EU Implements AML Regulations For Football Agents And Professional Football Clubs

The new European Union ("EU") Anti-Money Laundering Regulation ("AMLR") that has very recently been adopted by the EU Council adds football agents and professional football clubs to the expanding list of obliged entities for anti-money laundering purposes. This particular inclusion shall apply from10July 2029, though relevant guidelines shall be issued by the EU Anti-Money Laundering Authority ("AMLA") by 10 July 2026.

According to the AMLR, the inclusion of football agents and professional football clubs in the said list of obliged entities, applies in respect of the following transactions:

1. Transactions with an investor
2. Transactions with a sponsor
3. Transactions with football agents or other intermediaries
4. Transactions for the purpose of a football player's transfer.

The AMLR defines a professional football club as "any legal person that is, owns or manages afootball club that has been granted alicence and participates in the national football leagues in aMember State and whose players and staff are contractually engaged and are remunerated in exchange for their services".

The AMLR also defines a football agent as "anatural or legal person who, for afee, provides intermediary services and represents football players or professional football clubs in negotiations with aview to concluding acontract for afootball player or represents professional football clubs in negotiations with aview to concluding an agreement for the transfer of afootball player".

The AMLR recognizes that "the activities of professional football clubs and football agents are exposed to risks of money laundering and its predicate offences due to several factors inherent to the football sector, such as the global popularity of football, the considerable sums, cash flows and financial interests involved, the prevalence of cross-border transactions, and the sometimes opaque ownership structures. All those factors expose football to possible abuse by criminals to legitimise illicit funds and thus make the sport vulnerable to money laundering and its predicate offences. Key areas of risk include, for example, transactions with investors and sponsors, including advertisers, and the transfer of players."

Because of the above, professional football clubs and football agents will in due course be required to put in place robust anti-money laundering measures, including carrying out customer due diligence on investors, sponsors, including advertisers, and other partners and counterparties with whom they transact.

Nevertheless, the AMLR allows Member States that wish to avoid putting any disproportionate burden on smaller clubs that are less exposed to risks of criminal misuse, to exempt such professional football clubs from the requirements of this Regulation, whether in full or in part, and on the basis of aproven lower risk of money laundering, its predicate crimes and terrorist financing.

In particular, Member States may decide to exempt, in full or in part, professional football clubs that participate in the highest division of the national football league and which have atotal annual turnover of less than EUR5 million, or the equivalent in national currency, for each of the previous two calendar years from the requirements set out in the AMLR.

Member States may also decide to exempt, in full or in part, professional football clubs that participate in adivision lower than the highest division of the national football league from the requirements set out in this Regulation on the basis of proven low risk posed by the nature and the scale of operation of such professional football clubs, on the basis of risk assessment of the professional football clubs concerned.

The professional football clubs and the football agents that shall be considered obliged entities for money laundering purposes as from 10 July 2029 shall need to adopt appropriate policies, procedures and controls which shall include among others:

1. the carrying out and updating of an appropriate business-wide risk assessment;
2. the obliged entity's risk management framework;
3. customer due diligence, including procedures to determine whether the customer, the beneficial owner, or the person on whose behalf or for the benefit of whom atransaction or activity is being conducted, is apolitically exposed person or afamily member or person known to be aclose associate;
4. reporting of suspicious transactions;
5. outsourcing and reliance on customer due diligence performed by other obliged entities;
6. record retention and policies in relation to the processing of personal data;
7. the monitoring and management of compliance with appropriate internal policies and procedures, the identification and management of deficiencies and the implementation of remedial actions;
8. the verification, proportionate to the risks associated with the tasks and functions to be performed, when recruiting and assigning staff to certain tasks and functions and when appointing agents and distributors, that those persons are of good repute;
9. the internal communication of the obliged entity's internal policies, procedures and controls, including to its agents, distributors and service providers involved in the implementation of its anti-money laundering and countering of terrorist financing policies;
10. a policy on the training of employees and, where relevant, agents and distributors with regard to measures in place in the obliged entity to comply with the requirements of AMLR, Regulation (EU) 2023/1113 and any administrative act issued by any supervisor.

In addition, they shall need to include internal controls and an independent audit function to test the internal policies and procedures referred to above. In the absence of an independent audit function, obliged entities may have this test carried out by an external expert.

The inclusion of football agents and professional football clubs as obliged entities under the new EU Anti-Money Laundering Regulation (AMLR) marks a significant step in combating money laundering within the sports sector. Law firms advising these entities will need to ensure compliance with the extensive requirements outlined in the AMLR, including risk assessments, customer due diligence, and robust internal controls. The phased implementation, with guidelines expected by 2026 and full application by 2029, provides a timeline for adaptation. Law firms must proactively guide their clients through this transition, emphasising the importance of stringent anti-money laundering measures to mitigate risks and ensure adherence to the new regulatory framework.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.