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FIFA Clearing House: New Regulations to Promote Financial Transparency and Integrity in International Transfers


The latest version of the new FIFA Clearing House Regulations It represents a radical change in solidarity gathering processes and training mechanisms. [1]

This new regulation implements the FIFA Clearing House with the aim of centralizing, processing and automating payments between clubs in respect of training fees, promoting transparency and financial integrity and preventing fraudulent behavior in the transfer system.

As announced by FIFA, the project is supported by a large number of stakeholders, such as Loretta Lynch (former US Attorney General), Group of Countries Against Corruption (GRECO) of the Council of Europe and the Report of the European Parliament on the sports policy of the European Union. [2] [3]

The origin of the cleaning house

The Solidarity Mechanism and Training Allowance (set out in Articles 20 and 21 and Annexes 4 and 5 of the FIFA Regulations on the Status and Transfer of Players) aim to encourage the development of young players and ensure that clubs spend time. And the effort and money to develop new talent is rewarded if any of these players succeed in their careers.

Since its introduction in 2001, the sad fact is that FIFA’s goal has not been achieved, mainly because most of the money does not reach its recipients.

So much so that out of the $400 million that must be distributed to coaching clubs each year, FIFA has calculated that only about $70-80 million reaches the rightful recipients. [4]


Faced with this situation where clubs do not voluntarily pay for both coaching mechanisms, coaching clubs have historically had to initiate formal complaint procedures with the FIFA Dispute Resolution Chamber, governed by Articles 27 and 28 of the Court of Football’s Bylaws.

Fortunately for clubs, this grievance procedure will become historic with the recent entry into force of the Clearing House, which was set up, in FIFA’s words, to: Transfers with the aim of protecting the integrity of football and preventing fraudulent behaviour.

The goal is for the clearinghouse to centralize and process all payments associated with player transfers, including not only payment for the transfers themselves, but also mechanisms for solidarity, training and agent commissions, thus promoting financial transparency and international fairness. transportation system.

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definitions

Before explaining in detail how a clearinghouse works, it is necessary to explain some of the concepts governed by the Regulation.

First, the so-called waiver order The document issued by the FIFA General Secretariat to the FIFA Clearing House providing it with the information necessary to process payments, in particular the payers and recipients of payments and the amounts to be distributed.

Secondly, the so-called “conformity assessment” It is the procedure that the FIFA Clearing House must implement before accepting any potential client, in order to comply with financial regulatory requirements.

Finally, the “Passport Electronic Sports” (“PPE”) It is the electronic document that contains information collected about a player’s membership throughout his career, including the association he belongs to, his status (amateur or professional), type of membership (permanent or loan) and/and the club (including training category) he is registered with. since the calendar year in which he turned 12.

Define and scope of application

The Clearinghouse is an independent entity of FIFA (headquartered in Paris) operating under a license from the French Banking Supervisory Authority (ACPR).

The ACPR license allows the FIFA Clearing House to receive and process payments on behalf of clubs pursuant to European Payment Services Directive (PSD2).

Calculation and payment of training compensation

The clearinghouse will act as an intermediary, taking 5% of the target club and then distributing it to all of the player’s training clubs.

The procedure will be simplified as follows:

Or not. Integration between national systems and FIFA. Clubs must ensure that all their players are properly registered with the association from the age of 12. In turn, member associations must link their national electronic systems to FIFA’s platforms (“FIFA Connect”).

according to. Electronic sports passport. When a workout compensation trigger is selected, TMS creates a temporary DPI for the player. All member associations and clubs will have ten days to review the temporary PPE in the TMS system from the time it was created (the inspection period).

At the end of the inspection period, the FIFA General Secretariat will assess the provisional PPE for accuracy and relevance.

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third. EPP review process. Once the inspection period has ended and after evaluation by the FIFA General Secretariat in accordance with Art. 8 of the Clearing-House Regulations, the FIFA General Secretariat will initiate the process of reviewing the EPP in the TMS and inviting parties (member associations, affiliate clubs and new clubs, among others) to participate. Like the screening process, the Employment Practices Policy review process will, with few exceptions, last 10 days.

If a training club considers that a waiver made by the new club in connection with a player’s enrollment in a training club is invalid, it may challenge the validity of the waiver by giving written notice to TMS.

