ECT-6. Finance & Commercials

(Swiss private-law multilateral; EN controls; FR/DE companions may be issued. Cross-refs: ECT-1 (Nature), ECT-2 (Governance/CB Secretariat), ECT-3 (Interfaces), ECT-4 (Legal/Compliance), ECT-5 (IP/Data), ECT-7 (Term/DR); GRF Bylaws Arts. 9 (Authorities/CB), 13–16 (Records; Finance; Data/Security; Ethics), Bylaw 7 (Procurement). “CB” = each Party’s non-executive Privy Council; “CSR” = Council System of Record; “CRE” = Council Register Extract.)

6.0 Principles, Scope & Construction

(a) Independence & neutrality. Financial arrangements shall not condition agenda, methods, editorial control, procurement, or staffing (ECT-4.1).
(b) Arm’s-length & auditability. All transfers are priced or valued at arm’s-length and are CB-cleared, CSR-logged (CRE), and (where material) gazetted with lawful redactions.
(c) Proportionality. Cost/revenue rules scale with materiality and risk (privacy, sanctions/export, capital).
(d) Non-exclusivity. No exclusive lock-ups that foreclose FRAND/open participation (ECT-4.1.1(2)).
(e) Tax & lawfulness. Parties remain responsible for their own tax, regulatory, and reporting obligations; structures must remain lawful in all relevant jurisdictions.
(f) Hierarchy. This Article governs ECT-scoped finance; where a Party’s internal control is stricter, the stricter rule prevails for that Party.

6.1 Cost-Sharing & In-Kind Contributions

6.1.1 Allocation Principles

1. Benefit-control nexus. Costs are allocated to the Parties that control and benefit from the workstream.
2. Direct vs. indirect.
   • Direct: staff sprints, specialist vendors, data/model validation, convening logistics.
   • Indirect: management overhead, general IT/security, insurance—recoverable only per agreed indirect cost cap.
3. Equity guardrail. Where a public-interest objective would be impeded by strict benefit allocation, the Joint Committee may approve solidarity co-funding with a stated rationale (CRE-logged).

6.1.2 Budgeting & Variances

1. ECT Workplan & Budget. Adopted annually by the Joint Committee (≥2/3 vote for Tier-S/H workstreams); includes cost centers, rate cards, and variance thresholds.
2. Reforecasts. Mid-year reforecast permitted; adverse variance >10% or scope change requires re-approval.
3. Commitment controls. No Party may commit others above approved caps without CB Pre-Clearance and recorded consent.

6.1.3 Rate Cards & Indirect Cost Caps

1. Rate cards (person-day bands by role; standard VDR/clean-room day rates; validation/red-team unit costs) are published in Annex ECT-R and reviewed annually.
2. Indirect cost cap: unless otherwise approved, indirect/overhead recovery is capped at ≤15% of eligible direct costs per Party for the relevant workstream.

6.1.4 In-Kind Contributions (Valuation & Evidence)

1. Recognized in-kind: personnel time, compute/GPU hours, datasets/licenses, venues, software, tooling, secondments.
2. Valuation follows Annex ECT-V: cost-based or fair-value (3rd-party quotes/benchmarks), no double counting; CB validates method.
3. Evidence pack: contributor certification, timesheets or usage logs, valuation worksheet, and CB note → CSR (CRE).

6.1.5 Invoicing, Currency, Taxes & Settlement

1. Currency: CHF default; local currency allowed if specified in the Workplan; FX translation per ECB/Swiss National Bank daily at invoice date unless parties agree a hedge rate.
2. Taxes: prices are exclusive of VAT/withholding; each Party manages VAT registration and withholding tax relief (e.g., treaty forms).
3. Payment terms: Net 30 days from undisputed invoice receipt; late interest at SOFR + 200 bps (or Swiss SARON + 200 bps) where lawful.
4. Set-off: no cross-workstream set-off without consent.
5. Disputes: notify within 10 Business Days with reasons; undisputed portion is payable on time.

6.1.6 Pooled Funds, Escrow & Treasury Controls

1. Pooled funds (e.g., joint validation or DRF standby costs) require CB-cleared account mandates, dual signatories, and bank/custodian selection per Annex ECT-H (Treasury & Payments).
2. Escrow for conditional deliverables (e.g., model weights) is permitted with neutral escrow agents and release conditions logged in CSR.
3. No borrowing/guarantees on behalf of the ECT absent Joint Committee approval (≥2/3) and CB Pre-Clearance.

6.1.7 Audit & Records

1. Records: cost documentation retained ≥10 years (or longer if law/license requires).
2. Audit rights: reasonable-notice agreed-upon procedures or audit; sampling allowed; findings and remediation plans filed in CSR (CRE).

6.2 Revenue Sharing & Facilitation Fees

6.2.1 Revenue Classes (illustrative, not exhaustive)

(a) IP Licensing: code/models/data/content licensed under Open/FRAND/commercial terms (ECT-5.1.3).
(b) Publications & Services: paid briefings, training, certification, benchmarking.
(c) Convenings: tickets, exhibition space, neutral sponsorships (independence walls apply).
(d) Platform Access: subscriptions or API usage for Nexus Platforms (e.g., NXSGRIx, NXS-DSS), where permitted.
(e) Capital Facilitation: neutral facilitation fees for mobilizing DRF/NSF rails (not success fees tied to policy outcomes).

