[cabf_validation] Proposed draft Ballot 225 to strengthen EVGL 11.6 - Operational Existence

[Peter Bowen]

Chris,

I’ve got a few comments.

I assume that not all national taxing authorities will release tax returns to third parties, even if the taxpayer authorizes the release.  There also appear to be a handful of countries with no corporate tax[1].  For places with no corporate tax or which do not provide copies of tax returns, is the only option for companies to show the demand deposit account?

What drives the 18 month requirement?  How do you handle an existing company expanding to a new country and setting up a new subsidiary for the country?  What about spin-outs?  When HP split into HP Inc and HP Enterprise, would one of the companies been precluded from getting EV certs?

How do you handle Business Entities that are sole proprietorships and only have a bank account in the name of the proprietor?

Thanks,
Peter


[1] https://taxfoundation.org/corporate-income-tax-rates-around-world-2015/ <https://taxfoundation.org/corporate-income-tax-rates-around-world-2015/>


> On May 21, 2018, at 3:22 PM, Chris Bailey via Validation <validation at cabforum.org> wrote:
> 
> All, <>
>  
> To help strengthen EVGL tests to verify an Applicant’s “operational existence” under EVGL 11.6, we have drafted the attached pre-ballot for Ballot 225 – Improvements to EV Guidelines Sec. 11.6.  We’d like comments from others.
>  
> We are also looking for endorsers.
>  
> Tim – can you add this to the Validation Working Group’s Agenda for this Thursday’s call?
>  
> Thanks.  Chris
>  
> *****
>  
> Ballot 225: Improvements to EV Guidelines Sec. 11.6 – Operational Existence
>  
> The following motion has been proposed by Chris Bailey of Entrust Datacard and endorsed by XXX of XXX and YYY of YYY.
>  
> Purpose of Ballot: This ballot will strengthen the EV authentication process to verify an Applicant’s operational existence.
>  
> Existing EVGL Section 11.6.2(2) allows CAs to validate an applicant for an EV cert that was incorporated less than 3 years ago by finding the Applicant in a QIIS.  This ballot will no longer allow use of a QIIS to verify that an Applicant less than 3 years old has “operational existence” under EVGL Section 11.6, as it appears some QIISs are not strong enough to be used for this purpose.  This ballot also makes other changes to EVGL Section 16.2 to strengthen the verification of an applicant’s operational existence.
>  
> — MOTION BEGINS –
>  
> This ballot modifies the Baseline Requirements and Extended Validation Guidelines as follows:
>  
> 1. Amend Section 4 – Definitions as follows:
>  
> Qualified Government Tax Information Source: A national taxing authority which provides a confirmed copy of an Applicant’s tax return directly to a CA with the written consent of an Applicant.  An example is the United Stated Internal Revenue Service which will provide a confirmed copy of a taxpayer’s tax return directly to a third party if the taxpayer signs IRS Form 4506.  See https://www.irs.gov/pub/irs-pdf/f4506.pdf 
>  
> A Qualified Governmental Information Source that specifically contains tax information relating to Private Organizations, Business Entities, or Individuals.
>  
> 2. Amend EV Guideline Section 11.6 as shown below.
>  
> 11.6.2. Acceptable Methods of Verification
>  
> Applicants that have been in existence (as measured by the date of incorporation or formation) for less than 18 months are not eligible for EV certificates.
>  
> To verify the Applicant’s ability to engage in business, the CA MUST verify the operational existence of the Applicant, or its Affiliate/Parent/Subsidiary Company, by:
>  
> (1) Verifying that the Applicant, Affiliate, Parent Company, or Subsidiary Company has been in existence for at least three years (as measured by the date of incorporation or formation), as indicated by the records of an Incorporating Agency or Registration Agency.  If the Applicant has changed its name in the records of the Incorporation Agency or Registration Agency during the prior three years, the CA must verify the Applicant’s operational existence by following the procedures of (2) or (3) below;
>  
> (2) Obtaining the most recent tax return filed by the Applicant with a national taxing authority from a QTIS; or
>  
> Verifying that the Applicant, Affiliate, Parent Company, or Subsidiary Company is listed in either a current QIIS or QTIS;
>  
> (3) Verifying that the Applicant, Affiliate, Parent Company, or Subsidiary Company has an active current Demand Deposit Account in the Applicant’s own name with a Regulated Financial Institution by receiving authenticated documentation of the Applicant's, Affiliate's, Parent Company's, or Subsidiary Company's Demand Deposit Account directly from a Regulated Financial Institution.; or
>  
> (4) Relying on a Verified Professional Letter to the effect that the Applicant has an active current Demand Deposit Account with a Regulated Financial Institution.
>  
> — MOTION ENDS –
>  
> The procedure for approval of this ballot is as follows:
>  
> Discussion (7+ days)
>  
> Start Time: 2018-06-xx at 15:00:00 EDT
>  
> End Time: 2018-06-xx at 15:00:00 EDT
>  
> Vote for approval (7 days)
>  
> Start Time: 2018-06-xx at 15:00:00 EDT
>  
> End Time: 2018-06-xx at 15:00:00 EDT
>  
>  
> 
> <Ballot 225 - Improvements to EV Guidelines Sec. 11.6 (5-21-2018).docx>_______________________________________________
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