Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

Revisiting FIFA’s Training Compensation and Solidarity Mechanism - Part.1: The historical, legal and political foundations - By Rhys Lenarduzzi

Editor’s note: Rhys Lenarduzzi is a final semester Bachelor of Law (LL.B) and Bachelor of Philosophy (B.Phil.) student, at the University of Notre Dame, Sydney, Australia. As a former professional athlete, then international sports agent and consultant, Rhys is interested in international sports law, policy and ethics. He is currently undertaking an internship at the T.M.C. Asser Institute with a focus on Transnational Sports Law.


In 2019, training compensation and solidarity contributions based on FIFA’s Regulations on the Status and Transfer of Players (RSTP) amounted to US$ 75,5 million. This transfer of wealth from the clubs in the core of the football hierarchy to the clubs where the professional players originated is a peculiar arrangement unknown in other global industries. Beyond briefly pointing out or reminding the reader of how these systems work and the history behind them, this blog series aims to revisit the justifications for FIFA-imposed training compensation and the solidarity mechanism, assess their efficacy and effects through a case study of their operation in the African context, and finally analyse the potential impact of upcoming reforms of the FIFA RSTP in this context.

First, it is important to go back to the roots of this, arguably, strange practice. The current transfer system and the legal mechanisms constituting it were largely the result of a complex negotiation between European football’s main stakeholders and the European Commission dating back to 2001. The conclusion of these negotiations led to a new regulatory system enshrined in Article 20 and Annex 4 of the RSTP in the case of training compensation, and at Article 21 and Annex 5 in the case of the solidarity mechanism. Before paying some attention to the historical influences and how we arrived at these changes, as well as the justifications from the relevant bodies for their existence, let us briefly recall what training compensation and the solidarity mechanisms actually are. More...



Invalidity of forced arbitration clauses in organised sport…Germany strikes back! - By Björn Hessert

Editor's note: Björn Hessert is a research assistant at the University of Zurich and a lawyer admitted to the German bar.

 

The discussion revolving around the invalidity of arbitration clauses in organised sport in favour of national and international sports arbitral tribunals has been at the centre of the discussion in German courtrooms.[1] After the decisions of the German Federal Tribunal[2] (“BGH”) and the European Court of Human Rights[3] (“ECtHR”) in the infamous Pechstein case, this discussion seemed to have finally come to an end. Well…not according to the District Court (LG) of Frankfurt.[4] On 7 October 2020, the District Court rendered a press release in which the court confirmed its jurisdiction due to the invalidity of the arbitration clause contained in the contracts between two beach volleyball players and the German Volleyball Federation[5] (“DVV”) – but one step at a time. More...

International and European Sports Law – Monthly Report – September - October 2020 - By Rhys Lenarduzzi


The Headlines


Human rights and sport  

Caster Semenya

Human rights issues are taking the headlines in the sporting world at present. A short time ago, Caster Semenya’s appeal at the Swiss Federal Tribunal against the CAS decision was dismissed, perhaps raising more questions than answering them. Within the last few days however, the message from the Semenya camp has been that this is not over (see here).  See the contributions from a range of authors at Asser International Sports Law Blog for a comprehensive analysis of the Semenya case(s) to date.

Navid Afkari

As the sporting world heard of the execution of Iranian Wrestler Navid Afkari, a multitude of legal and ethical questions bubbled to the surface. Not least of all and not a new question: what is the responsibility of sport and the governing bodies therein, in the space of human rights?  And, if an athlete is to acquire a high profile through sporting excellence, does that render athletes vulnerable to be made an example of and therefore in need of greater protection than is currently afforded to them? There are differing views on how to proceed. Consider the following from the World Players Association (Navid Afkari: How sport must respond) and that from the IOC (IOC Statement on the execution of wrestler Navid Afkari) which shows no indication through this press releases and other commentary, of undertaking the measures demanded by World Players Association and other socially active organisations. (See also, Benjamin Weinthal - Olympics refuses to discuss Iranian regime’s murder of wrestler).

Yelena Leuchanka

As this is written and relevant to the above, Yelena Leuchanka is behind bars for her participation in protests, resulting in several sporting bodies calling for her immediate release and for reform in the sporting world around how it ought to deal with these issues. As a member of the “Belarus women's national basketball team, a former player at several WNBA clubs in the United States and a two-time Olympian”, Leuchanka has quite the profile and it is alleged that she is being made an example of. (see here)

Uighur Muslims and Beijing Winter Olympics

British Foreign Secretary, Dominic Raab does not rule out Winter Olympics boycott over Uighur Muslims. ‘The foreign secretary said it was his "instinct to separate sport from diplomacy and politics" but that there "comes a point where that might not be possible".’ Though Raab’s comments are fresh, this issue is shaping as a “watch this space” scenario, as other governments might echo a similar sentiment as a result of mounting pressure from human rights activist groups and similar, in lead up to the Winter Games. More...



