Money laundering in European football business

According to the Financial Action Task Force ("FATF"), an inter-governmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing, the multi-billion dollar global football sector has become a vehicle for money laundering and other forms of corruption, requiring an international response.

With the growing economic and social importance of sports and increasing profits that can be made out of sports, money now exerts a strong influence on the world of sports. Sports governing bodies and (inter-) national authorities recently expressed their concerns on the inflow of dirty money into the sporting industry. The EU White Paper on Sports already stated in 2007 that sport is confronted with new threats such as money laundering.

FATF focused its study especially on the football sector. Based on responses to a questionnaire from government and football authorities in 25 countries, more than 20 cases of football-related money laundering were detected. The cases ranged from the smuggling of large amounts of cash derived from apparently illegal transactions to more complex operations.

Several combined factors make football an attractive sector to criminals. Football is especially vulnerable because of:

• its structure: the football market is easy to penetrate, has complicated networks of stakeholders, the management often lacks professionalism and clubs have a diversity of legal structures.

• its finance: considerable sums are involved, the irrational character of the sums involved and the unpredictability over future results and the financial needs of football clubs

• its culture: social vulnerability of (especially younger) players, the societal role of football (people are reluctant to shatter sports' illusion of innocence) and the non-material rewards (eg the status which criminals could obtain via football outside the criminal world).

The study furthermore revealed that a variety of money flows involving various financial transactions increase the risk of money laundering. These are related to ownership of football clubs, the transfer market and ownership of players, betting activities and image rights, sponsorship and advertising arrangements.

Other cases showed that the football sector is used as a vehicle for evolving criminal activities such as trafficking in human beings, corruption, drug trafficking and tax crime. In other words, a lot to do for the policy makers, sports organizations and clubs to prevent the increasing activity of money laundering in the sports industry.