THE SCOPE OF THE FA REGULATIONS

The new A1 FA Regulations on Working with Intermediaries (the “FA Regs”) states: “Only an Intermediary may be used and paid by a Player or Club in relation to any Intermediary Activity”. To establish the scope of the Regulations we should take into account the “Appendix I – Definitions”, where is defined this concept.

“Intermediary Activity” means acting in any way and at any time, either directly or indirectly, for or on behalf a Player or a Club in relation to any matter relating to a Transaction. This includes, but is not limited to, entering into a Representation Contract with a Player or a Club.

This concept begs to consider the meaning of “Transaction” in the context of these Regulations.

“Transaction” means any negotiation or other related activity, including any communication relating or preparatory to the same, the intention or effect of which is to create, terminate or vary the terms of the player’s contract of employment with a Club, to facilitate or effect the registration of a player with a Club, or the transfer of the registration of a player from a club to a club (whether on a temporary or permanent registration basis).

On the one hand, it can be seen that the field of action of an Intermediary is all the matters related to the player’s employment contract and the transfer of the player, such as negotiations to sign a new employment contract or to conclude a signing of a player or a transfer; and always respecting all the Obligatory Terms of the Standard Representation Contract (form prescribed by the FA).

The main requirements of these Regulations are stated in this point. The Intermediary must be REGISTERED at the FA as an Intermediary and must be entitled to act under a valid REPRESENTATION CONTRACT. If he does not fulfil these two basic requirements, he could not act on behalf any Club or Player in the context of the scope of the Regulations.

Also, every relevant contracts and any document must contain the name, the signature and registration number of the Intermediary. Also if the Intermediary is a legal person, in this case the natural person representing it shall sign on behalf the Organisation.

The Regulations state the written Representation Contract as an essential element to carry out Intermediary Activities.

At the Regulation B2 it is stated the minimum features of the Representation Contract, which are:

It is included the duty to lodge the Representation Contract between them with the Association by all the Parties. Time limit: 10 days of being executed. This duty shall be complied also if the Representation Contract is early terminated, novated, varied or any other event that affects its validity.

 The assignment or subcontract:

The represented Player, prior to the Transaction takes place, could not to be represented by the Intermediary in a Transaction with a Club if he provides a written request to the Club with these guidelines.

The maximum duration of the Representation Contract: 2 years.

Minors at the Representation Contract:

The Payment to the Intermediary by his Client must be made in accordance the terms of the Representation Contract.

The C11 FA Regs is directly making reference to conclude an employment contract and/or a transfer agreement. They payment should be made as follows:

Payment by the Player to the Intermediary:

Payment by the Club to the Intermediary:

If the Player and the Intermediary have agreed periodic instalments to remunerate the latter and the employment contract lasts longer than their Representation Contract, the Intermediary will be entitled to the agreed instalments after expiry the Representation Contract until the Player’s employment contract expires, unless the Players signs a new employment contract without the involvement of that Intermediary.

Except assignment or subcontracting, the Intermediary cannot pass any remuneration relating to an Intermediary Activity to any other person or third party. The same for a Club who is paying the amount related to a transfer, this payment just may pay to the other Club.

Any payment to an Intermediary concerned a Transaction with a Minor is prohibited.

This is the most controversial point is related to the 3% remuneration ‘cap’ (which is a recommendation). But, why the Intermediary and the Client could agree, in my opinion, a percentage over this recommendation?

The Association shall be entitled to publish:

An Intermediary may undertake Intermediary Activity for more than one party in relation to a Transaction. They have to comply with the following requirements in full prior to start to act on behalf his Clients:

If any party does not provide the written consent in accordance above requirements:

Restriction on Conflict of Interest

Intermediary (or Intermediary’s Organisation) shall not have interest in a Club.

Player, Club, Club Official, or Manager shall not have interest in the business or affairs of an Intermediary (or Intermediary’s Organisation).

Interest is defined on the following way:

Also includes the interest of:

It is prohibited that an Intermediary has any interest in relation to a registration right or an economic right. This includes interest in transfer compensation or future transfer value of a Player.