The Specificity of Sport - Comparing the Case-Law of the European Court of Justice and of the Court of Arbitration for Sport - Part 2 - By Stefano Bastianon

Editor’s note: Stefano Bastianon is Associate Professor in EU Law and EU sports law at the University of Bergamo and lawyer admitted to the Busto Arsizio bar.


1. EU law and the CAS case-law

Bearing in mind these questions, it is possible to affirm that under EU law, the specificity of sport

i) refers to the inherent characteristics of sport that set it apart from other economic and social activities and which have to be taken into account in assessing the compatibility of sporting rules with EU law; and

ii) under EU law these inherent characteristics of sport must be  considered on a case by case  basis, per the Wouters test as developed by the ECJ in the Meca Medina ruling.

Both aspects can be found in the CAS case-law too, although the CAS case-law shows some remarkable differences and peculiarities. From a general point of view, the application of the principle of specificity of sport in the CAS case-law represents an aspect of the more general issue related to the application of EU law by the CAS. However, the purpose of this paper is not to fully examine if and to what extent the CAS arbitrators apply EU law rules on free movement and competition; rather, the aim is to analyse the way the CAS deals with the concept of the specificity of sport, highlighting similarities and differences compared to the ECJ.

Taking for granted that ‘a CAS panel is not only allowed, but also obliged to deal with the issues involving the application of [EU] law’,[1] as far as the compatibility of sporting rules with EU law is concerned the CAS case-law shows different degrees of engagement. For instance, in the ENIC award concerning the so-called UEFA integrity rule, the CAS panel went through a complete competition-law analysis in perfect harmony with the Wouters et al. ruling by the ECJ.[2] On the contrary, in the above-quoted Mutu case, the issue of compatibility of the FIFA’s transfer regulations with EU competition law was analysed in a rather simple way, merely stating that the FIFA rules at stake were not anti-competitive under EU competition law without giving any reason to support this conclusion. More recently, in the Galatasaray and Milan A.C. awards, concerning the UEFA’s financial fair-play regulations, the CAS  applied a detailed analysis of EU competition law. However, in both cases, according to the CAS the proportionate character of sanctions listed in the UEFA’s financial fair-play regulations cannot affect the evaluation of the legitimacy of these regulations under Art. 101 TFEU. This conclusion represents a clear breaking point with respect to the ECJ case-law, according to which the evaluation of the restrictive effects of a rule necessarily presupposes the analysis of the proportionate character of the sanction imposed in the event of a violation of that rule as well.[3]   In regard to EU free movement, the CAS case-law tends to be less analytical in terms of the principle of proportionality. For instance, in the RFC Seraing award  which concerned both EU free movement and competition law, the CAS panel mainly focused on the legitimate objectives of the contested rule (FIFA’s ban on Third-Party Ownership – TPO), merely affirming that the restrictive measures under EU free movement were justified and inherent in the pursuit of those objectives.More...



The Specificity of Sport - Comparing the Case-Law of the European Court of Justice and of the Court of Arbitration for Sport - Part 1 - By Stefano Bastianon

Editor’s note: Stefano Bastianon is Associate Professor in EU Law and EU sports law at the University of Bergamo and lawyer admitted to the Busto Arsizio bar.*

 

1. Introduction.

The so-called specificity of sport represents one of the most debated, if not the most debated, but still undefined issue under European Union (EU) law. A noteworthy peculiarity is that the specificity of sport is frequently mentioned in several legislative and political documents issued by EU institutions, however it is not expressly referred to in any judgment by the European Court of Justice (ECJ).Conversely, the Court of Arbitration for Sport (CAS) case-law on Art. 17 of FIFA Regulations on status and transfer of players (RSTP) has repeatedly and expressly referred to the specificity of sport.[1] Apparently, the concept of specificity of sport has different meanings and purposes in the ECJ and CAS jurisprudence. In this blog (divided in two parts), I will try to analyse those two different meanings and to what extent the CAS case-law is consistent with the concept of specificity of sport as elaborated under EU law. More...

SFT rejects Semenya appeal: nothing changes - By Andy Brown

Editor's note: Andy Brown is a freelance journalist who has been writing about the governance of sport for over 15 years. He is the editor of The Sports Integrity Initiative where this blog appeared first.