6.2.2 Allocation Waterfall (default; specifics in Annex ECT-R)

1. Gross receipts
2. Less: direct, documented costs of generation/delivery (venue, bandwidth, validation, merchant fees).
3. Less: ECT maintenance reserve (default 5–10% for public-good upkeep; cap per ECT-R).
4. Remainder split by class:
   • IP Licensing: Creator Share (Party/Parties that created Foreground IP) 50–70%; Platform/Coordination Share 30–50% split among Parties per contribution keys.
   • Publications & Services: Delivering Party 60–80%; Coordination 20–40%.
   • Convenings: After costs, split per contribution & risk (e.g., Host 40–60%, Co-producers 20–40%, Coordination 10–20%).
   • Platform Access: Operating Party ≥60%; remaining to content/data contributing Parties pro-rata to usage.
   • Capital Facilitation: flat, disclosed facilitation fee (e.g., 25–100 bps) to the facilitating Party(ies); no contingency on policy positions, donor outcomes, or vendor selection.
5. Deviations require Joint Committee approval (≥2/3) and CB Pre-Clearance; all waterfalls published in Annex ECT-R.

6.2.3 Neutrality & Competition Law Safeguards

1. No exclusivity in revenue channels that forecloses open participation (ECT-4.1).
2. No success fees with public authorities unless expressly permitted by law and CB-cleared.
3. Competition law: information sharing limited to what’s necessary; prices/terms set independently when Parties compete downstream.

6.2.4 Transparency & Reporting

1. Quarterly statements to Parties: class-by-class receipts, costs, reserves, allocations; CRE reference.
2. Gazette: annual public summary of ECT revenues by class (lawful redactions).
3. Beneficiary audit trails for capital facilitation (who paid, what service, basis).

6.2.5 Tax, PE, and Transfer Pricing

1. No joint venture/PE. This Article does not create a partnership or permanent establishment (PE) for another Party; each manages local tax exposures.
2. Transfer pricing: allocations reflect arm’s-length contributions; document in ECT-R and retain evidence in CSR.

6.2.6 Remedies

Misallocation or undisclosed side-payments → re-statement, clawback, interest, and, where willful, discipline or suspension under ECT-7.2; notice in Gazette (redactions as lawful).

6.3 Grants & Donor Restrictions (CB Clearance)

6.3.1 Acceptance Criteria (Independence First)

1. CB Pre-Clearance with a documented Independence Impact Assessment (IIA) is mandatory for any restricted or donor-branded funding used for ECT activities.
2. Inadmissible sources: sanctioned/debarred parties; sources seeking policy capture; funding conditioned on agenda, methods, or vendor selection.
3. Sanctions/KYC/AML screens per ECT-4.3; adverse findings → ineligibility or conditions.

6.3.2 Ring-Fencing & Use of Funds

1. Segregation: restricted funds are held in distinct cost centers (or accounts), with permitted uses encoded in grant Schedules; no cross-subsidy without donor-approved amendment.
2. Indirect cost policy: unless grant terms state otherwise, indirect recovery limited to the ECT indirect cap (§6.1.3).
3. Matching requirements: documented and monitored; in-kind matches valued per ECT-V.

6.3.3 Terms, Acknowledgment & Branding

1. Acknowledgment: text-only recognition preferred; no logo lock-ups or exclusivity absent ≥4/5 Joint Committee approval and CB conditions (ECT-4.1.5).
2. Publication freedom: grants cannot restrict the publication of factual findings or model cards; reasonable embargo windows (≤60 days) allowed for legal/safety review.
3. Open access: public-interest outputs default to Open/FRAND licenses (ECT-5.1.3); exceptions require stated legal/safety basis.

6.3.4 Reporting, Audit & Donor Transparency

1. Reports: content, cadence, and KPIs set in the grant Schedule; copies filed in CSR (CRE).
2. Audits: donor audits permitted where customary, subject to confidentiality, privacy, and export-control limits; joint audits coordinated through CB.
3. Public register: CB maintains a Donor & Dues Register with source, amount, purpose, and restrictions (redacted where necessary).

6.3.5 Termination, Reversion & Cure

1. Breach: material breach of independence, sanctions, or lawful-use terms → suspend drawdowns; propose a cure plan within 30 days (shorter for safety/privacy breaches).
2. Reversion: on termination, undisbursed balances revert per grant terms; artifacts created remain licensed per ECT-5 unless lawfully withdrawn for safety/legal reasons; CRE records outcomes.

6.3.6 Anti-Corruption & Ethics

1. Prohibitions: no bribes, kickbacks, or facilitation payments; no political contributions from grant funds; no donor-linked procurement influence.
2. Training: personnel on ECT grants complete annual anti-corruption and independence training; certifications held in CSR.

6.4 Administration & Annexes (Normative)

• ECT-R — Revenue-Share & Facilitation Rules (classes, splits, reserves, examples, TP memos).
• ECT-V — Valuation of In-Kind (methods, worksheets, evidence packs, review cadence).
• ECT-H — Treasury & Payments (banking mandates, signatory matrix, escrow patterns, FX/hedging).
• ECT-G — Grant Schedules & Independence Clauses (IIA template, branding rules, publication safeguards).

Design result: A Swiss-grade, trust-minimized financial spine—clear cost-sharing, auditable in-kind valuation, neutral revenue waterfalls, and stringent grant/independence controls—executed through CB Clearances, CSR records, and Gazette transparency so ECT cooperation remains lawful, independent, non-exclusive, and scalable.