SIMPLIFICATION RULES - FAQ Q: Could you give an example to illustrate the change on not doing automatic reversal anymore as of January 2012? October 20th, 2011 Q: What do receivables mean? Q: What do payables mean? Q: What does prescribed mean? Q: What is a reversal transaction? Q: I have been paid royalties for a given work a few years ago. In October 2011, another rightsholder has declared rights on the same work. This has created a conflict on those broadcasts for which I had been paid. Past January 2012, can those royalties be reversed from my account, should it turn out that I did not own the rights? Q: AGICOA has announced that it was putting an end to its automatic reversal system in certain situations. Are conflict resolutions the only cases that led to reversals? Q: How do I avoid the situation where someone else is paid on a work for which I believe I should be the one to be paid? Q: What option is available to me when I realize someone else was paid on broadcasts I have claimed? Q: Could you give an example to illustrate the change on not doing automatic reversal anymore as of January 2012?
A: Let's compare what we are doing today with the situation as of January 2012:
Prior January 2012
As of January 2012
A: Royalties due to AGICOA by rightsholders, in effect a debt.
A: Royalties due by AGICOA to rightsholders.
A: To become invalidated or unenforceable by the process of prescription (the limitation of time beyond which a debt is no longer valid or enforceable).
A: A transaction that recovers monies from rightsholders, previously paid, for example, as a consequence of an adverse conflict resolution.
A: No, as on 1 January 2012, when the new rules are implemented, AGICOA will terminate the system of automatically reversing royalties paid to the incorrect rightsholder.
A: No, prior to introduction of the new rule, a rights reduction, such as a withdrawal or modification of rights declared in the past, would also have led to a reversal, had payment already occurred based on the previously declared rights. The new rule will put an end to such automatic practice: royalties will remain with the paid rightsholder.
A: As a general rule, declare your rights at your earliest. Otherwise you will need to engage directly with the other rightsholders.
A: Contact the paid party and settle among yourselves.
A: Let's compare what we are doing today with the situation as of January 2012:
| Prior January 2012 | As of January 2012 |
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Q: What happens if two rightsholders’ claims are sent to AGICOA before payment takes place?
A: A conflict is detected; no broadcasts will be paid, whilst royalties will be set aside pending conflict resolution.
Q: Can AGICOA certify there will not be any new reversal transactions generated in rightsholders’ accounts from 1 January 2012 onwards?
A: No, as there are a few cases where such reversal transactions may still be generated. An example being a distribution that was processed using incorrect audience figures. In such a case, where AGICOA has made a material mistake, reversals would be generated in the accounts of rightsholders that were overpaid in order to pay those rightsholders that were underpaid.
Conversely, in cases where AGICOA has performed correctly a distribution - even though the rights declared by a rightsholder may later turn out to be incorrect - AGICOA will not generate a reversal transaction as per current practice (pre-2012).
Q: What will happen to receivables in my account on 31 December 2011?
A: All receivables that were in a rightsholder account before 1 January 2012 will remain in its account, with the exception of those covered and erased due to statute of limitation.
Q: What does netting out mean, and which transactions are taken into consideration?
A: By netting out, we mean adding payables and receivables, across all catalogs of all clients of a given agent, on a given distribution. As no new receivables are created in rightsholders’ accounts starting 1 of January 2012, the only receivables that may be netted out are those that were in the account prior to 1 January 2012.
Q: As an agent, I wonder how the new agent’s responsibility will be enforced. Does this have any retroactive impact? Or just from 1 January 2012 onwards?
A: The netting out mentioned in the new rule will be enforced at each payment run, starting 1 January 2012.