Professional football clubs as obliged entities under the new EU Money Laundering Regulation (Part 2)

The first part looked at the obligations of professional football clubs as future obliged entities under the EU AML Regulation. However, these are not the only obliged entities in the football sector: football agents and holding entities will also be subject to anti-money laundering obligations as independent obliged entities from 10 July 2029.

Football agent

In future, football agents will also be subject to new obligations in the football sector. These are defined in Art. 2 Para. 1 No. 53 EU AML Regulation as a "natural or legal person who, for a fee, provides intermediary services and represents football players or professional football clubs in negotiations with a view to the conclusion of a contract for a football player or represents professional football clubs in negotiations with a view to the conclusion of a contract for the transfer of a football player".

The definition of a football agent is closely linked to the definition of a football player. The term "football player" is not explicitly defined in the regulation. However, it can be assumed that it refers to players who play for a professional football club within a national football league (read more in our first blog post here). Furthermore, the definition of a football agent is very similar to that of a DFB or UEFA player agent.

A restriction to certain transactions that exists for professional football clubs, for exampleis not intended for football agents. According to the wording of the regulation, as soon as a football agent provides a brokerage service within the professional sector, he also remains obliged to do so for any further brokerage. This means that a football agent may also have to fulfil due diligence obligations towards a non-professional football player. It is not stipulated whether the status of the football agent as a person subject to due diligence obligations continues after a certain period of time in which the football agent is no longer active (in the professional sector).

Holding entities

Holding entities are also obliged entities under the EU AML Regulation. These are not initially assigned to the football sector, but can have a huge impact on it.

Entities that hold a professional football club as a subsidiary (see the definition and obligations of a professional football club under the EU AML Regulation here part 1 of the blog post) are themselves part of the new group of obliged entities in accordance with Art. 3 (3) (m) EU AML Regulation. These are deemed to be "non-financial mixed holding companies" (Art. 2 para. 1 no. 13 EU AML Regulation). The prerequisites for the existence of such a company are that

- it is not a financial holding company or a mixed financial holding company (these are already obligated parties),

- it is not a subsidiary of another company (i.e. it is the "ultimate" group company) and

- at least one subsidiary is an obliged entity pursuant to Art. 3 para. 3 EU AML Regulation (e.g. a professional football club or a football agent).

If the definition provided is followed literally, the parent company, for example, whose subsidiary includes the outsourced corporation of a Bundesliga club, is itself a non-financial mixed holding company and is therefore itself subject to the regulation (Art. 3 para. 3 lit. m) EU AML Regulation). The obligations under money laundering law would then apply to the entire activities of the holding company, which could go much further than just football-related transactions. Bayer AG can serve as a practical example: This is because it holds a professional football club (Bayer 04 Leverkusen Fußball GmbH) as a subsidiary and thus becomes a non-financial mixed holding company. This means that it would have to comply with anti-money laundering obligations in its day-to-day business.

As this example shows, the mere interpretation based on the wording does not lead to a practical solution. This is because non-financially mixed holding companies that hold a professional football club would have to fulfil more obligations than the professional football clubs themselves. It would be desirable for such companies to only be subject to the due diligence obligations that the professional football clubs (subsidiaries) must also fulfil. This would synchronise the obligations of the holding company and the subsidiary.

Outlook

It remains to be seen what specific impact the new regulations will have on the football sector; the interpretations of the AMLA and the other supervisory authorities will play an important role here. The regulation will then take effect and be directly applicable from 10 July 2029.