With the coming into force of the latest package of AML measures agreed upon in the provisional agreement between the EU Commission and Parliament, professional football clubs will find themselves subject persons of their country of residence’s AML laws.
But how does that go together, money laundering and Europe’s most famous sports? Isn’t that going a bit too far?
Here are some key facts on the situation as is:
- Professional football has an estimated worldwide net worth of around 600 billion Euros.
- Only in the FIFA 2015 corruption scandal, 150 million Euros were suspected of having been obtained from illicit sources or used for ill-gotten means.
- Several match-fixing and racketeering scandals rocked the European football world in the last years, i.e. in Germany and Italy.
- Since 2009, the FATF has warned that the mechanisms of professional football are likely to be abused for the purposes of money laundering.
- Many European countries consider match-fixing as an AML-related risk in their domestic AML legislation, such as the Netherlands, Spain or the United Kingdom.
What can football clubs expect:
- Member states will be given five years to implement the new ruleset into their domestic laws, i.e. before the laws must be applied to football clubs.
- Football clubs will then see themselves faced with obligations which are common to other industries on the spot of AML oversight, such as 1) due diligence obligations, e.g. source of wealth & funds-investigations, 2) documented AML risk management, 3) appointment of AML officers & 4) reporting of suspicious activities in relation to their businesses.
- The draft regulation is expected to contain an opening clause, allowing the member state to exclude clubs from the applicability of the AML legislation, in case of proven low risks.
So, all in all, the broadening of the scope of the EU’s harmonised AML legislation does look more like a long overdue and necessary step, rather than the hysterical political overreaction that it may have seemed, at first glance.
Further, an increased level of scrutiny, the identification of vulnerabilities and the implementation of risk mitigation strategies have led to positive impacts on brand reputation, company standing and business opportunities for uncounted enterprises in other business sectors.
Football clubs will now be given a term of up to five years to prepare for the new environment, develop and implement frameworks for ML prevention and risk mitigation, and get up to speed with AML obligations.
Want to discuss further regulatory developments in AML, CFT and professional sports, and how to stay current in an ever-evolving regulatory landscape? Get back to Chevron Group’s Lawrence Marchese (lawrence@chevron.group), Kurt Laferla (kurt@chevron.group) and Thees Buschmann (thees@chevron.group).
