FIFA Temporarily Suspends The New Football Agent Regulations

Introduction

As we have explored in several previous blogs, the FIFA Football Agent Regulations saga has been a key point of discussion in the world of football. On the 30th December 2023 the Bureau of the Council of FIFA approved the decision to to provisionally globally suspend specific aspects of the FIFA Football Agent Regulations (FFAR) until the European Court of Justice (ECJ) delivers a final verdict. The news was broken via a circular distributed worldwide to stakeholders. In this blog we take a neutral look at the situation and explore the key points to be aware of as agents operating in the industry.

FIFA’s Ongoing Legal Battles

As we’ve previously discussed in our earlier blog posts, FIFA’s experience with the FIFA Football Agent Regulations (FFAR) has been anything but smooth. The journey has been marked by a series of protracted legal disputes initiated by football agents and their affiliated associations throughout Europe. These legal challenges were primarily designed to scrutinise the legality of FFAR and to strategically delay their full implementation.

It’s important to note that FIFA has not been without triumph in these legal battles, something that was quickly pointed out within the Circular. The Court of Arbitration for Sport (CAS), a preeminent authority in matters related to sports disputes, has consistently ruled in favour of FIFA, affirming the legality and justifiability of FFAR. Although it is surprising when we look at the individual European courts, the majority of which have ruled against FIFA or deferred to the ECJ, that the ruling of the most reputable Sports court contradicts the majority. We will analyse the CAS decision in more detail in a later blog in order to try to understand why this might be…

The legal victory with CAS has nevertheless encouraged FIFA in their pursuit of implementing the FFAR as a legitimate and essential regulatory framework for the football industry. 

CAS is the only legal victory for FIFA so far. Elsewhere, in a pivotal development in May 2023, the District Court of Dortmund in Germany issued a preliminary injunction targeting specific provisions within the FIFA Football Agent Regulations (FFAR). The injunction mandated the suspension of a cluster of regulations integral to FFAR’s functioning. 

The District Court of Dortmund’s decision to suspend these specific FFAR provisions undoubtedly introduced a significant degree of uncertainty and complexity into the football agent industry and player transfer market. 

As it turned out, the decision in Germany was the first of many in a long line of European courts that ruled against FIFA. Particularly in some of the major football nations such as Italy, Spain, France and England, the National Football Federations opposed FIFA and decided they would not fully implemented the regulations. There is also further legal support such as the Arbitration Tribunal in the UK which also made it clear that their view is that the FFAR does not align with competition laws. Evidently, it is not just Germany that has forced FIFA into rethinking the implementation of the FFAR but resistance has spread across Europe and also in Brazil. There is also an element of common understanding and acceptance that if agents in other countries were to oppose the regulations in court, there would most likely be many more national court’s ruling against the regulations.

FIFA’s Response: A Global Suspension

In the face of legal blocks and overwhelming opposition against the regulations across many major football countries, FIFA has opted to provisionally suspend the affected FFAR rules on a global scale. The rationale behind this suspension is to maintain consistent legal standards in international transfers, regardless of their association with the European Union. This was a particularly clarification step with the fast-approaching January transfer window causing significant confusion for agents and other stakeholders.

Let’s delve deeper into the specific FFAR provisions that were placed under the injunction in Dortmund and hence, have been provisionally suspended globally by FIFA until the final decision of the ECJ:

