changes. I need to ascertain the level of support for including these changes. On our last call, we discussed these proposed changes, and also suggestions made on the list to include an instance involving the registrar Resello. Based on that call and discussion on the list, I believe that the group supports finalizing the document without the suggested changes. As discussed on the call, I am distributing this version of the OFAC Recommendation with the following statement: *During the preparation of this Recommendation, the Subgroup considered an email where a registrar declined to do business with a potential reseller, based on the registrar’s policy of not doing business with people with Iranian passports. The Subgroup also learned that this registrar, which had been registering domains for a number of Iranian nationals, refused to continue to do business with them. The Subgroup has concluded that, to the extent these instances are related to OFAC, the concerns raised by these instances are adequately covered in the Recommendation already without any additional changes. This is not in any way a comment on the validity of these particular concerns. * If you have not already done so, please respond and indicate whether or not you support the inclusion of these suggested changes or the Resello matter in the OFAC Recommendation. Thank you. Greg

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