Not for the first time in the history of the European Parliament: it all started in Belgium. An investigation into alleged bribery, money laundering, forged transfer contracts and the involvement of organized crime at the highest levels of professional football, which began in 2018, ultimately involved almost sixty officers, administrators, referees and coaches.
Known as Operation Clean Hands, the level of alleged corruption it uncovered not only led to the introduction of new, strict financial rules for clubs in Belgium, but also opened eyes in the corridors of power in Brussels. In 2019, football was added to the European Union’s watchlist for money laundering risks, with a United Nations report estimating that around $140 billion is laundered through the game every year. But while many leagues already have strict financial rules aimed at preventing fraud, French MP Damien Carême believes concerns are more about adhering to financial fair play rules than stopping corruption.
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“Criminals, oligarchs and the rich and powerful have privileged ways to launder their dirty money, and football is one of them, as expert reviews and scandals have shown time and time again,” Carême told the Guardian. “What is more important: preventing corruption, tax fraud, all kinds of human trafficking and the loss of confidence of citizens in their governments, or maintaining the competitiveness of football clubs? The choice was quickly made for the European Parliament.
“Can fans really enjoy the game knowing that the money used to buy your favorite player comes from the proceeds of organized crime groups or from a Russian oligarch supporting the war of aggression against Ukraine? Personally, I can’t do that.”
On Wednesday, European Parliament member states will vote to include the football industry in the Sixth Anti-Money Laundering Directive. No late issues are expected and this will mean that from 2029 most professional clubs and every agent within the European Union will be required to verify the identity of their clients, monitor transactions – including player transfers – and report suspicious transactions to their relevant financial intelligence services. Unit (FIU).
Known as ‘subject entities’, they will also be required to identify and publish in transparency registers the beneficial owners who own at least 15% of the club and to design and implement appropriate transaction monitoring procedures to identify suspicious transactions .
The expected changes are so seismic that policymakers have extended the adjustment period from the usual three years to five years, given the difficulties some clubs in Belgium have encountered in complying with similar regulations. Insiders say it is no coincidence that the new legislation was adopted in the same year that the European Council presidency is held by Belgian Charles Michel, with the pressure to deliver results ahead of June’s European elections.
But while the new rules are seen as an important step in the fight against corruption, critics have argued that the legislation has been rushed through without a comprehensive impact assessment carried out for several years. It is understood that UEFA alerted its stakeholders to the process over concerns that usual background work had not taken place as the legislation had been added as an amendment to an existing bill by the European Parliament in 2021.
It is believed that information was only requested by European football’s governing body or its stakeholders at a very late stage in the process, with Football Supporters Europe (FSE) also raising concerns about the initial proposals and recommending that to create tailor-made settlement rules for the sport after a long consultation period.
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The European Club Association, which represents the continent’s biggest clubs, is also said to have felt sidelined in negotiations with the EU and expressed its frustrations through UEFA and national governments – particularly France, the Netherlands and Germany. But despite a meeting described as ‘unpleasant’ by an EU source, where both sides disagreed over the proposal to include all professional clubs in the new legislation, they have agreed to a series of exemptions allowing clubs with a turnover of less than €5 million per season to circumvent the new laws that will also target crypto asset service providers and traders of luxury cars, planes and yachts.
Exemptions will only be granted if clubs can demonstrate they are a “proven low risk”, following assessment by the European Commission’s Anti-Money Laundering Authority (AMLA), which was confirmed in February to be based in Frankfurt.
These changes are believed to have softened UEFA’s initial opposition to the bill, with the European Parliament and European Council reaching a provisional agreement on the new measures in January, before their ratification by MEPs on Wednesday.
“UEFA shares the objectives of policymakers and stakeholders to tackle financial crime and protect the sustainability and integrity of the game at all levels,” a spokesperson told the Guardian. “Football stakeholders and authorities at European and national level will work hand in hand in the coming years to ensure optimal national implementation of EU rules and to help avoid unintended consequences across Europe’s diverse football landscape.”
It is also believed that clubs are concerned about how the new rules could affect the competitiveness of their clubs compared to the rest of the world – an argument that EU policymakers, who say they are trying to boost the fight against corruption ‘harmonization’ has caused confusion. in sports. “Everyone recognizes that there is a major problem in football that needs to be solved and the aim of legislation is to try to find the right balance,” said a source.
But while British clubs remain outside their jurisdiction for now, insiders expect they could follow suit if it proves successful. “Money laundering is taking place in football at all levels. You have criminals operating in connection with various European countries,” the source added. “But now there is no more blockage and the clock is ticking.”