The new EU Regulation 2024/1624 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing has extended the scope of anti-money laundering measures also to football clubs and football agents.
The reasoning behind the regulation mentions that football is a globally popular sport with huge financial flows and international transactions, which opens up the possibility of money laundering, where illegally obtained money is disguised by legitimate financial transactions.
In the context of this regulation, professional football clubs (which have been granted a licence and participate in the national football leagues in a Member State and whose players and staff are professionals) and agents (i.e., persons who, for a fee, provide intermediary services and represent football players or professional football clubs in negotiations) will be considered as obliged entities and therefore have to implement anti-money laundering measures.
As far as football clubs are concerned, the following transactions will be subject to AML regulation (i) transactions with an investor; (ii) transactions with a sponsor; (iii) transactions with football agents or other intermediaries; (iv) transactions for the purpose of a football player’s transfer.
Football clubs and agents, as obliged entities, need to, among others:
- have in place internal policies, procedures and controls with respect to AML
- take appropriate measure to identify and assess the risks of money laundering and terrorist financing
- appoint one member of the management body who shall be responsible for ensuring AML compliance and a compliance officer
- apply customer due diligence measures (simplified, standard or enhanced, depending on the nature of risk) in certain specific circumstances, including when establishing a business relationship and when carrying out an occasional transaction of a value of at least EUR 10,000.
These measures include identifying the customer and the beneficial owners, running a sanction check of these entities, and conducting ongoing monitoring of the business relationship.
Where an obliged entity is unable to comply with the requirement to apply customer due diligence measures, it shall refrain from carrying out a transaction or establishing a business relationship, shall terminate the business relationship and consider reporting a suspicious transaction to the authorities. Obliged entities shall keep a record of the actions taken to comply with the requirement to apply customer due diligence measures.
The regulation distinguishes between elite clubs that compete in the top divisions of their national leagues and are at a higher risk of money laundering and clubs in lower divisions. Under certain conditions, Member States may decide to exempt professional football clubs in the top and/or lower divisions from the requirements of this regulation in whole or in part.
The Regulation is very complex and will require thorough preparation by the football clubs and agents. To ease the process, football agents and football clubs have almost five years to take the appropriate steps and prepare their internal policies, as the Regulation will come into effect for them on 10 July 2029.
Further, the Regulation states that obliged entities may, under certain conditions, outsource tasks resulting from this Regulation to service providers. The football clubs will now wait for the decision on the exemption which may be provided by Member States, which will further clarify the scope of their obligations under the Regulation.
