The Colombian Regulation on Working with Intermediaries (Demo)

International Sports Law and Policy Bulletin 1/2015
By: César Giraldo*

  1. Introduction

It is no secret that one of the most important FIFA goals is to improve the game of football and to safeguard its worldwide integrity.

In this context, during the 59th FIFA Congress celebrated in 2009, FIFA decided to reform the players’ agents system by establishing an “Intermediaries” concept, with the intention of implementing a more transparent and simpler system. As a result , on the 20 and 21 May 2014, the New Regulations on Working with Intermediaries (hereinafter, the “New Regulations”) were approved and began to operate.

According to the New Regulations, FIFA requires each Federation to enact its own regulations related to intermediaries. Such regulations should establish minimum standards to rule and bind the players, clubs, intermediaries and all the parties involved in footballs transaction.

The Colombian Football Federation (hereinafter, the “CFF”) issued, within the period granted by FIFA, Resolution 3330 of March 31, 2015. This resolution established the CFF Regulation on Working with Intermediaries (hereinafter, the “Regulation”) in line with FIFA’s Circular Number 1417 and articles 1.2, 1.3 and 10.1 of the New Regulations.

  1. Relevant national law

The Regulation supersedes the CFF Players’ Agents Regulations and entered into force on April 1, 2015.

The legal framework governing the activity of Intermediaries is supplemented by the following national laws:

A) Colombian sports law (Law 181/1995) which does not, however, contain any 
specific provision concerning player or club representatives.

B) The Colombian Civil Code, which regulates the representation activities through the “mandate contract” established in article 2142. This article provides that: The mandate is a contract by means of which a person trusts the management of one or more businesses to another that will be in charge of them but by 
account and risk of the first one”.

Article 2144 extends the mandate rules to other professions and careers 
as stated below:

“The services provided by professionals that include the power to act on behalf of others, are held to the rules of the mandate”.1

The application of the mandate is related to the possibility of representing and acting on behalf of another person. Therefore, with regard to the negotiations and transfers of players by intermediaries, and applying the definition of mandate from Colombian Civil Code, it is possible to conclude that, according to Colombian law, this contract should be legally accepted for the negotiations and transfers of players by third parties.

  1. Principles

The principles of the Regulation2 are established in Article 2 of the above, which is divided into four main points.

The first principle established in Article 2.1, refers to the right of players and clubs to engage the services of intermediaries for negotiations, re-negotiations, and transfers.

Article 2.2 then states that “players and clubs shall use reasonable endeavours to ensure that the intermediaries sign the Intermediary Declaration and the representation contract concluded between the parties”.

As a third principle, Article 2.3 requires that the intermediary be registered before the CFF if he is involved in the transfer of a player.

Finally, Article 2.4 prohibits “officials” from acting as intermediaries of players and clubs.3

  1. Definitions

The Regulation defines an intermediary as “A natural or legal person who, for a fee or free of charge, represents players and/or clubs in negotiations and renegotiations with a view to concluding an employment contract or represents clubs in negotiations with a view to concluding a transfer agreement”.

From my point of view, one of the biggest changes brought by FIFA is the authorisation of legal persons to now act as intermediaries. In that regard, it is worth noting that the last players’ agents regulations only allowed natural persons to be agents. Today, if a legal person (i.e. a company) fulfils the requirements foreseen by FIFA and the CFF, they are entitled to represent the interests of both clubs and players.

  1. Registration

According to Articles 3 and 4 of the Regulation, there are two types of registration. The first is strictly related to the registration of intermediaries, while the second refers to registration of the agreements signed between intermediaries and players and/or clubs, which must fulfil the requirements and conditions mentioned under the following title.

  1. Requirements and conditions

According to Article 3, six important requirements must be met in order to be registered as an intermediary before the CFF. These are:

  1. Judicial Certification (Background Certification) issued by an authorized entity 
within the last 90 days: The relevant authority issuing this document is the Colombian Police and the certificate can be requested by internet via the following link: https://antecedentes.policia.gov.co:7005/WebJudicial/.
  2. Documents issued by two renowned persons related to the football family, certifying the respectability of the candidate to be an intermediary (Impeccable Reputation).
  3. Written certifications issued by: (a) The CFF, DIMAYOR and DIFUTBOL,4 establishing that the candidate for intermediary does not hold any position within a professional or amateur club, league or organization related thereto and; (b) an affidavit in which the intermediary states that he does not hold any relationship with FIFA or COMEBOL. From my point of view, these requirements are strictly related to Article 2.4. of the Regulation, which establishes the prohibition for an official to act as an intermediary.
  4. An Intermediary declaration duly signed pursuant to Annex 1 or 2 of the Regulation.
  5. Certification of payment of the registration fee, depending on whether the application comes from a natural person or a legal entity. For this requirement, there are two conditions:

a) For natural persons: five minimum wage salaries for the 2015 period. (Approx U$D 1,073).5

b) For legal entities: seven minimum wage salaries for the 2015 period. (Approx U$D1.503).