For the last three days, I have been struggling with what to write regarding the Swiss Federal Tribunal’s (SFT) Decision to dismiss a challenge from Caster Semenya and Athletics South Africa (ASA) against the Court of Arbitration for Sport’s (CAS) Decision to dismiss a challenge to the Eligibility Regulations for the Female Classification (Athletes with Differences of Sex Development), otherwise known as the DSD Regulations. From reading World Athletics’ statement welcoming the ruling, one could be forgiven for thinking that it had won a major trial. Sports journalists, accustomed to covering events now curtailed by Covid-19, focus on the fact that Semenya has ‘lost’ her case against the DSD Regulations. Neither assertion is strictly accurate.

The SFT’s powers to review the CAS’s ruling are severely limited. It can only consider whether the CAS Decision violates ‘widely recognised principles of public order’ on Swiss public policy grounds. The SFT has only reversed a decision based on a a violation of Swiss public policy once in 30 years.

The SFT didn’t reconsider the evidence put forward to the CAS. ‘For there to be incompatibility with public policy, it is not enough that the evidence has been poorly assessed, that a finding of fact is manifestly false or that a rule of law has been clearly violated’, its Decision reads. ‘The only question to be resolved is in fact whether or not the verdict of the CAS renders the referred award incompatible with substantive public policy’. 

There were questions about whether the appeal from Semenya and ASA qualified to be reviewed by the SFT in the first place. World Athletics is a private organisation headquartered in Monaco, and the SFT was troubled as to whether such a complaint brought by a South African athlete against an overseas private organisation is capable of violating Swiss public policy.

‘It is doubtful whether the prohibition of discriminatory measures falls within the scope of the restrictive concept of public order when the discrimination is committed by a private person and occurs in relations between individuals’, the Decision quotes from its pervious 29 July 2019 Decision, which refused the ASA’s request to provisionally suspend the application of the DSD Regulations. ‘In any event, there is no need to examine this question further here since […] the award under appeal does not in any way establish discrimination which would be contrary to public order’

The SFT ruled that the CAS was correct to uphold conditions of participation for 46 XY DSD athletes in order to guarantee fair competition for certain disciplines in female athletics. In doing so, the SFT was ruling on whether the decision taken by the CAS violates public policy, based only on the complaints brought forward by Semenya and ASA. 

Semenya and the ASA had challenged the CAS Decision based around the idea that the DSD Regulations are discriminatory. The CAS held that they are discriminatory, but agreed with the IAAF (as World Athletics was then named) that such discrimination was necessary to protect its female category. The SFT ruled that even if the discriminatory rules of a private organisation such as the IAAF were considered able to pose a threat to public order, Semenya and the ASA had failed to demonstrate that the CAS Decision was so egregious that it posed such a threat.

‘Caster Semenya essentially alleges a violation of the prohibition of discrimination’, reads the Swiss Federal Supreme Court statement. ‘The CAS has issued a binding decision based on the unanimous opinion of the experts who were consulted that testosterone is the main factor for the different performance levels of the sexes in athletics; according to the CAS, women with the “46 XY DSD” gene variant have a testosterone level comparable to men, which gives them an insurmountable competitive advantage and enables them to beat female athletes without the “46 XY DSD” variant. Based on these findings, the CAS decision cannot be challenged. Fairness in sport is a legitimate concern and forms a central principle of sporting competition. It is one of the pillars on which competition is based. The European Court of Human Rights also attaches particular importance to the aspect of fair competition. In addition to this significant public interest, the CAS rightly considered the other relevant interests, namely the private interests of the female athletes running in the “women” category.’

Such strong support for the principle behind its DSD Regulations was rightly welcomed by World Athletics. Its statement asserted that the SFT ‘acknowledged that innate characteristics can distort the fairness of competitions’. I would argue that the SFT ruling didn’t do this, but rather found that a CAS Decision asserting this didn’t violate Swiss public policy. Semantics, perhaps.

Likewise, when World Athletics quotes the SFT Decision as confirming that ‘It is above all up to the sports federations to determine to what extent a particular physical advantage is likely to distort competition and, if necessary, to introduce legally admissible eligibility rules to remedy this state of affairs’, it is paraphrasing two texts quoted in the SFT Decision. The first is ‘La qualification juridique des rules autonomes des organizations sportive’ by Jérôme Jaquier, 2004. ‘Inborn characteristics specific to athletes in a particular group can also distort the fairness of competition’, the SFT Decision quotes from Jaquier. ‘When they enact regulations, the objective of sports federations is to ensure fair and equitable competition’.

The context of the second quote, from ‘Sportrecht – Berücksichtigung der Interessen des Sports in der Rechtsordnung’ by Martin Kaiser, 2011, is even more interesting. It is preceded with a statement from the Swiss Federal Supreme Court, which reads: ‘It is not for the Federal Court to make, abstractly, comparisons between the disciplines to assess whether a particular athlete has an advantage that makes sporting competition meaningless’

‘It is above all for the sporting federations to determine to what extent a particular physical advantage is liable to distort competition’, the SFT Decision quotes from Kaiser. ‘And, if so, to establish legally admissible eligibility rules to remedy this state of affairs’. 