1. Service Fee Cap (Article 15, Paragraphs 1-4): The court’s injunction and FIFA’s circular has halted the enforcement of the 3% and 5% limits on service fees charged by football agents during player transfers. Transactions in January will not be subject to these caps.
2. Rules Concerning Service Fee Payments (Article 14, Paragraphs 6, 8, and 11): The suspension extends to regulations governing how service fees are calculated, negotiated, and paid between agents and the parties involved in football transfers. 
3. The „Client Pays“ Rule (Article 14, Paragraphs 2 and 10): Another contentious area addressed by the injunction is the „client pays“ rule, which outlines who is responsible for covering the agent’s fees. This suspension has implications for the financial agreements between players, clubs, and agents in the January window.
4. Rules Regarding the Timing of Service Fee Payments (Article 14, Paragraphs 7 and 12): FFAR’s provisions concerning the timing of service fee payments have also been temporarily set aside. This regulation specifies when agents are entitled to receive their fees during a player transfer
5. Prohibition of Dual Representation (Article 12, Paragraphs 8-10): The injunction also affects rules aimed at preventing agents from representing both the buying and the selling club in a single player transfer transaction. 
6. Reporting Obligations (Article 16, Paragraphs 2 h), j), k), and 4): FFAR’s reporting obligations, which mandate that agents provide various reports and information to relevant authorities, have also been temporarily suspended. 
7. Rules Regarding Disclosure and Publication (Article 19): Finally, the injunction extends to FFAR’s regulations related to disclosure and publication requirements of what information must be made public during and after player transfers.

Within FIFA’s Circular, the governing body has advised member associations to temporarily suspend all equivalent provisions from their national football agent regulations. The only exception is when these provisions directly contradict local laws and national law will always be held superior to FIFA Laws. This will likely remain the case until the ECJ has concluded their findings on the FFAR.

One thing that is important to note is that in the majority of countries, as we have discussed in our previous blogs, still require agents to sit the reintroduced FIFA Agent Exam in order to obtain their licence. The only exception to this is in Germany where agents that operate nationally do not need to have passed the exam. However, if they are working on international transfers and transactions, they will still have to pass the exam. 

FIFA’s Stance on FFAR

Despite a flurry of rulings against the new Football Agent Regulations, FIFA are clear that their stance on the FFAR remains firm and unyielding, even in the face of the persistent legal battles and the controversies that have surrounded these regulations. It will be interesting to see how long this continues and whether they will be successful to any extent with implementing the regulations in 2024. Their main arguments are as follows:

1. Essential and Proportionate Regulations: FIFA emphatically asserts that the FFAR is not just a set of regulations but an essential framework for the football industry. According to FIFA, these regulations are meticulously designed to strike a delicate balance, ensuring that they are both essential and proportionate. FIFA sees the FFAR as necessary to bring transparency to the global football transfer market. 
2. Full Compliance with the Law: FIFA underscores that the FFAR is designed to be fully compliant with the law. They insist that these regulations have undergone rigorous legal scrutiny and have consistently withstood challenges in various courts and arbitration panels. FIFA’s legal experts maintain that the FFAR aligns with international legal standards, and its implementation is in accordance with the laws governing the football industry.
3. Addressing Systemic Issues: FIFA’s position is that the FFAR represents a significant step forward in addressing long-standing systemic issues within the international transfer system. The regulations aim to curb excessive fees, eliminate conflicts of interest, enhance transparency, and provide a more equitable environment for players, clubs, and agents alike. FIFA believes that these measures are not only beneficial but also essential for the long-term health and integrity of the football transfer market.
4. Support from Stakeholders and Authorities: It’s worth noting that FIFA asserts that the FFAR has garnered widespread support, not only from within the organisation itself but also from various football stakeholders worldwide, beyond just the criticism of football agents themselves. This includes clubs, players, and, importantly, European political authorities. FIFA emphasises that FFAR has been recognized as a critical and necessary step by authorities beyond the world of football, underlining its significance in addressing the complex dynamics of player transfers.

Conclusion

The FIFA Football Agent Regulations (FFAR) saga continues to unfold with FIFA’s recent decision to provisionally suspend specific aspects of these regulations pending a final verdict from the European Court of Justice (ECJ). The suspension of key FFAR provisions, such as service fee caps, rules concerning service fee payments, and the „client pays“ rule, has introduced a level of clarity into the football agent industry and player transfer market ahead of the January window. 

Despite significant ongoing challenges, FIFA remains steadfast in its support of the FFAR, citing its essential and proportionate nature, full compliance with the law, and its potential to address systemic issues in international player transfers. 

As we await further developments and legal proceedings, the future of FFAR implementation remains uncertain, and its impact on the industry will continue to be a subject of keen interest and debate.