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Football transfers: some key concepts

By Frans de Weger & Thibault Dochy BMDW Advocaten Haarlem The Netherlands   Herewith some explanations on three key concepts in the FIFA Regulations on the Status and Transfer of Players for the benefit of our readers: The “Protected Period” Pursuant to Article 13 of the Regulations on the Status and Transfer of Players (the “RSTP”), the contract between a professional and a club can only be terminated on expiry of the term of the contract or by mutual agreement. The main purpose of this provision is that a club and a player that enter into an agreement should, in principle, respect and honour the contractual obligations during the term of the contract, also known as the principle of Pacta Sunt Servanda. FIFA, therefore, introduced the Protected Period, which was meant to safeguard the maintenance of contractual stability. The Protected Period corresponds to a period of 3 entire seasons or 3 years, whichever comes first, following the entry into force, if such contract was concluded prior to the 28th birthday of the professional, or to a period of 2 entire seasons or 2 years, whichever comes first, following the entry into force of a contract, if such contract was concluded after the 28th birthday of the professional. FIFA was of the opinion that unilateral termination of a contract without a justified reason, especially during the Protected Period, had to be vehemently discouraged (which also follows from the FIFA Commentary). In other words, during the Protected Period it had to be made much more difficult for one of the parties to unilaterally terminate the employment contract. It must further be noted that, if the parties agree to extend the employment contract, the Protected Period will start again. Parties then aim at longer contractual stability. The Protected Period plays a key role with regard to the amount of financial compensation in the case of a unilateral termination, but also regarding the sporting sanctions to be imposed. The difference between the breach during or after the Protected Period is that sporting sanctions will only be imposed on the party that breached the contract within the Protected Period. Unilateral breach without just cause (or sporting just cause) after the Protected Period will not result in sporting sanctions.   THE INTERNATIONAL TRANSFER CERTIFICATE (ITC) Pursuant to article 9 of the FIFA RSTP, players registered at one association may only be registered at a new association once the latter has received an International Transfer Certificate (ITC) from the former association. Furthermore, associations are forbidden from requesting the issue of an ITC in order to allow a player to participate in trial matches. In accordance with art. 9.3. of the FIFA RSTP, the new association shall inform the association(s) of the club(s) that trained and educated the player between the ages of 12 and 23 in writing of the registration of the player as a professional after receipt of the ITC. An ITC is not required under the age of 10 (art. 9.4. of the FIFA RSTP). Considering the above legal background, a player who is registered with a club that is affiliated to an association will, therefore, not be eligible to play for a club affiliated to a different association, unless an ITC has been issued by the former association and received by the new association. Until the ITC has been received by the new association, the professional is not eligible to play in official matches for his new club. As an example, if a player is transferred from the German professional football club Bayern München to the Italian professional football club AC Milan, the Italian football association will ask for an ITC from the German football association. Within the following seven days after the date of the ITC request, the German football association will issue the ITC to the Italian football association or inform the Italian association that the ITC cannot be issued because the contract between Bayern München and the player concerned has not expired or that there has been no mutual agreement regarding its termination. THE FIFA TMS Pursuant to the FIFA RSTP, the Transfer Matching System (TMS) is a web-based data information system with the primary objective of simplifying the process of international player transfers, as well as improving transparency and the flow of information, and is designed to ensure that football authorities have more details available to them on international player transfers. This will increase the transparency of individual transactions, which will, in turn, improve the credibility and standing of the entire transfer system. The FIFA RSTP further provides that TMS is designed to clearly distinguish between the different payments in relation to international player transfers. All such payments must be entered in the system, as this is the only way to be transparent about tracking the money being moved around in relation to these transfers. At the same time, the system will require associations to ensure that it is, indeed, a real player who is being transferred and not a fictitious one being used for illicit activities, such as money-laundering. The use of TMS is a mandatory step for all international transfers of professional male and female players within the scope of eleven-a-side football, and any registration of such a player, without the use of TMS, will be deemed invalid. See Annex 3 of the FIFA RSTP for a detailed description of the system. Via Circular no. 1500, FIFA informed its members that, on the occasion of its meeting on 20 and 21 March 2014, the FIFA Executive Committee approved a completely new Annex 6 to be included in the RSTP, which concerned claims related to training compensation (Article 20 of the RSTP) and the solidarity mechanism (Article 21 of the RSTP).[1] According to this Circular, FIFA (Transfer Matching System GmbH) had been working on the creation and implementation of an adequate system to manage properly claims through the TMS. The new system involves the way claims will be managed, thereby making use of a more up-to-date system (TMS) rather than the current paper-based process, according to FIFA. The new Annex 6 of the RSTP establishes a procedure by means of which all claims related to training compensation and the solidarity mechanism will be managed through TMS, which, according to FIFA, should lead to a more effective way of handling claims.[2] The new Annex 6 of the RSTP finally came into force on 1 October 2015. That means, as from 1 October 2015, all claims related to training compensation and the solidarity mechanism have to be submitted and managed through the FIFA TMS.       [1] As follows from FIFA Circular no. 1500, the current Annex 6 of the RSTP which governs the Rules for the Status and Transfer of Futsal Players, will continue as Annex 7 of the RSTP with its current wording unchanged as of 1 October 2015. [2] According to FIFA, the new system is closely related to the existing handling of applications in relation to the protection of minors.

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