Again, such details might be considered as semantics. But – I would argue – important semantics. Reading the media maelstrom that has resulted from the SFT Decision, one could be forgiven for assuming that Semenya has lost her case, and has no chance of ever defending her 800m title. However, a statement issued by her lawyers reveals that she intends to challenge the ruling in European and domestic courts.

“I am very disappointed by this ruling, but refuse to let World Athletics drug me or stop me from being who I am”, the statement continues. “Excluding female athletes or endangering our health solely because of our natural abilities puts World Athletics on the wrong side of history. I will continue to fight for the human rights of female athletes, both on the track and off the track, until we can all run free the way we were born. I know what is right and will do all I can to protect basic human rights, for young girls everywhere.” More...



The Semenya Decision of the Swiss Federal Tribunal: Human Rights on the Bench - By Faraz Shahlaei

Editor's note: Faraz Shahlaei is a JSD Candidate at Loyola Law School, Los Angeles. His research and teaching interests are public international law, international sports law, international human rights and dispute resolution.

 

The issue of international human rights was a central contention in Caster Semenya case ever since the start of her legal battle against the regulations of the IAAF. However, the human rights arguments were poorly considered in the two proceedings related to this case. To put it in perspective, it is like having a key player nailed to the bench throughout the whole game; no coach ever tried to give it a chance while it had the potential to be the game changer for all parties.

In 2019, the Human Rights Council, the inter-governmental human rights body of the UN, expressed concern over issues of discrimination in sports in particular regarding IAAF female classification regulations. In June 2020, the United Nations High Commissioner for Human Rights submitted a report to the United Nations Human Rights Council on the “Intersection of Race and Gender Discrimination in Sport”. The report draws a detailed picture of how human rights in the Semenya case have been violated and also elaborates on the inherent problem of addressing human rights issues in alternative dispute resolution mechanisms favored by the sport governing bodies. However, despite an in-depth discussion of Caster Semenya’s case at both the CAS and then the SFT, the question of human rights, a key concern and a fundamental pillar of the case, hasn’t been adequately answered yet! More...


The SFT’s Semenya Decision under European human rights standards: Conflicting considerations and why a recourse could be successful at Strasbourg - By Kevin Gerenni

Editor's note: Kevin Gerenni is Assistant Professor in Public International Law (Facultad de Derecho de la Universidad de Buenos Aires) and LLM Candidate 2021 in Public International Law at the London School of Economics.


Even though the decision rendered by the SFT in the Semenya Case was foreseeable, the Tribunal did put forward some concerning reasoning in terms of public policy (“ordre public”) and human rights. In case Semenya decides to challenge the Swiss state before the ECtHR, one can expect the case to shake some grounds at the ECtHR, which would be faced with the question of the application to sport not of fair trial guarantees (as in Mutu & Pechstein) but of substantial human rights provisions such as the prohibition of discrimination on the basis of sex (Article 14 ECHR) and the right to private life (Article 8 ECHR).

Under Swiss law, the reasons that may lead to the annulment of an arbitral award are enumerated in art. 190 of the Swiss Private International Law Act (PILA). Semenya’s strongest case relied on art. 190(2)(e): the award’s incompatibility with public policy. Naturally, this point concentrated most of the SFT’s attention. In order to analyze the compatibility of the CAS award with Swiss public policy, the SFT focused on three main potential breaches of human rights: prohibition of discrimination, personality rights, and human dignity. In doing so, it put forward certain observations that differ with European human rights standards and the ECtHR’s jurisprudence. The purpose of this short article is to analyze those discrepancies and, consequently, Semenya’s prospects of success before the Strasbourg Tribunal.More...


Selected procedural issues –and questions– arising out the Caster Semenya Judgment of the Swiss Federal Tribunal - By Despina Mavromati

Editor's note: Dr Despina Mavromati is an attorney specializing in international sports law and arbitration (Sportlegis Lausanne) and a UEFA Appeals Body Member. She teaches sports arbitration and sports contracts at the University of Lausanne, Switzerland

 

As the title indicates, this short note only deals with selected procedural issues and questions arising out of the very lengthy Semenya Judgment. In a nutshell, the SFT dismissed Semenya’s appeal to set aside the CAS Award, which had denied the request of Caster Semenya (Semenya, the Athlete) to declare unlawful the Differences of Sex Development (DSD) Regulations of World Athletics (formerly IAAF).[1]

At the outset, it has to be reminded that the CAS Award dealt with the merits of the Semenya case in a final and binding way by rendering an arbitral award according to Article R59 of the CAS Code (and Article 190 of the Swiss Private International Law Act – PILA). Therefore, the SFT did not act as an appellate court but rather as a cassatory court, entitled to review only whether the exhaustively enumerated grounds for annulment set out in Article 190 (2) PILA were met (and provided that they were properly invoked and substantiated in the motion to set aside said award).More...

