FIFA's ban on Third Party Ownership and the amendment of Annexe 3 RSTP

On 19 December 2014 the FIFA Executive Committee approved the decision to ban the Third-Party Ownership (TPO) of football players by implementing the articles 18bis and 18ter in the FIFA Regulations on the Status and Transfers of Players (RSTP). In short, TPO means that a third party, for example an investment company, owns the complete or part of the ‘ownership rights’ of a football player. The investment company would then for example be entitled to a profit share in the event that a player is sold to another club.

In its Circular Letter no. 1502 of 28 September 2015 FIFA announced that the Transfer Matching System (TMS) will be of assistance in the process of banning out TPO. In that regard, FIFA decided to amend Annexe 3 of the FIFA RSTP as per 1 October 2015 so that clubs and players will be obliged to inform the FIFA (through the TMS) of any sell on fees and to provide FIFA with a declaration, also to be signed by the player, in which the player states that there is no third-party ownership of the player’s economic rights. Such declarations are needed in order for the parties to obtain an International Transfer Certificate and to finalize the transfer.

The main purpose of FIFA is to impose more transparency in transfers and possible TPOs. As mentioned, FIFA wishes to impose the explicit obligation for clubs (and players) to inform the world’s football federation on possible economic rights involved (and, as such, to inform FIFA of where the transfer money is headed to).

FIFA ends its announcement by mentioning that this will also enhance legal security. Although it is not further being explained how the legal security will be enhanced, it must be duly noted that the current amendment of Annexe 3 of the FIFA RSTP imposes serious responsibilities and liabilities on clubs, as well as the player involved in an international transfer.

Although it is obvious that FIFA might want to punish clubs that are involved in the now prohibited TPO, players must now also be wary of the consequences of their possible involvement with such investment companies. If a player does not truthfully inform FIFA of any such involvement, then FIFA will have the possibility to impose the sanctions she deems necessary on the player. One can only assume that the possible sanctions imposed by FIFA will be heavier than a mere monetary fine, and sportive sanctions on both the player and the club involved can be expected

If you need any information, contact us. This article has been written by Thomas Geukes Foppen (Sports lawyer at Brantjes Advocaten).