Football clubs are a safe playing field for criminals and money launderers, finds report

November 5 – Club football is wide open to criminal ownership, money launderers, third party ownership groups and sports betting fraudsters, according to a report published last week.

The report titled ‘Legal, Financial and Integrity Aspects of Club Ownership in Football’

was the first phase of a global study jointly undertaken by the International Association of Lawyers (UIA) in partnership with the ICSS INSIGHT and the Sport Integrity Global Alliance (SIGA).

A team of lawyers from 25 countries found that only three countries have a dedicated body that has specific oversight of investment and ownership in its football clubs and only two nations are able to fully track and monitor the money behind club investments and ownership.

Key findings in the report are:

  • While 83% of countries have an obligation under national legislation to disclose club owners/investors’ identities, only the UK, Netherlands, Spain and Switzerland have some kind of structure/process with a role to monitor and control
  • Publically available information regarding full ownership and investment structures is only available in Belgium, the Ukraine and in the UK
  • Only five countries (Brazil, the UK, France, Portugal and the Ukraine) require by law the obligation to fully disclose club owners/investors in both professional and non-professional football clubs
  • 64% of countries require information on club ownership structure for only the professional top two level divisions
  • Where countries have disclosure obligations that apply to full ownership structure, the majority are not able to identify the ultimate beneficial owner of the club. Only 39% of the countries monitoring club ownership are able to track the ultimate beneficial owner with limitations
  • England and Italy are the only two countries that have a ‘fit and proper person’ testing requirement in place for club owners/investors. The majority, 70% of countries surveyed, do not have such validation process in place
  • Only three countries (France, Italy and Switzerland) have a dedicated registry body to deal with club ownership

Emanuel Macedo de Medeiros (pictured), CEO, SIGA (formerly the CEO and founder of the European Professional Football Leagues, World League Association and ICSS INSIGHT) stated: “From my days as CEO of the European Leagues and World League Association, it was clear to me that, when it comes to football club ownership, there is a lack of a robust international regulatory framework and scrutiny. This facilitates a promiscuous and permissive environment, exposing the beautiful game to unwanted criminal infiltration. We know all too well the devastating effects when club ownership falls into wrong hands.  The preliminary findings of this study vindicates my belief that reform in this area is not a nicety, but an urgent necessity.”

Medeiros says SIGA’s Universal Standards on financial integrity are a step towards tackling the need for greater transparency and proper due diligence.

The report authors say their finding “show a considerable lack of transparency across all levels of clubs with details of exact ownership and investment virtually invisible at the lower leagues and club levels.”

Richard Weber, former Chief, head of the criminal investigation division of the IRS, on tax evasion in the US, said: “I have spent the last twenty years fighting financial crime in the US. Whilst a lot has changed, at the same not much has changed. Criminals will use and exploit the financial systems to commit crime. What has changed is the sophisticated nature of the crimes and its global dimension, which is the main change in recent years. We can see from the preliminary findings of the Global Study on Club Ownership that the loopholes from jurisdiction to jurisdiction make this fertile ground for criminals to operate.”

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