Caster Semenya Case Exposes Design Flaws in International Sports Governance - By Roger Pielke Jr.

Editor's note: Roger Pielke Jr. is a professor at the University of Colorado Boulder

 

The decision this week by the Swiss Federal Tribunal not to revisit the arbitral decision of the Court of Arbitration for Sport (CAS) in the case of Caster Semenya was not unexpected, but it does help to expose a major design flaw in international sports governance. Specifically, the institutions that collectively comprise, create and enforce “sports law” appear incapable of addressing flawed science and violations of basic principles of medical ethics.

While different people will have different, and legitimate, views on how male-female competition classifications might be regulated, the issues highlighted involving science and ethics are not subjective, and are empirically undeniable. In normal systems of jurisprudence, procedures are in place to right such wrongs, but in sports governance processes in place prevent such course corrections. And that is a problem.

The empirical flaws in the science underpinning the IAAF (now World Athletics) Semenya regulations are by now well understood, and have been accepted by WA in print and before CAS (I was an expert witness for Semenya, and was present when IAAF accepted responsibility for the flawed research). You can read all the details here and in the CAS Semenya decision. I won’t rehash the flawed science here, but the errors are fatal to the research and obvious to see.

One key part of the comprehensive institutional failures here is that the journal which originally published the flawed IAAF research (the British Journal of Sports Medicine, BJSM) has, inexplicably, acted to protect that work from scrutiny, correction and retraction. Normally in the scientific community, when errors of this magnitude are found, the research is retracted. In this case, the BJSM refused to retract the paper, to require its authors to share their data or to publish a critique of the IAAF analysis. Instead, upon learning of the major errors, the BJSM published a rushed, non-peer reviewed letter by IAAF seeking to cover-up the errors. All of this is non-standard, and a scandal in its own right.

The violation of basic principles of medical ethics required by the implementation of the WA Semenya regulations is also not contested. Both WA and the IOC have claimed to uphold the World Medical Association’s Helsinki Declaration on medical and research ethics. Yet, the WMA has openly criticized the WA regulations as unethical and asked doctors not to implement them. In response, WA has stated that it will help athletes who wish to follow the regulations to identify doctors willing to ignore medical ethics guidelines.

Flawed science and ethical violations are obviously issues that go far beyond the case of Caster Semenya, and far beyond sport. In any normal system of jurisprudence such issues would prove readily fatal to regulatory action, either in the first instance of proposed implementation or via review and reconsideration.

Sport governance lacks such processes. At CAS, the panel claimed that matters of scientific integrity and medical ethics were outside their remit. The SFT is allowed to reconsider a CAS decision only on narrow procedural grounds, and thus also cannot consider matters of scientific integrity or medical ethics. So far then, the flaws in the WA regulations – sitting in plain sight and obvious to anyone who looks, have not been correctable.

This leaves the world of sport governance in a compromised position. Some may look past the scientific and ethical issues here, perhaps judging that barring Semenya from sport is far more important that correcting such wrongs. 

Regardless of one’s views on sex and gender classification in sport, the WA regulations and the processes that produced and have challenged them reveal that sports governance has not yet entered the 21st century. Science and ethics matter, and they should matter in sport jurisprudence as well.  It is time to correct this basic design flaw in international sport governance.

Asser International Sports Law Blog | The Impact of the new FIFA Regulations for Intermediaries: A comparative analysis of Brazil, Spain and England. By Luis Torres

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

The Impact of the new FIFA Regulations for Intermediaries: A comparative analysis of Brazil, Spain and England. By Luis Torres

INTRODUCTION

Almost a year after their announcement, the new FIFA Regulations on working with Intermediaries (“FIFA Regulations”) came into force on 1 April 2015. Their purpose is to create a more simple and transparent system of regulation of football agents. It should be noted, however, that the new FIFA rules enable every national football association to regulate their own system on players’ intermediaries, provided they respect the compulsory minimum requirements adopted. In an industry that is already cutthroat, it thus remains to be seen whether FIFA’s “deregulation” indeed creates transparency, or whether it is a Pandora’s Box to future regulatory confusion.