A Player, Club, Club Official or Manager must disclose to the FA any agreement or contractual or other arrangement between them and the Intermediary, in 10 days of the entering into such agreement/arrangement and in any event no later than at the time of the registration of a Transaction by the Association.

The Intermediary must also disclose any agreement or contractual or other arrangement between him and a Club, Club Official or Manager in respect a Club Official or Manager, in 10 days of:

The last paragraph is stating the duty as an Intermediary to disclose the agreements/arrangements in respect a Club Official or Manager; therefore we can affirm that the Intermediary is just obliged to submit the Representation Contract to the FA (Regulation B3), but not all the agreements or contractual or other arrangements named above.

All of them (Intermediaries, Players, Clubs, Club Officials and Managers) shall disclose to the FA in writing any actual or potential conflict of interest and obtain the express writing consent of all the parties involved. It should be disclosed in 10 days of being completed.

REGISTRATION

Any natural or legal person who wishes to act as an Intermediary shall register with the FA. The registration shall be valid for 1 year.

A fee will be payable on initial Registration and for any renewal of this Registration. The initial fee will be waived for FA Licensed Agents (renewal fees payable).

A Test of Good Character and Reputation for Intermediaries must be submitted to the FA by the natural person or the natural persons acting on behalf an Organisation to contrast his “impeccable reputation”.

The designation of an Intermediary to use it in business relations once he completes his Registration will be: “FA Registered Intermediary”.

REQUIEREMENTS RELATING TO MINORS

Authorisation from The FA will be necessary to work with Minors. This authorisation shall be valid for 3 years.

This can be applied for during an initial Registration or throughout the Registration period.

A legal person registering as an Intermediary cannot apply to deal with Minors.

REGULATIONS APPLICABLE TO LEGAL PERSONS REGISTERED AS INTERMEDIARIES

A legal person can only be registered as an Intermediary by a natural person already registered as an Intermediary.

Also the legal person shall declare the natural persons registered as Intermediaries who are authorised to conduct Intermediary Activity on behalf a legal person. His name, signature and registration number must appear on the relevant paperwork of the Transaction.

The natural persons carrying out Intermediary Activities on behalf the legal person must meet the requirements above.

Luis Torres

(*Translated version of "El nuevo Reglamento sobre Intermediarios de la Federaci'on Inglesa" / IUSPORT.com / 19 February 2015 / By: Luis Torres)

The new ‘FIFA Regulation on working with Intermediaries’, which would come into force on 1^st of April of 2015[1]. We talk about this Regulation in sportslawwindow.com in an article on 6^th of August of 2014[2], where we submitted the changes about the actual Regulation on agents, moreover the new provisions introduced by the new Regulation. Also the well-regarded Argentinean jurist Mr. Eduardo Víctor Galeano talked about this topic in an article on IUSPORT.com on 10^th of October of 2014[3], where he raised a doubt due to his conviction that the prohibition from making any payments to an intermediary if the player concerned is a minor, is a relative ban instead an absolute one.

Specifically, the article 7.8 of the FIFA new Regulation on working with Intermediaries (hereinafter, “new Regulation”)  states as follows: “Players and/or clubs that engage the services of an intermediary when negotiating an employment contract and/or a transfer agreement are prohibited from making any payments to such intermediary if the player concerned is a minor”. We should bear in mind what we understand as a minor. It comes defined in the FIFA Regulation on the Status and Transfer of Players [4], being minor when he/she has not reached 18 years old. The article seems clear expressing its aim, and it carry us to the gratuity of the services when the player concerned is a minor that means an absolute ban.

As far as the relative ban thesis concerns, the article 5.2 of the new Regulation, which is based on the idea of the representation contract as a paid contract, because of it is included a minimum element that should be in the contract: “the remuneration due to the intermediary”, in addition the signature of the parties. The Argentinean author adds in relation to that signature that if the player would be a minor, the signature of the player’s legal guardian would validate the payment to the Intermediary, in accordance with this argument. The jurist also states that otherwise the “basic principle of universal order” and the “right to remuneration” would be violated.

