Football clubs must improve anti money laundering due diligence

The report (163 pages/2.58 MB PDF), released by HM Treasury and the Home Office, identified football as a growing area of concern for financial crime. The risk assessment flags football clubs and agents as being exposed to cross cutting money laundering risk, noting that the huge amount of money in football coupled with widespread financial distress due to high running costs puts professional clubs at particular risk of being used as conduits for criminal funds.

Edward James, corporate crime expert at Pinsent Masons, said: “The risk assessment has highlighted apparent risks that football has faced for some time, particularly in relation to ownership, sponsorships and player purchases. Football clubs should conduct comprehensive integrity due diligence when the stakes are high. That means more than simply Googling someone or asking AI tools. Proper checks should be performed either in-house or using external experts.” 

One of the vulnerabilities outlined in the NRA is the opacity of club ownership structures. The report warns that “complex corporate arrangements and offshore entities” can obscure the true beneficial owners of clubs, making it difficult for authorities to trace the source of investment funds. 

Player transfers also feature prominently in the assessment. The NRA notes that the transfer market, which often involves multi-million-pound deals and third party intermediaries, presents opportunities for criminals to inject illicit funds into the legitimate financial system. The use of agents, image rights deals and performance-related bonuses further complicates the financial landscape, increasing the risk of abuse, the assessment suggests. 

Despite these risks, the report acknowledges that many clubs have made strides in improving their compliance with anti-money laundering regulations. Larger clubs, particularly those in the Premier League, are more likely to have dedicated compliance teams and robust internal controls. However, the NRA warns that smaller clubs may lack the resources or expertise to effectively identify and mitigate financial crime risks. 

In any case, the government is urging clubs to adopt a more proactive role as “gatekeepers” of the financial system. This includes conducting thorough due diligence on investors, sponsors, and agents, as well as reporting suspicious activity to the UK Financial Intelligence Unit.

James said: “A particular form of money laundering risk that football clubs face is for the funds of sanctioned Russians to be hidden in seemingly legitimate high-value transactions that fund clubs. Whilst many deals are built on relationships, it is important to look beyond the handshakes and know who you are really dealing with. If something seems too good to be true, it probably is, and particular caution should be adopted when unknown individuals arrive on the scene with no known prior connections and claims of unimaginable wealth. It is clear that regulators are going to look more closely at any significant activity and deals.”

The government has pledged to work more closely with football authorities, including the Football Association and the Premier League, to strengthen anti-money laundering oversight. This may include enhanced reporting requirements, targeted guidance for clubs, and increased enforcement action against those to be found in breach of regulation.