This blog post will provide an overview of the new FIFA Regulations on working with intermediaries and especially its minimum requirements. Provided that national associations are encouraged to “draw up regulations that shall incorporate the principles established in these provisions”[1], three different national regulations have been taken as case-studies: the English FA Regulations, the Spanish RFEF Regulations and the Brazilian CBF Regulations. After mapping their main points of convergence and principal differences, the issues that could arise from these regulatory differences shall be analyzed.  


FIFA REGULATIONS ON WORKING WITH INTERMEDIARIES

The objective of the new Regulations, as explained in a blog dated from 3 July 2014, is no longer to regulate access to the activity of players’ agents (now ‘intermediaries’), but to provide a framework for a better control of the activity itself by establishing minimum standards and requirements and by installing a transparent registration system.[2]

The most significant change is that FIFA introduced a provision recommending to cap the maximum remuneration an intermediaries should derive from an individual transfer. Article 7(3) holds that the maximum commission payable to an intermediary should be 3% of the player’s basic gross income (regarding an employment contract) or 3% of an eventual transfer fee (transfer agreement). Additionally, FIFA prohibits any payment when the player concerned is a minor. These two restrictions have triggered a complaint of the AFA (UK Association of Football Agents) before the European Commission. Moreover, in Germany, the company Rogon Sport Management challenged the new DFB regulations for intermediaries and won a partial victory in a preliminary ruling of the Regional Court of Frankfurt.[3] They argue that these regulations could lead to an infringement of the competition law. This issue will be developed in a different blog post later this week.

Another minimum requirement set by FIFA is the obligation for all intermediaries to submit an Intermediary Declaration (Annex 1 and 2 FIFA Regulations) to the relevant association. This is due each time an individual or a company wishes to be registered as an intermediary with a national association, and also in order to register a transaction in which he acts on behalf of a player or a club. By signing the Declaration, the intermediary is supposed to be bound to the FIFA Regulations, in addition to the regulations of every confederation and association to which he is contractually related.

Furthermore it is stipulated that legal persons can also be considered ‘intermediaries’ under the new Regulations.[4] However, they do not provide any criteria defining how the national associations are required to register the legal persons acting as intermediaries.

The FIFA Regulations prohibit any payment to the intermediary in connection with a transfer compensation (other than the commission established in the Article 7(3)), training compensation and solidarity contributions. Moreover, in accordance with provision 7(4) of the FIFA Regulations, no compensation can be based on the future transfer value of a player.

Another compulsory prerequisite at stake is that the intermediary ought to be registered with the association where he desires to provide his services prior to initiate any activity (Article 3(1) FIFA Regulations). As will be highlighted below, this provision has important practical consequences. Finally, FIFA no longer claims jurisdiction over disputes that could arise between intermediaries and their clients or other intermediaries. It entrusted the national associations to deal with these kind of disputes. The national associations shall establish proper dispute resolution mechanisms to hear these disputes.   


NATIONAL REGULATIONS ON WORKING WITH INTERMEDIARIES

With the objective of analysing how the different associations have implemented the new intermediaries’ system, three different national regulations will be compared: The FA Regulations on Working with Intermediaries, the RFEF (Spain) Regulations and the CBF (Brazil) Regulations. 


1. The FA (England)

The FA was the first association to publish new provisions regulating intermediaries (”FA Regulations”). It should be pointed out that the new FA Regulations are to a large extent similar to the former FA Agents Regulations. For example, the assignment or subcontracting services or duties, the definition of interest, the dual representation standards and the payment to the intermediary by the club on the player’s behalf as a taxable benefit were already included in the former FA Agents Regulations. 

Nevertheless, it is surprising that the FA Regulations do not require the intermediary to submit an Intermediary Declaration, even though it is a mandatory requirement imposed by the FIFA regulations. As stated above, national associations, such as the FA, are required to implement and enforce these minimum standards/requirements. It is not excluded that FIFA, based on Article 10 FIFA Regulations, will “take appropriate measures if the relevant principles are not complied with”.

The FA prescribes that all intermediaries are to undertake the so-called ‘Test of Good Character and Reputation for Intermediaries’. By undertaking this ‘Test’, the intermediary is asked to demonstrate his impeccable reputation and declares that he has not been convicted for any offence related to his services as an intermediary.

The individual who wishes to register himself as intermediary with the FA will have to pay a registration fee of £500 (around 690 €) for the first registration. However, this fee is waived to those who were already ‘FA Registered Agents’ on 31 March 2015. Instead, in order to remain registered as an intermediary, an annual renewal fee of £250 (around 345 €) will de be due.

