The FIFA Clearing House
Introduction
The FIFA Clearing House (“FCH”) aims to promote greater transparency and integrity within the international player transfer system by acting as an intermediary for the payment of Training Rewards. Upon instruction by the FIFA administration, the FCH processes, centralises and automates the payment of Training Rewards between clubs. It is envisaged that the FCH will eventually also manage the payment of agents’ fees and, possibly, transfer fees as well.
The FCH’s success is of paramount importance for training clubs across the globe. As a hotbed of footballing talent, African clubs and federations in particular can leverage their development of young players to promote the evolution of football and its governance across the continent. The only question is whether the African footballing landscape is prepared for that transition.
Training Rewards
In discussing the FCH, one must first address “Training Rewards”, which encompass Training Compensation and Solidarity Contributions.
Training Compensation refers to the money paid by a player’s new club to the club(s) which trained that player between the ages of 12 and 21. It is due to each of the player’s former training clubs when that player is first registered as a professional. Once the player is registered as a professional, Training Compensation will be due to their most recent training club each time the player is transferred internationally. The entitlement is further subject to the first registration or international transfer occurring before the end of the calendar year of the player's 23rd birthday.
If a player is transferred to a new club before the expiry of their current contract, any club which contributed to that player’s training and education between the ages of 12 and 23 will additionally receive a portion of the relevant transfer fee. This is known as a Solidarity Contribution.
What are the objectives of the FIFA Clearing House?
According to FIFA’s estimates, only one fifth of the Training Rewards due to clubs are actually paid out. This means that, most of the time, clubs which invest in training young players are ultimately not compensated for the value they create. The FCH aims to bridge this gap and ensure the fair distribution of funds between clubs.
How does the FIFA Clearing House work?
The FCH’s operation is contingent upon elements within FIFA’s Transfer Matching System (“TMS”) and national federations’ electronic transfer and registration systems.
First, national federations' electronic systems must be integrated with the relevant FIFA platforms. Clubs must then ensure that their players are electronically registered at their national federation from the age of 12, and that each player’s career information (e.g., change of status, transfers, loans, etc.) is kept up to date.
Training Reward triggers (i.e., a player’s first registration as a professional or their national or international transfer) are subsequently identified through the interaction of various systems (i.e., TMS and/or national federations’ electronic systems) with the relevant FIFA platforms. This mechanism also generates the player’s Electronic Player Passport (“EPP”).
The player’s final EPP, which is determined following a review by the clubs and national federations concerned, sets out the player’s registration history from the age of 12 and forms the basis for the Allocation Statement (“AS”), which is shared with the FCH. Based on the AS (and following a compliance assessment of the player’s new and old clubs) the FCH issues a payment notification to the new club for the appropriate Training Rewards. Upon receiving this payment, the FCH immediately distributes it among the player’s old clubs.
The FIFA Clearing House in Africa
In line with FIFA’s mission statement, the FCH seeks to make football “truly global”, yet its implementation in Africa is faced with local obstacles.
Knowledge gap
Prior to the FCH’s implementation and up to the present day, most clubs in Africa were unaware of the existence of Training Rewards and their entitlement thereto. This remains a major contributing factor to the discrepancy between the Training Rewards owed and those ultimately received by clubs, as many clubs never claim Training Rewards in the first place.
The FCH seeks to remedy this by automatically requesting Training Rewards on clubs’ behalf. In order to benefit from this automation, however, clubs must be made aware of, and meet, the FCH’s compliance and player registration requirements.
Incentivising evolution
Grassroots football in Africa generally operates on an archaic and informal basis. “Neighbourhood” clubs, which compete outside their domestic football pyramid, develop hundreds of young African players across all age groups. However, as these clubs are not affiliated with their national federation, many of those players are not registered in organised football until their professional debut.
Since they are not affiliated with their national federation, “neighbourhood” clubs are not entitled to Training Rewards for the training they provide to players from the age of 12. The payment of any Training Rewards to “neighbourhood” clubs must therefore be agreed with the relevant affiliated club and will be entirely discretionary. Furthermore, for an affiliated club to receive Training Rewards for the time a player spent with a “neighbourhood” club, the player’s date of registration with the affiliated club would need to be back-dated to when the player actually joined the “neighbourhood” club. This would constitute an abuse of the system, which is punishable under both the FCH Regulations and the FIFA Regulations on the Status and Transfer of Players.
In any case, payments from an affiliated club to a “neighbourhood” club would need to be executed outside FIFA’s system, meaning that any amounts ultimately received by the “neighbourhood” club would also certainly be lower than what the regulations would offer them.
The FCH could therefore entice “neighbourhood” clubs to regularise their position and become affiliated members of their national federation, allowing them to gain access to Training Rewards in accordance with the applicable regulations of organised football (subject to them meeting the relevant player registration and compliance requirements).
In this respect, the FCH can also promote greater integrity in African football by preventing the back-dating of player registrations and other potentially fraudulent practices.
Missing infrastructure
Since the adoption of the FCH, affiliated clubs can no longer claim and receive Training Rewards from one-another independently. It might therefore be argued that FIFA has placed the proverbial cart before the horse, as African football has not yet reached the stage where it is able to reap the benefits offered by the FCH.
Still, if a club fails the FCH’s compliance checks, the Training Rewards will be paid to its national federation for the development of football at a national level. This remedy is conducive to the general evolution of African football, although it does mean that clubs cannot build on their success in player development as they will not be compensated commensurately with the value they create.
Conclusion
While African football may lack the requirements for its seamless implementation, the FCH does provide a powerful incentive for clubs and national federations alike to modernise their practices in player development and the handling of registration data.
To this end, FIFA must ensure that the FCH’s continued roll-out is accompanied by the necessary information and training to guarantee that all clubs are made aware of Training Rewards and how to access them.
Authored By
Achta Mahamat Saleh
Of Counsel
Omar Ongaro
Of Counsel
Marko Lavs
Paralegal