A guide to the Portuguese Regulations of Intermediaries
Published 04 November 2016 By: Hugo Vaz Serra
Portugal is at the forefront of the global transfer market. According to FIFA’s TMS report for August 20161, the Portuguese market is placed fourth globally for incoming transfers (155 transfers) and fifth for receipts (USD 85,000,000) and expenses (USD 87,000,000). And while Portugal does not appear in the top 5 for outgoing transfers, the author believes that this could well change after the success of the national team (main squad and U21s) in the recent European Championships.
With this in mind, the author thought that it would be useful to explain Portugal’s domestic intermediaries regulations. Accordingly, this article looks at:
- Introduction to Portuguese Regulation of Intermediaries
- Definition of an “Intermediary”
- Registration process
- Registration requirements
- Payments/commission levels
- Assessment of reputation
- Conflicts of interest
- Prohibitions (who can’t act as an intermediary?)
Portuguese Regulations of Intermediaries
In April 2014, FIFA sent circular nº 1417 to its 211 affiliated members, containing the new Regulations on Working with Intermediaries (FIFA Regulations).2 As is well known, FIFA’s Regulations effectively repealed the existing regulatory regime of licenced football agents, and replaced it with the concept of “intermediaries” (explained below).3 National football associations were required to implement and enforce the new provisions, albeit they were reserved the right “to go beyond [the] minimum standards/requirements [set out in FIFA’s regulations]”.4
On 1 April 2015, the Portuguese Football Federation (FPF) put into force the new Portuguese Regulations of Intermediaries5 (hereinafter, the “Regulations”). The Regulations implement FIFA’s Regulations, while also taking into account the following Portuguese domestic laws: Law nº 28/98 (the legal framework on sports employment contracts6) and Law nº 5/2007 (basic laws on physical activity and sports7).
The key sections of the Regulations are as follows.
Definition of an Intermediary
An intermediary is a natural or legal8 person (e.g. a company) who is registered with FPF and who represents, pro bono or under remuneration, a footballer or a club in negotiations in order to conclude an employment contract or a transfer contract.9
Interestingly, under Article 22.1 of Law 28/98 and Article 37.1 of Law 5/2007, legal persons were already entitled to act as players’ agents. However, it was only after the Regulations came into force that legal persons were given an entirely even footing to natural persons.
The old “licenced” regime required an individual to pass a written examination before being issued a licence. This has now gone and has been replaced by a mandatory registration10, which is public.11 Registration may be requested for just one season,12 without prejudice of subsequent renewals.
Intermediaries can request that they be registered prior to the signing of a deal in which they are acting. If a company wishes to be registered, a natural person with powers to represent the company must previously be registered as an intermediary.13
Upon registration or subsequent renewals, the intermediary has to remit to FPF:
- a civil liability insurance policy14 to cover damages, in the minimum amount of EUR 50,00015;
- copies of the Id card/passport and the tax card16,
- a statement of honour affirming that they have no contractual relations with leagues, FA’s, confederations or FIFA that might cause a potential conflict of interest17;
- an updated certificate of criminal record18;
- a statement affirming that the requestor is not insolvent;19 and
- a certificate issued by the competent authority attesting that there are no overdue payables of tax and social charges20. All the documents must be written in Portuguese21; it must be paid a tax of EUR 1,00022>, being half of this amount delivered to the Wages Guarantee Fund23.
In the event of an employment contract (that is not made free of charge), the Regulations recommend a payment to the intermediary equal to 5% of the player’s gross wages during the contract.
In the event of a transfer, the Regulations recommend a payment to the intermediary equal to 5% of the transfer fee, and this percentage may also be calculated over conditional payments24.
In the author’s experience, commission on transfers has typically been between 5-10%, albeit higher sums have also been negotiated.
Assessment of reputation
Given the importance of the intermediary’s role, the Regulations place particular emphasis on ensuring that they have a suitable reputation.
As A. D. Carvalho states, intermediaries frequently conduct "the direct negotiations between the agent and the club, as well as the management, promotion and administration of the players’ career”25. Consequently, intermediaries are required to have an impeccable reputation26. The Intermediaries Commission (described below) assesses the reputation of all intermediaries prior to registration. Reputation can also be assessed after the registration process upon the request of a stakeholder27.
The assessment takes into account (but is not limited to) the disciplinary, sporting, and professional and record of the candidate.28 It also assesses criminal convictions, and there are specific convictions that are contrary to registration, most notably in connection with violence, racism, xenophobia, doping and match-fixing29.
The Intermediaries Commission is composed of two members nominated by the FPF (one of which is the President); a member indicated by the League; a member indicated by the Players’ Union; and a member indicated by the Agents Union.
Conflict of interests
The intermediary must declare that they have no contractual relationship with any football leagues, federations, confederations or FIFA that might generate a potential conflict of interest with their client.30 The intermediary must also declare that they do not and will not perform any of the functions of an “Official” as defined in FIFA Statutes (namely 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.31
Prior to signing with an intermediary, the club and/or the player must also use their best efforts to ensure that there are no conflicts of interests (either now or arising in the future)32.
The Regulations, in line with FIFA’s Regulations, give no mention to representation by either lawyers or by the parents, siblings or spouse of the player. In such cases, there is deemed to be a strong relationship between the parties. Any stakeholder (players, clubs, and also intermediaries themselves) may be advised by a registered Portuguese lawyer under a contract that complies with the normal requirements of Portuguese law.
The Regulations do not allow an intermediary to represent more than one party33. The Regulations do not prevent a party from being represented by more than one intermediary.