Nevertheless, one feature of the new Regulation on Intermediaries is the signature by the Intermediary of the declaration where he confirms the knowledge of all the FIFA Status and Regulations, moreover the regulations of every member association and confederation where he carries out his tasks. One of the clauses of this declaration expressly refers to the issue that we are talking about, declaring that “I shall not accept any payment from any party if the player concerned is a minor” (point 6, Annexe 1 –natural persons- and 2 –legal persons-). Furthermore, the Circular no. 1417 (30^th of April of 2014)[5], the Executive Committee approved this Regulation, and its point 6, referring to the payments to intermediaries (art. 7 of the new Regulation) states: “A stricter approach has also been incorporated in relation to transactions involving minor players, prohibiting any payments to intermediaries”.  It seems clear the FIFA’s will to ban any payment when a minor is involve at the operation.

In the light of all this, we should recover the concept of “right to remuneration” that we expressed previously. Being this a right recognized in The Universal Declaration of Human Rights (article 23.3)[6], introducing the notion of the right to “just and favourable remuneration”, to every employee, adding it should be “worthy of human dignity”. In addition we can find the International Covenant on Economic, Social and Cultural Rights[7] and the article 7, where states the elements of a just and favourable remuneration.

On the other hand, it seems that the concept of fair, just and favourable remuneration under previous international texts analyzed, and its literal wording, is linked more closely to labor law as a right of the workers. What makes us rethink another aspect to solve this issue and is none other than: What legal nature has the contracts that formalize a club or player and the agent?

We perfectly know the work of the agents/intermediaries (we can call them how we want) at the football level, closing different kind of deals, agreements and contracts with a club and/or a player who works for, besides finding a club and negotiating a transfer to his player or club that he/she represents. The European Commission itself published in 2009 the document: “Study on sports agents in the EU”[8]. In this extensive publication about the agents in sports, we can find what type of contract is related with the work of an agent. Those are, the mandate contract and the brokerage contract (atypical contract in Spain without specific regulation). That means that this contract is on the civil law scope. Being one of the basic principles of the civil law the freedom of contract and freedom of choice.

Furthermore, another publication called “Principles, Definitions an Model Rules of European Private Law”[9], which carries out a study on everything around the civil law in EU (this work talks about a harmonization proposal of the private law in the EU), specially on the type of contracts, among which we find the mandate, and the brokerage as a speciality of the later. Also we observe with special attention the agency contract, which could refer to the function of the agent by the reason of his activities in the football.

We should focus on the mandate contract, this work based on the study of the European Civil Law, which was carried out taking into account the totality of the legislations of every Member State. We will refer to the legal status of this contract, due to it could be possible that the service is free of charge (we cannot forget that the legal nature of the mandate is free of charge), but the thing is that this gratuity is something that it does not occur at this moment. In fact, in Belgium (art. 1.986 of its Civil Code[10]) the mandate is a non-remunerated contract as general rule, unless the parties agree something different. In England instead, is the opposite, when the principal requires the services of a professional agent; he should be remunerated (Miller v. Beale -1879-[11]). In Spain, in the same like in Belgium, the article 1711 Civil Code and the STS 30^th of April of 1993 state that. Even though the article 1711 CC that if the representative is acting in accordance his profession it will constitute the obligation to make him a payment for the services. Moreover, the CAS, in an award dated on 16^th of April 2008 (B. Heiderscheid v. F. Ribéry -2007 / 0/1310 [14]) hold that remuneration is an essential component of the brokerage contract or mandate. Adding that any service provided by the agent should be paid, provided that it has played a decisive role in the operation and has complied with the duties and obligations of the contract signed by both parties. However this case does not refer to minors, gives us an idea of the importance of remuneration in the provision of this service by the agent. Despite the obvious possibility that gives this type of contract within the freedom of contract of civil law. It seems clear that the contract of mandate, once it hired a professional to provide the service, shall be paid, without ever forgetting the possibility of gratuity by the possible agreement between the parties, we understand, that would be lawful.