Additionally, if the intermediary wishes to act on behalf of minors, he must obtain a specific authorisation from the FA. He will need to provide the FA with the ‘Disclosure and Barring Service check’ (CRB check), which enables in the UK to make better informed recruitment decisions by identifying candidates who may be unsuitable for certain work, especially involving children, or an equivalent for non-English intermediaries. Moreover, regulation B8 FA Regulations prohibits any approach to, or enter into an agreement with, a player before the start of the calendar year in which he turns 16.

Out of the three national associations analysed, the FA is the only association that has provisions regarding the existing representation contracts lodged with the FA before 1 April 2015. These contracts have to be resubmitted to the FA within 10 days of the intermediary registering with the FA.

For the purpose of the representation contracts between a player and an intermediary the maximum length will be two years (regulation B10).

With respect to legal persons, the FA Regulations impose the obligation to register the company/partnership by an individual already registered as an intermediary. Moreover, any individual carrying out intermediary activities on behalf of a legal person must be registered as well.[5]  

Lastly, the FA adopted the same wording as FIFA in relation to the 3% recommendation (C11 FA Regulations). However, the English football association also published a statement (‘Intermediaries Guidance Notes’) indicating that this ‘recommendation’ is non-binding and that clubs and players are free to remunerate intermediaries as they wish. It is clear that this provision could generate doubts regarding the amount of the compensation that the intermediary is entitled to. In fact, the 3% recommendation is significantly lower than the 5-10% commission rates that licensed agents tended to receive[6]. However, with this statement, the FA is not precluding an intermediary and his client to agree on a percentage higher than 3%.

2. RFEF (Spain)

As far as the RFEF (Spanish association) Regulations on working with Intermediaries (“RFEF Regulations”) are concerned, they are the most in line with the FIFA Regulations as compared to the FA and CBF Regulations. The Intermediary Declarations are attached as Annex 1 and 2 at the end of the Regulations.  The registration fee for the first registration as an intermediary in Spain is 861 €. Registration has to be renewed on a yearly basis. However, it is yet unknown what the exact costs will be for renewing the registration. Similar to the FA’s ‘Test of Good Character and Reputation’, the RFEF provides a ‘Code of Ethics’ (Annex 3), which has to be signed by the applicant. Furthermore, the maximum length of a representation contract between a player or a club and an intermediary is two years.[7] Although the maximum length of contracts in England is also two years, it should be kept in mind that the FA Regulations only refer to contracts between intermediaries and players, not between intermediaries and clubs.

The most controversial aspect of the Spanish Regulations is the way that the Registration Procedure (Article 4) is designed. The steps for becoming a RFEF Intermediary are summarized as follows:

  1. The potential intermediary has to provide a written request addressed to the RFEF General Secretariat (“Secretaría General”).

  2. After the application is declared admissible, the RFEF will grant the individual the status of “Applicant”. Subsequently, the RFEF will convoke the applicant for an interview and decides whether the Applicant is ‘suitable to advice’ clients on the football market.   

  3. If the outcome of the interview is positive, the Applicant must provide the following documents: ID, VAT number (for legal persons), two pictures, CV, Intermediary Declaration, the payment of the Registration Fee, return the former agent license (if any) and the Code of Ethics. 

Another interesting point is that the Spanish Regulations do not provide any information on the intermediary’s remuneration. Bearing in mind that FIFA recommends the remuneration to be 3%, it will be interesting to see the consequences of the RFEF’s decision to disregard this recommendation.

This could be understood as an implicit challenge to the ‘3% recommendation’. In practice, this omission has similar consequences than the solution adopted by the English FA. In short, FIFA’s recommendation is treated as a soft advise rather than a binding legal standard.


3. CBF (Brazil)

The CBF (Brazilian association) Regulations on Working with Intermediaries (“CBF Regulations”), were approved on 24 April 2015. In order to be registered as an intermediary, the individual must provide the Intermediary Declaration attached in Annexes 1 and 2 to the Regulations. The registration fee has not been published yet. The applicant should also deliver a declaration stating that he has neither conflicts of interest nor a criminal record. Moreover, the potential CBF intermediary is required to take out a professional liability insurance for the amount of 200,000 ‘reais’ (around 60,000 €). Thus, the CBF, taking advantage of its right to ‘go beyond’ the minimum requirements imposed by FIFA, has introduced a feature of the former Agents Regulations that the new FIFA Regulations had abandoned, i.e. the professional liability insurance.[8]

Following the line of the FA and the RFEF, the Representation Contract shall not last more than “24 months” (Article 11(3)). Given that the Regulations do not state whether it refers to contracts with players or clubs, it can be inferred that all parties are subject to this restriction. On the other hand, the CBF prohibits in article 11(2) to extend the Representation Contract tacitly, a renewal in writing is necessary.