Prohibitions (Who can’t act as an Intermediary)
Article 25 of Law nº 28/98 prevents current footballers from acting as intermediaries.
As noted above, the Regulations also prohibit a person from acting as an intermediary if they do not meet the reputational requirements; if they have a conflict of interest; or if they perform the role of an Official as defined in the FIFA Statutes.34.
The Regulations place importance on the signing of a representation contract between the player and the intermediary.35
The FIFA Regulations do not expressly limit the legal nature of the relationship between clubs/players and intermediaries. In Portugal, however, the services to be provided by the intermediary are deemed to be defined solely by the terms of the relevant representation contract between the parties (be that a transfer contract and/or a sport employment contract). The regulations stipulate the minimum content of the contract as follows:
- identification of the parties;
- subject and nature of the services to be provided;
- duration of the contract (which shall be no longer than two years36, and cannot be extended automatically);
- intermediaries’ remuneration (if any);
- payment conditions;
- date of signature;
- release clause (if any); and
- if the player is a party to the contract, his/her signature must be notarized.
Article 6 of the FIFA Regulations obliges players and clubs to disclose and publish certain information relating to their dealings with intermediaries. These obligations are transposed into the Portuguese Regulations. Therefore, every year, at the end of March, the FPF makes public through its institutional website the names of the registered intermediaries as well as the transfers subject to intermediation.
From the information published to date we see that Portugal’s “big three” clubs are far ahead of the others when it comes to transfer dealings. In 2015-16, Futebol Clube do Porto paid EUR 11,789,500 to intermediaries, Sport Lisboa e Benfica paid EUR 10,040,000 and Sporting Clube de Portugal paid EUR 4,022,00037.
When it comes to footballers, nine players paid commission to intermediaries, worth a sum amount of EUR 65,80038.
The transfers that occurred in the most recent transfer window of July/August 2016 will be made public at the end of March 2017
FIFA aims to protect minors’ (i.e. those under 18), with special focus on those young sportsperson aiming to develop a professional career (see Article 19 of the FIFA Regulations on Status and Transfer of Players). The FIFA Regulations reflected this by prohibiting payments to intermediaries for the transfer of minors.39
In this respect, the Portuguese Regulations are stricter as they take into account domestic Law 7/200740 and declare that an intermediary cannot represent a minor41.
During the past few decades, the term “FIFA Agent” was commonly used to refer to the person(s) acting as agent in a transfer.
The Regulations are quite clear in stating that the use of trademarks, logos and other signs of FPF is strictly forbidden, with the exception of the motto “intermediário registado na FPF” during the period the registration is valid and in force42.
Intermediaries are subject to the disciplinary intervention of the FPF, who may sanction the intermediary for a disciplinary offence.
One of the more severe sanctions that the FPF may use applies to an intermediary who acts simultaneously for the player and the club in a transfer. In such a case, the sanction shall be a registry suspension for a period of 1 - 3 seasons. Equal punishment will be applied to those who use the brands, logos and trademarks of the FPF.
In the case of a dispute between a stakeholder and an intermediary, the Regulations do not provide for a specific dispute resolution chamber. In general, therefore, the parties are free to state in the representation contract a competent tribunal of their choice, for example the Portuguese Court of Arbitration for Sport.
If the parties fail to include a jurisdictional clause in their contract, Portugal’s civil courts are competent to hear any claim arising out of the contract (e. g. claims in connection with payments).
The Regulations do however state that the parties may request the intervention of the Intermediaries’ Commission, which may offer assistance upon request (although the author is not aware of this option being used as yet)43.
T. Misic stated “FIFA has not deregulated the activity, but rather shifted the scope of the regulation itself44”. Nearly nineteen months after the entry into force of the Regulations, people in Portugal are now relatively familiar with them and they have in general been well transposed into the Portuguese system.
In the author’s view, there remains the potential to amend some points of the Regulations most notably in relation to:
- the representation of footballers with 16 and 17 years old – the author would like to see the Article 37.2 of Law 5/2007 amended in order to authorize the intermediaries to act as representatives of the professional footballers with 16 or 17 years old.
- the insurance policy of 50,000 EUR - the author suggests that the insurance policy should not be mandatory, but merely optional, taking into account that the Regulations recommend that a club or player wishing to hire an intermediary shall act with due care.
- the term of the representation contract – the author would like to see a termination provision, as suggested by the FIFA Regulations, rather than a maximum duration of 2 years. Most times, the intermediation is connected with just a sole transfer; but what happen if a player and/or a club wish to have an agent working while the employment contract is in force?
At the end of the day, it might be a possibility that new people start to act as intermediaries, but certainly those who used to act as FIFA agent are far away from being retired. They are now just starting to use the mark Intermediário registado na FPF.
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- Tags: Contract | Employment | FIFA | FIFA Regulations on Status and Transfer of Players | FIFA Regulations on Working with Intermediaries | FIFA TMS | Football | Portugal | Portuguese Court of Arbitration for Sport | Portuguese Football Federation (FPF) | Portuguese Regulations of Intermediaries
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Hugo is currently a sports lawyer in Portugal, focusing his main activity in sports law and management. He is also an Arbitrator at the Portuguese CAS. Previously, he acted as an in house lawyer at leading Portuguese club Sporting Clube de Portugal for more than 11 years and was also the club’s TMS Manager (since the early days of this FIFA platform). In his activities at the club he regularly dealt with the Portuguese Football Federation, Portuguese Football League, UEFA, FIFA, CAS, as well as many foreign clubs.