antiwitwaswetgeving | sportmanagement24

LEGISLATION

In addition to the research into the risk indicators, AML applications in Belgian professional football were also examined. Belgium is the first country in the world to subject its professional football clubs, football agents and football federation (KBVB) to preventive anti-money laundering legislation in 2020. In the context of the PrOFS research, the development and implementation of this extension of the AML regime was examined.

Intro AML (anti-money laundering)

Anti-money laundering legislation & Belgian professional football

Belgian professional football was added to the list of mandatory entities under the AML regime in 2020. This happened in the aftermath of the Propere Handen case, in which, among other things, match-fixing was organised in a structural manner and money laundered in the Belgian professional categories.

Money laundering in football is not exclusively a Belgian problem. In the past 20 years, government and private actors have frequently spoken out about the risk that the football sector poses for money laundering. This risk has arisen due to various vulnerabilities that are characteristic of the football sector, for example: major financial interests and money flows, little (financial) transparency in football governing bodies, emotionally driven investments, cultures of silence regarding fraud, etc.

What is the link with legislation and regulations?

As a result of the expansion of the AML regime, the Belgian professional football sector is now obliged to verify the identity of their customers, monitor transactions and report suspicious activities to the Financial Information Processing Unit (CFI).

The 2020 law provided for an implementation period of one year. However, four years later it has not yet been fully implemented (for example, the AML regime does not yet apply to football agents). The official objectives of the Belgian AML regime correspond to the European guidelines. These aim to 'prevent the financial system from being used for money laundering and terrorist financing'. It is still unclear whether the extension of the AML regime to professional football will actually achieve the objectives mentioned above. PrOFS research found little evidence that this expansion was introduced due to a higher risk of money laundering in the football sector, but rather as a government response as ‘crisis management’ on the Clean Hands scandal.

Want to know more about how the AML regime does or does not serve these goals? Click here

ProOFS Recommendations

Belgian AML legislation does not apply to transactions between football clubs and investors, despite the high money laundering risks involved. While some football bodies screen club owners, this remains limited in other competitions. This can lead to insufficient protection against suspicious persons and illegal funds. However, the EU has included in their proposal that these transactions must fall under the AML regime. A fit and proper persons test for investors is therefore also appropriate. This test can best be done by an independent party or the competent sports federation.

The EU proposal would ideally include football governing bodies (e.g. football federations). The football governing bodies have a lot of information about their affiliated clubs, including financial statements, through the licensing requirements that clubs must meet. These bodies therefore have an abundance of information that can be important in the prevention of money laundering.

Both the Belgian and EU regulations designate only professional football clubs as mandatory entities within the AML regime, making clubs subject to this legislation based on their sporting performance. As soon as clubs are relegated to the amateur level, their obligations under the AML legislation end. Conversely, clubs that are promoted to the professional level must comply with all AML obligations.