Finally, the Employment Practices Policy review process ends when the Secretariat has sent it through the Quality Management System.

fourth. FIFA decision. Once the EPP review process is complete, the FIFA General Secretariat will assess any request to change registration data. At the end of the evaluation, the FIFA General Secretariat will decide which registration data should be included and amended in the final EPP.

TMS will automatically calculate award standings based on final PPE, including amounts to be distributed to training clubs.

Fifth. Pay for the training club. The FIFA General Secretariat will inform all participants of the recruitment practices policy and the allocation arrangement.

The obligated club will pay the bill to the FIFA Compensation Chamber, which will be responsible for distributing the amounts to the training clubs, and will in turn report the amounts paid and unpaid to FIFA, so that FIFA can monitor compliance or non-compliance and, if necessary, impose appropriate disciplinary sanctions.

Other related issues

How should unions be classified?

According to Article 4.6 of the Clearing House Rules: “Associate associations classify clubs according to the criteria established in the RETJ”. No other rating system will be recognized.”

According to Art. 4, paragraph 1, of Appendix 4 of Regulations for the Status and Transfer of Players (October 2022 Edition) [5] And according to Circular No. 1805 [6]The classification is made according to the financial investment of each club in training players.

In the event that the Federation fails to classify its affiliated clubs before the specified deadline, this may lead to administrative sanctions procedures under the European Union FIFA publication no. 1478 [7].

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Is it possible to appeal FIFA’s decision on PPE and the final award order?

Yes, this is possible. The notification is a final decision that can be appealed to the Civil Arbitration Court.

A timely appeal to the CAS will result in the legal effects of the PPE and the relevant arbitration order being suspended until the proceedings are completed.

What is the responsibility of the federations?

According to Article 4.8 of the Clearing House Rules: affiliate federations They are responsible of the registration information contained in the final PPE.”

In this regard, the Clearing House regulations are clear and can penalize affiliate associations that do not comply with the above regulations with a fine, in the event that accurate registration data is not submitted through the fault or negligence of the affiliate association, or due to the failure of either or both systems to integrate with the interface. FIFA Connect, resulting in the affiliate club wrongfully refusing training compensation, directing it to pay the affiliate club compensation in an amount equal to the training allowance that should have been paid.

An association will not be penalized if it can prove to the FIFA Disciplinary Committee that it has made every effort to provide accurate scoring data and that, despite its best efforts, has been unable to provide such data.

Mario San Roman

Attorney

[email protected]

Bibliography

[1] – FIFA Compensation Chamber Regulations (October 2022 Edition). Source: FIFA.com https://digitalhub.fifa.com/m/7c9e9c5185db9eb6/original/FIFA-Clearing-House-Regulations-October-2022-edition.pdf

[2] Council of Europe report: Transfer reform will ‘significantly’ improve football (GRECO). Source: FIFA.com https://www.fifa.com/legal/media-releases/council-of-europe-report-fifa-transfer-system-reform-to-significantly-improve-fo

[3] FIFA welcomes the European Parliament’s new report on sports policy. Source: FIFA.com https://www.fifa.com/legal/news/fifa-welcomes-new-european-pariffon-report-on-sport

[4] FIFA Compensation Centre. legal. Football organizer. Source: FIFA.com https://www.fifa.com/es/legal/football-regulatory/clearing-house

[5] Regulations for the Status and Transfer of Players October 2022 Edition. Source: FIFA.com https://digitalhub.fifa.com/m/620d0240c40944ed/original/Regulations-on-the-Status-and-Transfer-of-Players-October-2022-edition.pdf

[6] Circular No. 1805. Regulations Concerning the Status and Transfer of Players – Classification of Clubs and Registration Periods. Source: FIFA.com https://digitalhub.fifa.com/m/52c4ddbd3a08ce16/original/Circular-No-1805-Regulations-on-the-Status-and-Transfer-of-Players-categorisation-of-clubs-and-registration-periods. PDF

[7] Circular No. 1478. FIFA TMS Administrative Sanctions Procedure. Source: FIFA.com https://digitalhub.fifa.com/m/65af72473d25c31/original/xjevyv2xyo4o5lokmrfo-pdf.pdf

Queenie Bell

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