With respect to the agency contract, the mandatory reference is logically the Directive 86/653/CEE[15], which talks about this contract and the its remuneration feature. This directive expressly excludes of its scope the non-remunerated agents. Likewise the Spanish Act on agency contract (12/1997, 27^th of May) has preferred to add this feature in the first article of the Act. Moreover, we should bear in mind that the lack of an express stipulation at the contract about this point does not mean that is a gratuity service, but the payment will be fixed in accordance with practices. Understanding the remuneration as a right of the agent. We can observe that if we were in the scope of the agency contract (as far as the football-intermediary service concerned) we would be in front of a conflict of law case between the FIFA Regulation and this Directive, avoiding the primacy principle. This would involve the invalidity of the provision in the Regulation. Another aspect to take into account is the expenditure incurred by the agent in the course of its business, which are charged to the principal, that would involve another contradiction which would be resolve on the same way.

Finally, on the brokerage contract, a contract without specifically regulation in Spain, we will explain what constitutes. The Tribunal Supremo (our High Court) defines this contract as one for which a person (called offeror) instructs another (who is called the mediator) to report about the occasion or opportunity to conclude with any person or persons a business or make the necessary arrangements to obtain the voluntary agreement aimed at their achievement, promising in return to satisfy financial reward in the event that the contract would be conclude. As we cannot find any provision about this kind of legal business we are ruled by the general rules of our Civil Code where predominates the freedom of choice (art. 1.255 CC) and the article 1.091, which states: "The obligations arising from contracts have the force of law between the contracting parties and must be complied with under the same". That would suggest in our domestic legal system would be allowed the pact of the gratuity. But as the Tribunal Supremo holds, the offeror (the player or club, for the present case) is committed to "remunerate the mediator" (agent), once the "contract is concluded", here is the remunerative nature of this contract.

The result of all of this complex structure searching for the most adequate regulation of this matter generates on the one hand situations where we can find legal loopholes, or on the other hand a great number of sources that are applicable to the case and can create conflict of laws. Being the biggest problem, when there is still no consensus between stakeholders and government bodies at national and European level. The main factor that there is no specific regulation is the international dimension of sport and global reach. Only, Bulgaria, Greece, Hungary, Portugal and France have specific intermediary figure in football provisions.

In fact, the FIFA’s prohibition to remunerate this service when exists a minor involved with the transfer or the employment agreement has much to do with the French influence on this issue. France has provided this same aspect at its Sports Code[17] (article 225-5), being a just cause to terminate the contract for violation this article.

Another complication establishing the applicable law, due to every Member States regulate this matter on different ways. We ought to add the international scope that the intermediary’s function can reach, being easy closing deals around several countries. Because of all of this we have to consider the rules of applicable law for this topic. Two international treaties can be useful to resolve this problem. The Convention of 14^th March 1978 on Law Applicable to Intermediary and Representation contracts[18]; and the Rome Convention of 19^th June 1980 on the law applicable to contract obligations (Convention 80/934/ECC, “Rome I”)[19]. The logic establishes that we have to choose the Hague Convention, but the problem is that only France, Portugal and Netherlands have ratified it. Therefore we should use the Rome Convention, which states:

- Firstly, the agreement between the parties and, failing this,

- Law of the place where the contract was concluded, alternatively, where the agent has his business establishment, or, finally, in which he has his habitual residence (Art. 4).

On the one hand, I completely agree with the renowned jurist Mr. Victor Eduardo Galeano to claim the right to remuneration for the performance of a function and the service. Especially when this is done in the professional field. And as established the CAS in the case Heiderscheid B. v. F. Ribéry, the payment is an essential element in this type of contract (despite the historic nature of the mandate, for example). And it is true that this is an act that has been continuously carries out in the world of football, as well as the acceptance by the international community of this sport that has considered this practice as binding, these are factors due to the FIFA decision could be consider as controversial. Another argument is the provision of European legislation to compensate the agent within the contract term, as we have seen, when he/she is performing a professional work. Another assumption is given in the Directive 86/653/EEC, which mentions the paid nature of the agency contract, to be established in the absence of a contractual clause, according to custom or practices. And finally, as established by the Spanish Tribunal Supremo in the case of brokerage agreement, along the lines of the above, the performance will be paid when the agents accomplish a "professional" service.

