FIFA’s Clearing House rules are a double-edged sword for football clubs

The FIFA Clearing House Regulations

The regulations, which came into force in November 2022, impose specific obligations on football clubs when registering players and transferring players to different clubs. They centralise the processing of payments related to the transfer of football players between clubs though the new FIFA Clearing House. The regulations also impact on two forms of payments that are relevant to corporate transactions involving clubs: ‘training rewards’ and ‘solidarity payments’.

Training rewards are effectively the payments which are due to a club involved in the training of a player who is subsequently transferred either nationally or internationally. Solidarity payments, meanwhile, occur when a player is still contracted but is transferred between jurisdictions. A certain amount of the transfer fee is held back as a “solidarity fee”, which is payable to various other clubs involved in the youth training and development of the player.

Under the new regulations, FIFA will calculate the training reward payments for both training rewards and solidarity payments and will communicate these to the FIFA Clearing House to be processed. The FIFA Clearing House will then act as a central counterparty in these payments and will perform all required checks in relation to the payment process.

The FIFA Clearing House will make sure that the money paid by the new club is correctly distributed to the training clubs, based on a new global electronic player passport system detailed in article 8 of the regulations. It will also ensure that payments are made in compliance with national and international financial regulations – including any applicable anti-money laundering (AML) checks. Given the current geopolitical climate, these AML checks are likely to be comprehensive in nature.

The potential impact of the new rules

Players are often the highest value assets at any football club, meaning that there can be considerable value in training rewards and solidarity payments. These payments are often an important source of income for smaller clubs. FIFA has now internalised the payment process, the terms of which will be subject to review by the FIFA Secretariat. This should facilitate greater transparency in the process generally and consequently, this should provide a degree of security to smaller clubs to ensure that they receive the payments they are owed in a timely manner.

The fact that FIFA is now assuming a more prominent role in the transfer process, in particular in relation to these specific payments, should help to balance the often unequal bargaining power between smaller and bigger football clubs. It is also worth noting that the amounts payable from the FIFA Clearing House are payable only to the relevant football club itself – the licensed entity – and cannot be made to any other entity, such as the football club owner, for example.

Article 15 of the Regulations also places a renewed emphasis on ensuring compliance with sanctioned countries, AML rules and anti-corruption standards. While this is a welcome step, it is likely to lead to increased administrative burdens on football clubs when it comes to the transfer process generally.

Co-written by Conall Ennis of Pinsent Masons.