Money Laundering in Sport and the Financial Action Task Force

Money Laundering

What is meant by the term money laundering?

Money laundering describes a process whereby illegal money is put through a cycle of transactions so that it can come out the other end as appearing to be legal money. This effectively means that the source of the illegally obtained funds is obscured through a succession of transfers and deals in order that those same funds can eventually be made to appear as legitimate income.

Does Money Laundering occur often in sport?

During the summer of 2009 there was a huge scandal involving money laundering in cricket which lead to the arrest of a prominent investor in the cricketing world.

Many feel that other sports such as football due to the large sums of money passing through the hands of individual clubs, players and agents has huge potential for money laundering.

Accordingly the Financial Action Task Force (FATF) has issued a report concerned with money laundering in football.

What is the Financial Action Task Force (FATF)?

  • The Financial Action Task Force is an inter-governmental body whose purpose is to develop and promote policies at an international and national level to combat money laundering and terrorist activity.

  • The FATF was established by a G-7 Summit held in Paris in 1989, with the cooperation of the European Commission and eight other countries.

  • Currently membership of the FATF consists of 31 international countries.

  • In Europe the FATF works alongside the Council of Europe Select Committee of Experts on the Evaluation of Anti-Money Laundering Measures (MONEYVAL) as well as the Council of Europe being a member of FATF.

Why is football so susceptible to money laundering?

Football as a sport in the UK is said to be extremely susceptible to money laundering due to the following factors:

  • The complex nature of the relationships and the many stake holders

  • The diversity of legal structures for football clubs

  • The lack of regulation for the ownership of football clubs

  • The volume of money involved with the sport

Complex nature of the relationships

Within the sport there is a very complex nature of the relationships between the many stakeholders. They are as follows:

  • The clubs

  • The players

  • The corporate sponsors

  • The individual club patrons

  • Football agents

  • Local business clubs

  • UK Government

Unlock this article now!

 

For more information on:

  • Diversity of the Legal Structure of Football Clubs
  • The Lack of Regulation for the Ownership of Football Clubs
  • The volume of money involved in the sport
  • How does money laundering occur in football?
  • Ownership of clubs
  • Transfer market and ownership of players
  • Image Rights, Sponsorship and Advertising Agreements