Money Smart Athlete Blog

Football and the EU Money Laundering Risk List

Oct 28, 2020 | Special Themes

By Constantinos Massonos, Contributor

The European Union (EU) has for years now been designing and implementing laws and policies that aim to prevent the use of the Union’s financial markets for money laundering, a process through which illegally obtained money are put through various transactions and deals that can eventually make the money appear as they were obtained from legitimate sources. Most recently the European Commission has started carrying out risk assessments and identifying potential risks that might appear in the various financial sectors inside the EU.

When it comes to the sports sector, the European Commission initially raised concerns about the future threats and challenges that sport would face as a result of its exponential commercial growth through its “White Paper on Sports”, in 2007. The report included concerns for corruption, tax evasion, bribery, money laundering and more.

Thirteen years later, football is the world’s most popular sport and is still growing exponentially. This growth did not only attract the interest of fans and brands, but also attracted the interest of the wrong kind of people who might invest questionable amounts of money with no apparent or explicable financial return or gain.

The complex nature of the relationships between football stakeholders, the big diversity of legal structures for football clubs that makes their acquisition fairly easy, a lack of regulation and the extremely large volume of money involved in the sector, are the main factors making football the sport of choice for money laundering and other criminal activities.

The involvement of unlawful people in football alerted national police forces and Europol who have managed to disrupt a number of organized crime groups working within football in and around Europe. In 2016, operation “Matrioskas” in Portugal uncovered a Russian mafia led crime group that managed to launder millions of Euros through the Portuguese football club Uniao Desportiva de Leiria. Later, in 2018, investigations in more than 7 European countries managed to uncover another international organized crime group that included football club board members, player agents, referees, lawyers, journalists and managers who conspired to commit money laundering, bribery and match fixing.

With the aforementioned cases just being the top of the iceberg, the European Commission recognized that there is a significant risk of money laundering in professional football and it has decided to add the sector to its watchlist of money laundering risks for the European economy, in its Supranational Risk Assessment of money laundering and terrorist financing risks report, in July 2019.

But the European Commission did not just add professional football to a watchlist, it went forward to propose a number of statutory measures and recommendations to its member states. These measures not only aim to raise awareness of the risk of money laundering but also call for all football stakeholders including clubs, federations, lawyers and others to be required to submit any suspicious activities to authorities in the same way banks do.

The proposed measures represent a critical first step from the European Union towards regulating the financial aspect of professional football in Europe and preventing criminal groups of being involved in the sport. For further information on the proposed regulation and measures, you can contact us at info@apc-sport.com.

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