The Regulation allows the registration of legal entities as intermediaries; nevertheless there are some specific requirements that must be fulfilled:

a)  The person with authority to legally represent the entity must previously have 
been registered as an intermediary.

b)  The legal representation certificate issued by the respective Chamber of 
Commerce within the last 90 days must be presented.

For the registration procedure, the Regulation establishes that applications 
can only be submitted during two periods of the year, which are posted on the CFF web page. Consequently, late or otherwise untimely applications shall be rejected.

Finally, according to Article 6.3 of the New Regulations, at the time of registration the intermediary must sign Annex 3 (which is related to the treatment of personal data), in order to authorize the CFF to collect and manage his, her or its information.

With respect to the requirements and conditions of the representation contracts, as mentioned in the FIFA regulations, clubs and players shall specify in the relevant representation contract the nature of the legal relationship they have with their intermediaries (i.e. a service, a job placement or any other legal relationship).

In addition, the key elements of the legal relationship between a player and/or a club and an intermediary shall be recorded in writing prior to the commencement of the activities by the intermediary. The representation contract must contain, as a minimum, the following elements:

–  The names of the parties.

–  The scope of services.

–  The duration of the legal relationship.

–  The remuneration due to the intermediary.

–  The general terms of payment.

–  The date of conclusion.

–  The termination provisions, and

–  The signatures of the parties.

It is important to highlight that if the player is a minor, the player’s legal guardian(s) must also sign the representation contract according to Article 302 of Colombian Civil Code.6

  1. Impeccable reputation

As mentioned before, Article 3.1.2 of the Regulation establishes that in order to prove the candidate’s impeccable reputation, he must present documents issued by two renowned persons related to the football family, certifying his respectability.

In my opinion, this requirement is ambiguous due to:

  1. The phrase “People that are related to football” allows a very open interpretation as to exactly who is related to football. Nowadays, there are many companies and people from different branches giving advice (i.e. legal, merchandising, finances). In that respect and according to the Regulation, any of these companies or their legal representatives are entitled to recommend people as intermediaries, and from my point of view the national federations are obliged to accept such recommendation.
  2. The concept of “Impeccable reputation” should be defined in the Regulation in order to avoid subjective views.
  1. Conflicts of interest

Regarding Conflicts of Interest, the Regulation has the same provisions as the New Regulations, which are divided into four main points as follows:

  1. Article 8.1 establishes that both players and clubs should use reasonable 
endeavours to ensure that there are no conflicts of interest.7
  2. Article 8.2 provides that there is no conflict of interest if the intermediary, by written letter, informs of any possible conflict of interest he might have with the parties involved in the negotiations, transactions, etc. and, as a result of 
that, receives written consent from all the parties. 8
  3. Article 8.3 provides for the possibility for the club and the player to use the 
same intermediary. For this purpose, the player and the club concerned shall give their express written consent prior to the start of the relevant negotiations and shall confirm in writing which party (player and/or club) will remunerate the intermediary.
  4. Finally, Article 8.4 states that “the parties shall inform the CFF of such agreement and submit all the aforementioned written documents within the registration process”.

9. Intermediaries’ obligations

According to the Regulation, intermediaries are obliged to:

  1. Be registered before the CFF if the intermediary is involved in a transaction 
(Article 2.3).
  2. Fulfil the requirements of Annex 3 of the Regulation, which is related to the 
treatment of personal data (Article 3.8).9 This document authorizes the CFF to publish the following info:

– Full name.

– Any transaction that the intermediary has made.

– The total remuneration that the player and/or the clubs has paid to the intermediary.

– Any decisión related to the intermediary (disciplinary or any other subject).

From my point of view, the CFF by including this authorization in the 
Regulation is fulfilling the requirements of Colombian Habeas Data law. Furthermore, this information is considered as sensitive data because it is related to the transactions and remunerations of the intermediary.

Notwithstanding the above, the CFF has decided not to publish some information related to the remuneration of the intermediaries.

  1. Remuneration

Article 7 of the Regulation regulates payments to intermediaries. The only difference between the Regulation and the New Regulations is the addition of sub-article 7.2., which permits an exemption for the payment for the services of an intermediary.

As a general rule and according to Article 7.6 and Article 8 of New Regulations, any payment for the services of an intermediary shall be made exclusively by the client of the intermediary. However, under the Regulation, the player can sign a letter authorizing the new club to deduct the payment of the intermediary from his salary.

The following are the main points to take into account regarding the remuneration of the intermediaries.

  1. Article 7.1. of the Regulation states that the amount of remuneration due to an intermediary who has been engaged to act on a player’s behalf shall be calculated on the basis of the player’s basic gross income for the entire duration of the contract with the new club.
  2. Article 7.3 states that “Clubs that engage the services of an intermediary 
shall remunerate him by payment of a lump sum agreed prior to the conclusion of the relevant transaction. If agreed, such a payment shall be made in instalments”.
  3. Article 7.4. recommends to not exceed 3% of the player’s basic gross income for the entire duration of the relevant employment contract, and also the eventual transfer fee which will be paid in connection with the transfer of the relevant player.10
  4. Article 7.5 states that clubs must ensure that payments related to transfer compensation, training compensation or solidarity contributions are not paid to intermediaries. From my point of view, the FIFA and CFF Regulations included this article in order to guarantee this money remain in clubs and avoid the involvement of third parties in these types of operations. 
The final sub-article of Article 7 highlights the following aspects:

–  Any payment for the services of an intermediary shall be made exclusively by the client of the intermediary to the intermediary except if the exception 
mentioned above is applicable.

