Professional clubs respect AML rules, but what exactly does that mean?
The Pro League organised its third AML forum regarding Anti-Money Laundering rules that apply to our 26 clubs. The Belgian professional leagues are the first in Europe to comply with this strict audit mechanism. But what exactly does that mean?
AML stands for Anti-Money Laundering. Belgian football clubs meticulously follow anti-money laundering legislation, as issued by the Belgian government. Together with the FPS Economy and business consultant Ingenio-GRC, practices and manuals were drawn up to allow clubs to fully comply with the AML rules. These rules benefit the transparency of Belgian football. And by conducting these checks, Belgian professional clubs leave a trace that makes it easier for the courts to detect fraud.
The Pro League organises periodic training and information moments during an AML forum. This week, the impact of anti-money laundering on the football sector was highlighted and a demo was shown of a supporting AML tool offered to all clubs by the Pro League. Sector federation Febelfin and Belgian banks, which also have to comply with AML rules, participated in the sessions.
What does AML or anti-money laundering imply for our football clubs?
Every transaction (transfer, agent deal, sponsor agreement, hospitality contract, etc.) needs to be analysed. The assessment of a business deal breaks down into two aspects. A risk assessment is conducted for both parts. Depending on this analysis, the clubs decide whether the deal can go ahead. When clubs suspect money laundering, they inform CTIF-CFI (Financial Information Processing Unit).
1. Know Your Customer (KYC)
Clubs must carefully find out who they're dealing with. For each transaction, they verify the identity of the people and/or companies they want to do business with. The extent of this check depends on the risk profile (low/medium/high) of a particular type of client. This obligation needs to be met before a business relationship is entered into. This process comprises two steps:
- Step 1 = identification, or collecting all the data of the contracting party.
- Step 2 = verification, or making sure the identification data are correct and relate to the contracting party.
Not only the contracting party is screened, but also the Ultimate Beneficial Owner, or the people or organisations that ultimately benefit from the transaction. What follows is a fictitious example for the sake of clarity: a football team reaches a sponsorship agreement with John Doe N.V., but the majority shareholder of John Doe N.V. turns out to be John Q. Public. Both John Doe N.V. and John Q. Public are subjected to an AML check.
Images of the Anti-Money Laundering Forum:
2. Know Your Transaction (KYT)
On completion of the identification and verification, our clubs check every payment and transaction.
The purpose is to identify and eliminate atypical transactions. What are atypical transactions?
Atypical transactions may concern transactions where payment needs to be made to a person other
than the identified client, payments to accounts of partners on the FATF (Financial Action Task
Force) list of suspects, transactions conducted entirely in cash, and so on.
The AML officer investigates the background and the purpose of that transaction. The club also checks whether the transaction shows normal economic value. Suppose a club receives an offer of 150 million euros for a 19-year-old player with few appearances in the first team. This is abnormally high and does not represent his real economic value. This transaction is not 'at arms length', and money laundering can be suspected. In this case the club contacts CTIF-CFI.
Other alarm bells?
- Unnecessarily complex transactions.
- Unusually big transactions (see ‘at arms length’ principle).
- Transactions with an unusual pattern.
- Transactions don't show an economic or legitimate purpose.
The Pro League facilitates the screening, monitoring and transparent reporting of all business partners such as sponsors, football agents, board members and other clubs thanks to a partnership with corporate data specialist Altares Dun & Bradstreet. Read all about our partnerhsip here.
