Guidelines for the Distribution of Remuneration for the Rental of Commercial Phonograms in Japan

1. The American Federation of Musicians (“AFM”) and the American Federation of Television and Radio Artists (“AFTRA”) have designated the AFM & AFTRA Intellectual Property Rights Distribution Fund (“Fund”) as their agent for the distribution of remuneration for the rental of commercial phonograms (“records”) in Japan, pursuant to an agreement (“the Annex”) entered into on October 19, 1997 between AFTRA, the AFM, the Alliance of Artists and Record Companies (“AARC”) and the Japan Council of Performers’ Organizations (“GEIDANKYO/CPRA”).

2. The Fund shall distribute remuneration received from Geidankyo/CPRA for the rental in Japan of records produced in the United States. In accordance with the Annex, the distribution shall be made to non-featured performers. A non-featured performer on a recording for which remuneration is being distributed is a performer who does not have a royalty contract with respect to that record.

3. Pursuant to the Annex, Geidankyo/CPRA will provide the Fund with remuneration and record rental data attributable to a specific calendar year. For each calendar year for which the Fund receives remuneration and data, the Fund shall publish on its web site the list of records provided in the data. This publication shall take place at least sixty days prior to any distribution for the relevant calendar year. The Fund shall also publish a notice announcing the posting of this list in such trade, music or other related publications as the Fund deems practical and appropriate for the purpose of informing non-featured performers regarding the posting of the list.

4. The record list posted on the Fund website shall identify all the non-featured performers known to have participated on each record. It shall also identify the records for which it believes all non-featured performers have been identified and the approximate date of distribution to performers on these records. The website shall provide a method for non-featured performers to make claims to the Fund that they performed on a record and/or provide personal or contact information. A non-featured performer may also make a claim in writing to the AFM and AFTRA Intellectual Property Rights Distribution Fund at 12001 Ventura Place, 5th Floor, Studio City, CA 91604. A non-featured performer who has been omitted from the credits for a record shall have forty-five days from the publication of the notice announcing the posting of the list to make a claim to the Fund. The Fund, in its sole discretion, may process claims received after forty-five days but prior to disbursement.

5. In preparing for distributions, the Fund may rely on information available to it (e.g. session reports and website responses) and information available to the public (e.g. liner notes, on-line services), in its discretion, unless it is demonstrated that the information is not accurate.

6. A regular distribution is the first distribution made of the remuneration received from Geidankyo/CPRA for a specific calendar year. A regular distribution shall be made when, in the judgment of the Administrator, all of the non-featured performers have been identified for such a substantial number of records on the list for a particular calendar year that a regular distribution is appropriate. A supplemental distribution is a further distribution made for that calendar year.

7. Prior to each regular or supplemental distribution, the Fund shall withhold a sum, the amount of which shall be determined by the Fund, for the purposes (1) of resolving disputes, and (2) correcting errors and/or omissions from any prior regular or supplemental distribution of the remuneration for that calendar year. Such withheld sums shall be known as the omissions fund.

8. The Fund shall deduct administrative expenses from the funds to be distributed prior to distribution. Administrative expenses may include, but shall not be limited to, costs of staff, consultants, research, administration, services, equipment or other fees at the discretion of the Trustees.

9. All money that remains unclaimed (with the exception of amounts held as deminimus or in the omissions fund) at the time of the Fund’s next distribution shall revert to the Fund for the next subsequent distribution.

10. The Fund shall distribute the record rental remuneration in accordance with the following.

1. The record rental data provided by Geidankyo/CPRA includes an assignment of rental units based on the frequency of each record’s rental in Japan during the calendar year. The distribution made for each record shall be in proportion to the number of rental units assigned to it by Geidankyo/CPRA as compared to the total number of rental units.
2. A record shall be included in a regular distribution or supplemental distribution when, in the judgment of the Fund, its non-featured performers have been identified.
3. The monetary distribution amount in a regular distribution is the remuneration received from Geidankyo/CPRA for the relevant calendar year, minus the deductions for administrative expenses and the omissions fund.
4. The amount to be distributed for each record in a regular distribution is determined by dividing the number of its rental units by the total number of rental units for all records receiving a distribution in order to determine the percentage of the monetary distribution amount it shall receive, and then multiplying its percentage times the monetary distribution amount. In supplemental distributions, the value of each rental unit shall be based upon the value of each rental unit as determined in the regular distribution.
5. For each record, each individual non-featured performer (whether he or she is an instrumental musician, music preparation person or vocalist) who performed on the record shall receive a single credit for that record, regardless of the number of cuts or parts performed. The amount to be distributed for that record shall be divided equally between the non-featured performers.
6. In order to achieve an efficient scale of operation, the Fund will not generate a check or a royalty statement to an individual who is not entitled to receive $10.00 or more (“deminimus threshold”). The Fund will establish a carry over procedure and will issue a check and royalty statement to that individual when the $10.00 threshold has been cumulatively satisfied. In determining whether such cumulative deminimus threshold has been met, the Fund will aggregate any sums held as deminimus from other revenue streams subject to a distribution from the Fund (e.g. a non-featured performer who is entitled $4.00 from Japanese record rentals, $5.00 from private home taping monies, and $2.00 from a DPR distribution would be issued a check and a royalty statement even though none of the specific revenue sources satisfied the deminimus threshold).   