–  Article 7.8 mentions again that officials cannot receive any payment from an 
intermediary. Any official who receives any kind of payment will be subject to disciplinary sanctions.

Finally Article 7.9 contains the prohibition of players and clubs to pay an intermediary that negotiates an employment contract and/or a transfer agreement of a player who is a minor.11

  1. Disciplinary powers and sanctions

Article 9 of the Regulation establishes that the CFF, acting as the competent body, will impose all sanctions related to violations or infractions of the rules. On this point, it is important to highlight that the CFF never mentioned which internal competent body should settle disputes concerning this matter.

  1. Conclusion

At the outset it is interesting to note that CFF was one of the first football associations across the world to implement the relevant New Regulations. I want to congratulate the CFF Legal team for its success in this matter.

I/We also believe that this new regulation is a wake-up call for FIFA and for the people involved in the sports world. The previous player’s agent system failed, and, in my opinion, was due to the reasons mentioned below:

  • Lack of control: In the previous regulations, there was no control over the agents. During those years, many agents did not follow the rules and FIFA permitted too many violations without imposing any sanctions.
  • FIFA jurisdiction?: In the previous regulations, there were exemptions from the legal requirements applicable to agents (i.e. lawyers, family of the player, among others). Those exemptions brought many difficulties to FIFA because such persons were not under FIFA’s jurisdiction and were thus able to act under different conditions from those applicable to the duly registered agents.
  • Unfortunately, there are many examples that show that the past rules were broken, including a lack of transparency in some transactions. Therefore, all people involved in the world of football must follow the rules given by FIFA and by the relevant Federation. We hope that with the new Regulations clubs, intermediaries and players in Colombia will respect the new rules in order to obtain better results.

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* Partner in GHER & Asociados Abogados, Bogotá (Colombia), www.gherasociados.com, e-mail: cgiraldo@gherasociados.com. I wish to thank our sports legal team (María Alejandra Rodríguez, Carlos Buitrago, Elizabeth Gonzalez and María Paula Garcia) for all the support given to write this article. I would also like to thank the editor, Michele Colucci, for the invitation to write about the Colombian regulation on working with intermediaries. For the first time, Colombia is participating in these types of global studies in sports law and for my team and I, it is an honor to be the first representatives to write on this topic.

1 Free translation.

2 For purposes of clarity, the Regulation is a free translation into English.

3 For the sake of clarity, an official is defined according point 11 of the definitions given in the FIFA statutes as “every board member, committee member, referee and assistant referee, coach, trainer and any other person responsible for technical, medical and administrative matters in FIFA, a Confederation, Association, League or Club as well as all other persons obliged to comply with the FIFA Statutes (except Players and intermediaries). In addition, according to article 20.14 of the Disciplinary code of CFF, an official is defined as all persons linked to CFF, performing activities in its divisions, clubs, or leagues, managers, coaches etc. (except players). This two definitions are taken into account according the Regulation.

4 For the sake of clarity, Dimayor (according to its statutes) is the entity that manages, organizes and rules the different professional football championships in Colombia. Difutbol is the football division in charge of amateur football.

5 According to article 3.6.1. of the Regulation, all agents previously registered in the CFF that met the past regulations (i.e. payment of insurance, no sanctions) are exempt from this payment.

6 The requirements mentioned above are established in article 5 of the Regulation.

7 According to the article “Prior to engaging the services of an intermediary, players and/or clubs shall use reasonable endeavors to ensure that no conflicts of interest exist or are likely to exist either for the players and/or clubs or for the intermediaries”.

8 Specifically, “No conflict of interest would be deemed to exist if the intermediary discloses in writing any actual or potential conflict of interest he might have with one of the other parties involved in the matter, in relation to a transaction, representation contract or shared interests, and if he obtains the express written consent of all the other parties involved prior to the start of the relevant negotiations”.

9 This article is linked to the fundamental right of Habeas Data, which is contained in article 15 of the Colombian Constitution. For the sake of clarity, Habeas Data establishes the right of any person to require an update of his/her personal information, and to require a rectification of such information. Under Law 1581 of 2012, Habeas Data has been classified as sensitive data, because it affects the privacy of the holder of the information. To use this category of data, the potential user must be expressly authorized by writing by the owner or titleholder of the information. This document must precede the publication or use of the information.

10 For the sake of clarity, the percentage used in this type of transaction in Colombia is approximately 10%.

11 According to point 11 of the Definitions section of the FIFA Regulations on the Status and Transfer of Players, a minor is a player who has not yet reached the age of 18.

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