On the other hand, it is true that we have a problem that affects minors and is also well known the protection that they have in the international community, so ethically, and with my finger pointing on those who take advantage of situations created by the effort of the children to succeed in a world that they do not known, seems a good measure. We have seen that FIFA does not hesitate when they have to apply sanctions in a minors’ case (an example is the current Barça’s ban that prohibits the Catalan club to sing any player until next year). Another advantage is the freedom of choice and freedom to draw up contracts, which we have named and governs the civil law, which allows to agree free of charge (as we saw) without any problem, especially in the mandate contract and the contract of brokerage. It is true that we are facing an imposition of the FIFA Regulation on Intermediaries, with French influence (as we previously discussed). In this Regulation the article 7.8, moreover the two Annexes (statement that the intermediary must sign to represent a club or player) expressly provide for the prohibition to be paid when there is a minor involved in the operation (either contract or transfer). No enabling the possibility that the parties cannot negotiate or pay when it is given with a minor. Seeing as it is undermined the negotiating capacity and the freedom to draw up contracts, as well as the right to compensation, by the grace of FIFA and its regulatory power.

In my opinion, I believe that we are again witnessing the will of FIFA to ban any problem that generates a headache. And I say again, because recently we have seen how FIFA has also decided to ban the TPOs in football (I would prefer a proper regulation), as I am for the protection of minors in football, without undermining the right to remuneration for a service provided by the intermediary and a proper and harmonized regulation. After thoroughly analyze this aspect, it strikes me as solutions for instance, a mandatory maximum percentage on the remuneration, not a "recommendation" for this case, where there are children involved, establishing a maximum of 3% to the intermediary; also provide of complete transparency every movement the intermediary would pretend with the minor (from the offers it receives, to the contracts that the intermediary has signed with the minor and/or the legal guardian). All with the aim of regulating this problem that the intermediaries should deal from 1^st of April of 2015 and in order that all parties are satisfied, although it is well known that we cannot please everyone.

REFERENCES

[1] FIFA Regulation on working with Intermediaries.

[2] “The new FIFA Regulation on Intermediaries”. Author: Luis Torres. Source: sportslawwindow.blogspot.com

[3] “De nuevo sobre el Reglamento FIFA sobre intermediarios: peor el remedia que la enfermedad”. Source: IUSPORT. Author: Eduardo Víctor Galeano (Legal advisor Club A. River Plate).

[4] Regulations on the Status and Transfer of Players.

[5] Circular FIFA no. 1417 adopted by the FIFA Executive Committee, on 30th of April 2014.

[6] Universal Declaration of Human Rights.

[7] International Covenant on Economic, Social and Cultural Rights.

[8] Study on sports agents in the EU. A study commissioned by the European Commission. November 2009.

[9] Principles, Definitions and Model Rules of European Private Law. Study Group on a European Civil Code.

[10] Civil Code (Belgium).

[11] Miller v Beale (1879) 27 WR 403.

[12] Civil Code (Spain).

[13] Tribunal Supremo Judgment. Sala de lo Civil (Civil Camber). STS 17456/1993

[14] B. Heiderscheid v. F. Ribéry (CAS 2007/0/1310).

[15] Directive 86/653/CEE, on agency contracts.MCC

[16] La Ley 12/1997, de 27 de mayo sobre el contrato de agencia.

[17] French Sports Code (Code du sport).

[18] Convention of 14^th March 1978 on Law Applicable to Intermediary and Representation contracts.

[19] Rome Convention of 19^th June 1980 on the law applicable to contract obligations (Convention 80/934/ECC, “Rome I”).