11. In the event a non-featured performer feels aggrieved by the actual or proposed distribution of royalties, but not by the distribution formula, s/he may seek an adjustment by writing to the Administrator within 90 days of the distribution and setting forth the grounds for the complaint. The Administrator shall review the complaint and provide a written decision within thirty days. If the non-featured performer does not accept the decision of the Administrator, s/he may appeal the decision to the Trustees of the AFM/AFTRA Intellectual Property Rights Distribution Fund. The appeal must be sent to the Trustees at AFM and AFTRA Intellectual Property Rights Distribution Fund at 12001 Ventura Place, 5th Floor, Studio City, CA 91604 within sixty days of the Administrator’s decision, and must set forth the grounds for the appeal in writing. The Trustees shall review the appeal and reach a decision no later than sixty days from the date of the appeal. The Trustees shall advise the Administrator and the non-featured performer of their decision, which shall be final.

12. In reaching their determinations, the Administrator and the Trustees shall follow the distribution methodology set forth in these Guidelines, supplemented by the principles of law and equity. The Administrator and the Trustees shall not consider the complainant’s union status.

13.The Fund shall not make a distribution to any Participant, except as provided herein, who does not posses a valid Tax Identification Number (TIN), which may be any of the following:

• Social Security Number " SSN"
• Employer Identification Number " EIN"
• Individual Taxpayer Identification Number " ITIN"
• Taxpayer Identification Number for Pending U.S. Adoptions " ATIN"

When a foreign withholding tax obligation exists with respect to a distribution to a foreign resident who does not posses a SSN, but does posses a valid TIN, the Fund shall withhold the default statutory amount unless the Participant provides the Fund with a fully completed IRS Form 8233, in which case the Fund shall apply provisions in accordance with the applicable treaty.
Alternatively, participants in foreign territories who either are unable to, or elect not to acquire a valid TIN, may complete and submit a TIN Waiver Form provided by the Fund, in which case the Fund will remit the applicable payment to the participant after deducting the default statutory amount (currently 30%). When a foreign withholding tax obligation exists with respect to a distribution to a foreign resident who does not possess a SSN, but does possess a valid TIN, the Fund withholds the default statutory amount (currently 30%) unless the Participant provides the Fund with a fully completed IRS Form 8233, in which case the Fund applies the provisions in accordance with the applicable treaty of the country in which the participant resides.  Foreign residents should consult their tax professional with any questions or to receive advice with respect to these payments.
For Non-Resident Alien Participants If you wish to inquire about ITIN, Exemption from withholding Form 8233, and/or the reporting of your payment on form 1042,  you may refer to this website for assistance:  http://www.artistsfromabroad.org/taxes/appendix.html

14. For each participant for whom the AFTRA or AFM pension fund has information, we will use the beneficiary or beneficiaries they have designated with respect to their respective pension fund as follows:

• For participants for whom neither fund has information, then a beneficiary or beneficiaries named in a will shall apply. In the event a participant dies without a will, then (A) The widow or widower shall be the sole beneficiary unless there are any surviving children, in which case the widow or widower is entitled to one-half of participant’s interest; (B) The participant’s surviving children shall receive the participant’s entire interest unless there is a widow or widower, in which case the ownership of one-half of the participant’s interest is divided among the children; (C) The participant’s children’s one-half interest shall be divided among them on a pro rata basis according to the number of children.

• We will allow multiple beneficiaries, but not allow a beneficiary or beneficiaries to name subsequent beneficiaries (e.g. benes of benes will not be allowed);

• The Fund’s website shall list those deceased participants for whom we have a payment but no beneficiary to enable potential beneficiaries to contact us;

• The Fund will not maintain or solicit separate beneficiary declarations, but shall rather utilize those specified above in order to minimize the administrative burden.