May 16, 2018

FIFA’s new approach with respect to debtor clubs (Article 64 of the FIFA Disciplinary Code)

Last May 9th FIFA published its Circular nº 1628 whereby the FIFA Disciplinary Committee (DC) decided to reinforce the system provided in article 64 of its Disciplinary Code to ensure that all decisions passed by any body, committee or instance of FIFA (and/or CAS) are respected, without necessarily requiring the intervention of the DC.

This new approach in interpreting article 64 (it’s important to note that the article is not amended), complements previous measures already taken by FIFA to ensure that debts are paid by clubs on time, such as (i) the competence, as from May 2017, for the members of the DC to decide individually on these type of cases, and (ii) the more recent inclusion in FIFA’s RSTP of a new art. 24bis (in force starting next June 1st), which grants FIFA’s decision making bodies[1] powers to impose, as part of the decision, sanctions on players and clubs in case a monetary decision is not complied with.

According to this new interpretation of article 64, it will be now the responsibility of each National Association to check if the DC’s decision has been complied with by the deadline granted, and it will be required to automatically apply the disciplinary measures agreed, such as Point deduction and/or ban from registering any new players, either nationally or internationally, for one or more entire and consecutive registration periods.

If, after the application of the above sporting sanctions the debt remains unpaid, the creditor club may request FIFA DC to impose additional sanctions, such as the relegation of the debtor’s first team to a lower division.

The Circular further addresses how the member Associations shall implement those sporting sanctions under this new procedure, and stresses that disciplinary proceedings may be opened against the association concerned if they fail to duly implement them.

Finally, FIFA’s DC has decided that it will no longer enforce financial decisions in those cases where Parties reach a settlement agreement and/or a payment plan after the DC’s decision, in which cases it will entail the automatic closure of the disciplinary proceeding. Any further claim resulting from the breach of such agreements will have to be lodged before the Players’ Status Committee or Dispute Resolution Chamber, or before the jurisdiction chosen by the Parties in the relevant agreement.

This last decision is clearly incongruous with the laudable objective of FIFA to speed up these financial procedures, as it would oblige the creditor to start a whole new procedure in case the settlement agreement is not observed. So the recommendation for creditor clubs at this point is clear: NEVER enter into any type of agreement with the debtor club once a decision by the DC has been passed. No matter how pitiful they show to you, how many financial problems they say they have, etc., once reached this point do NEVER enter into a new agreement and simply request the DC’s decision to be fulfilled.  

The above changes will apply to ALL disciplinary cases as from next 23 May 2018, regardless of the date on which the procedure was opened.

You can access the Circular here.

 

Toni Roca

Lawyer

[1] Players’ Status Committee, Dispute Resolution Chamber, the Single Judge or the DRC Judge.

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