The remuneration of the intermediary is regulated in the same way as in the FIFA Regulations, except for one detail concerning the transfer fee: in Brazil, the remuneration, which should not exceed 3%, amount must be calculated on the basis of the “possible basic gross income for the entire duration of the relevant employment contract” (article 19.III), instead of a share of the transfer fee as envisaged by the FIFA, RFEF or FA Regulations.

Finally, Article 4 expands the scope of application of these regulations to ‘international activities’, specifically “operations regarding the negotiation of an employment contract or players’ transfer which have effect in a different national association”. By means of this Article, an operation which takes place out of the CBF jurisdiction has to be registered by the ‘CBF Intermediary’ with the CBF. As a consequence, the CBF Intermediary must register the operation with two federations: first, the national association where the operation takes place, and second, the CBF, where the only connection is the intermediary. 


Table providing an overview of the main requirements stipulated by the FIFA, FA, RFEF and CBF Regulations

 

FIFA

FA

RFEF

CBF

Intermediary Declaration

Yes

No

Yes

Yes

 

Test of Good Character (or similar)

No

Yes

Test of Good Character and Reputation for Intermediaries (FA form)

Yes

Code of ethics (Annex 3)

No

 

Registration Fee

No

Yes

-£500 (690 €)

-£250 (345 €): the following renewals

Yes

-861 €: 1st year

-Could change the following years

 

-unknown-

Interview and other additional documents

No

Yes

‘Declarations, Acknowledgments and Consents’ Form

Yes

Written request, Interview, 2 photos, CV.

Yes

Criminal record, copy professional liability insurance.

Maximum years Representation Contract with Player

No

Yes

2 years

Yes

2 years

Yes

2 years

3% remuneration recommendation

Yes

Yes

No

Yes, but on the future wage of the player


 CONCLUSION

The mandatory registration requirement for intermediaries with the relevant national association, as stipulated by the FIFA Regulations, the FA Regulations, the RFEF regulations and the CBF Regulations, leave room for a wealth of legal uncertainties that will need to be clarified by football’s governing bodies and the various courts (and also the EU Commission) called to pronounce themselves on those regulations.  Specifically, should an intermediary register himself with every single association where he is supposed to act on behalf of his clients? What would happen if on 31 August (summer transfer window deadline) a Spanish club calls him to sign one of his players and he is not registered in Spain as an intermediary?

Furthermore, every association has a registration fee to satisfy prior to the registration of around 500 €. Taking into account the international dimension of football and its transfer market, it could well be necessary for an intermediary to register himself with a dozen of associations simply to carry out his profession effectively. As a result, he would have to spend roughly 6.000 € in registration fees on a yearly basis.  

Subsequently, this could lead to an increase of the number of corporations, which provide intermediary services. Indeed, the recourse to a transnational agency employing a number of intermediaries registered with different national associations would be a very efficient way to tackle this problem. Thus, at medium long-term, at least at the international level, the new system will probably not generate the chaos that some authors are predicting. In fact, rather than opening the market to everyone, these requirements could well be a barrier of entry for many intermediaries and might trigger a consolidation of the market in a smaller number of bigger players. This has bad sides, less competition, and good sides, more sophisticated players more likely to provide quality services and to care about their long-term reputation. In short, we predict that only the main ‘cowboys’ in the ‘wild west’ will be able to play by the new rules of the game for football intermediaries.



[1] Nick de Marco, “The new FA Intermediaries Regulations & disputes likely to arise”, available at lawinsport.com, 31 March 2015.

[2] Daniel Lowen, ‘A Guide To The FA’s Regulations on Working with Intermediaries’ www.lawinsport.com, 17 February 2015.

[3] Handelsblatt, “Gericht gibt Spielervermittler teils recht”, 30 April 2015.

[4] See FIFA Regulations on Working with intermediaries: Definition of an intermediary, page 4

[5] Appendix II FA Regulations

[6] UEFA ‘Club Licensing Benchmarking Report 2012’, page 54. http://www.uefa.org/MultimediaFiles/Download/Tech/uefaorg/General/02/09/18/26/2091826_DOWNLOAD.pdf

[7] Article 8(4) RFEF Regulations

[8] Article 5(e) CBF Regulations

Comments (2) -

  • Marc Peltier

    5/11/2015 4:03:54 PM |

    Interesting article on the new rules. In France, we have a national legislation which is different from FIFA rules. You still have to pass an exam to get a license in order to be authorized to work as an agent.
    Marc Peltier
    Associate professor
    University of Nice Sophia-Antipolis

  • Gerald Ibeh.

    2/28/2017 10:48:30 AM |

    please how much is required to register a company to act as intermediary in Netherland,Germany,Italy,france,portugal & England.if possible i need a breakdown & requirements of registering a company to act as intermediary in all Uefa member associations.

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