IMMINENT ADDITIONAL REFORMS TO FIFA’S TRANSFER SYSTEM

#FootballLaw #Reforms #TransferSystem

Monday 17 May 2021 - Last week, FIFA’s Football Stakeholder Committee (FSC) reached an agreement on the third reform package of FIFA’s transfer system. The FSC’s endorsements include some key objectives and principles regarding, among other things, the international transfers of minors, transfer windows and financial regulations. The most concrete item is that the entry into force of the new loan rules, which was postponed due to the COVID-19 pandemic, is scheduled for the start of the 2022-2023 season. This blog highlights the principles of the third reform package, which have been submitted to the FIFA Council for its approval later this week.

FIFA’s Football Stakeholder Committee

FIFA’s Football Stakeholder Committee (FSC) was created in 2017 for FIFA to engage more directly with its stakeholders, such as leagues, clubs and players. The FSC advises the FIFA Council on several football maters, such as football’s structure and issues related to the interests of club football worldwide. The first set of reforms focused on, among other things, increasing integrity and transparency (e.g. a clearing house system), while the second reform package dealt with the changes to the regulations on loans, intermediaries, and training rewards. The third reform package concerns the international transfers of minors, transfer windows and financial regulations. In the meantime, the FSC has indicated that the new loan rules will apply from the 2022-2023 season.

New loan rules will enter into force on 1 July 2022

In last year’s blog post on FIFA’s guidance on COVID-19 football regulatory issues, we detailed how the amendments to the Regulations on the Status and Transfer of Players (FIFA RSTP) on player loans, initially foreseen as entering into force on 1 July 2020, had been postponed until further notice due to the COVID-19 pandemic. The FSC has now decided that the new loan rules, established to combat, among other things, the hoarding of players, will apply from 1 July 2022.

“FSC has indicated that the new loan rules will apply from the 2022-2023 season.”

This means that, for players aged 22 or older and for non-club-trained players aged 21 or younger, a limitation of eight loans in and eight loans out will apply as from the 2022-2023 season. These restrictions will not apply to players younger than 21 provided that they are club-trained, meaning that they have been registered with the club for a continuous period of three entire seasons between the ages of 15 and 21. For the 2023-2024 season, both the number of loan signings and loanees will be seven, and then six from the 2024-2025 season onwards. The number of international loans between the same clubs will be capped at three loans in and three loans out.¹

After a transitional period, the national football associations will have to implement loan rules that are in line with these newly-enshrined rules in the FIFA RSTP. Although one might question the effectiveness of the new loan rules since, for example, a multi-ownership model allows clubs to avoid the new loan restrictions, it will be interesting to see how clubs respond to the rule change in practice.

International transfer of minors

“FIFA will explore a framework for trials”

During the third reform package, the FSC has also been considering potential amendment to the international mobility of minors (Article 19 FIFA RSTP) and the registration and reporting of minors at academies (Article 19bis FIFA RSTP).

FIFA will explore a framework for trials, with a focus on legal certainty and the protection of minors. The regulations on private academies operating outside the scope of organised football might be modernised too. An examination of the humanitarian exception in Article 19 FIFA RTSP will also be in place, in order to see if it could be applied in a more flexible and modernised way to reflect “real-life cases that are rejected”. The possibility and feasibility of minimum protection standards for minors who transfer internationally is also on top of the FSC’s list.

For now, any other possible changes to Article 19 FIFA RSTP, such as a change to FIFA’s standard position that international transfers are only permitted once a player reaches the age of 18, have not been communicated. Article 19 FIFA RSTP has gained a lot of attention in recent months, including because of Brexit’s impact on the mobility of European minors, which we discussed in a previous blog post on Brexit.

“A more flexible approach regarding the transfer windows will be discussed”

Transfer windows, financial regulations and contractual stability

As for the registration periods, a more flexible approach regarding the time-allocated transfer windows each season will be discussed. The summer transfer window may currently not exceed twelve weeks, while the winter transfer period may not surpass four weeks. As a consequence of the COVID-19 pandemic, a flexible approach was already applied during the 2021-2022 season. The FIFA FSC also would like a more logical correlation between the start of the season and the opening and closing of the first registration period.

The FIFA FSC has also proposed exploring global financial governance guidelines and minimum club governance measures to improve financial sustainability and stability. In addition, transparency of financial flows within the transfer system is also ‘on the table’.

Another remarkable element is a debate concerning the financial consequences determined in Article 17 FIFA RSTP to evaluate if they provide sufficient protection for the achievement of the alleged objectives of the transfer system.

A final item to highlight is an assessment of Article 15 FIFA RSTP, which permits a player to terminate an employment contract with ‘sporting just cause’, and whether it continues to fulfil its original purpose.

It will be interesting to see which suggestions are adopted by the FIFA Council this week.

ATFIELD will of course monitor closely all future changes to the FIFA RSTP and report on them as they arise.

For more information on this subject, please contact:

Gauthier Bouchat (This email address is being protected from spambots. You need JavaScript enabled to view it.)

Niels Verborgh (This email address is being protected from spambots. You need JavaScript enabled to view it.)

¹ O. ONGARO, “FIFA RSTP – Latest Developments”, in M. COLUCCI and O. D. Bellia (eds.), Part I: international transfers of players, Sports Law and Policy Center, 2020, 67-69.