Training compensation and solidarity contribution for Brazilian transfers

Published 05 July 2012 | Authored by: Nilo Effori

In March 2011 the so called Pele Statute Federal Statute (n. 9.615/98 Art 29-A) established a legal means to calculate and claim solidarity contributions in Brazil. This was largely influenced by the FIFA Regulations on the Status and Transfer of Players (“RSTP”).1 The new rules aim to improve the system of compensation for training and education within Brazil. This article examines the construction of training compensation and solidarity contributions under the amended Pete Statute. 

Training Compensation – Article 29 of the Pele Statute

In Brazil a player between 14 and 20 years old can be registered as an amateur and receive a so called “bolsa aprendizagem” i.e. “football scholarship” (standards for the training and education for young players) and be eligible to play in tournaments sanctioned by the State Federation.2

FIFA training compensation can commence on a player’s 12th birthday whereas in Brazil the calculation of cost of training of a player starts on their 14th birthday.3 In Brazil, under Article 29 the club that trains the player has the right to sign the first professional contract with the player from his 16th birthday. If the player opposes to sign this and signs a contract with other football club training compensation shall be paid to the player’s former club (Article 29 para 5). 

The Statute sets out the criteria for a club to be considered a “training club” entitled to training compensation (Art 29 para 2):

  • The Brazilian football clubs shall provide training programs and educational assistance to the players. Therefore, along with the training sessions, the player must attend the national educational program and his attendance must be satisfactory4;
  • A player has to be registered with the club for at least one year. However, this was considered an unfair decision during the discussion to amend the Statute. If the player is registered for less than one year the club will receive compensation proportional to the length of time the player has been trained by the club. 
  • The club must prove that the player has been registered to play in official competitions and been provided with educational, psychological, medical and dental assistance, and food, transport and family life.5
  • Finally the club must ensure adequate housing and sports facilities, especially for food, hygiene and safety and provide with professionals specialised in sports training. It is forbidden to charge any fee from the player.
  • The Brazilian football association, CBF, issues a “training certificate” after the football club submits documents proving that all requirements were fulfilled. There are two grades of certificate (i) “A” for those which have proved to be beyond the minimum requirements with validity of two years and (ii) “B” for those which reached the minimum requirements with validity of one year. 
  • According to the FIFA RSTP Art 2 para 1 Annex 4, there are two situations
  •  where the training compensation is due:
  1. Where a player is registered for the first time as a professional; and 
  2. Where a professional is transferred between clubs of two different associations (whether during or at the end of his contract) before the end of the season of his 23rd  birthday.

In Brazil, where the football club has the “training certificate”, there is only one situation that gives rise of training compensation; that is where a player rejects to sign his first professional contract  with his current football club and signs for  another Brazilian club without authorisation, as mentioned above.

The responsibility to pay training compensation inside Brazil rests with the new club with whom the player signs his first professional contract, as in the FIFA RSTP.6 Art 29 places an obligation on the Brazilian club to mention, in the training contract, detailed expenses linked to a players’ training and education. 

Article 4 Annexe 4 of FIFA RSTP states that to calculate the compensation due for training and education costs, associations are instructed to divide clubs into a maximum of four categoriesaccording to the clubs’ financial investment in training players. Nevertheless, the FIFA circular 1299 presents basic training costs based on the category of the club and the confederation that such club belongs to. It is an simple and fair way to determine quickly the amount of training compensation. Exceptions can be made if there is a disproportionate amount related to the training costs.8

The calculation of the training costs in Brazil is based on the amounts expressed in the “training contract” related to the expenses with the player multiplied by two hundred (Art 29 para 5). 

The due date for this payment to the former Brazilian club is 15 days after the signature of the professional contract with the new Brazilian football club, not 30 days as established for FIFA training compensation. If the new club fails to pay the training compensation in due time, this may prevent the registration of the player in question.

It is an important development in Brazilian football that training compensation has been established with rules that will prevent the big Brazilian football clubs taking young players away from the small Brazilian football clubs that have invested time and money in developing them.

Solidarity contribution – Article 29-A of the Pele Statute

The amendment of the Pele Statute introduced the institute of solidarity contribution between Brazilians football clubs for the transfer of football players within Brazil. The institute of solidarity contribution is established in the Regulations, Article 21 and Annexe 5 of the FIFA Regulations. In this document, if a player moves from one football club to anotherduring his contract, 5% will be deducted from the transfer compensation and distributed by the new club to the former clubs where the player was registered from 12 to 23 years old.

Article 29-A of the Pele Statute states that, “whenever there is a domestic transfer, definitive or on loan basis, of the professional player, up to 5% of the amount paid by the new football club must be distributed between the football clubs that contributed to the training and education of the player.”

The rule is similar, but not identical to, the FIFA RSTP with the percentages and age range that apply differing. The FIFA Regulations cover players between the age of their 12th to 23rd birthdays ( Art 1 Annexe 5 ). The percentage for each year of training is 5%. Whereas in Brazil, the player starts his training and education in football on his 14th birthday. The annual percentage of solidarity contribution is 1% up to a players 17th birthday and from the 18th to 19th birthdays the percentage increases 0.5%. Training compensation in Brazil can be paid until the player’s 20th  birthday, however the solidarity contribution ends at the 19th birthday. Paragraph 1 of the present Article sets that the new club10 must retain the 5% and distribute to the Brazilian football clubs which have contributed to the player’s training and education. 

In the situation that a player himself exercises the buy-out clause to release his registration from a Brazilian football club, it’s the obligation of the former club, not the new one, to distribute the amount of solidarity contribution to the former clubs.11 The former or new club must send the compensation payment within 30 days of the transfer. This is the case in the Pele Statute and the FIFA Statues sets as well.

There is no designated sports chamber to settle the cases of this nature in Brazil and therefore the civil court will most likely adjudicate should there be a dispute. 

Conclusion

The amendment of the Pele Statute and the improvement of the rules for transfers inside Brazil benefits the “training clubs”. Unfortunately the Pele Statute did not state any particular sports chamber to settle disputes regarding training compensation and solidarity contribution, unlike FIFA with their Dispute Resolution Chamber, which means that it will be probably solve be a matter for the civil courts. This will increase the time to obtain the final decision which will be detrimental to small clubs that do not have the money to replace key players.

The document to prove that a Brazilian club is entitled to receive the solidarity contribution will be the player’s passport issued already by the Brazilian Football Association, this will be the training contract itself.

These modifications will improve both professional and amateur football in Brazil. This will draw more attention from investors in player’s academies with the intention of advancing Brazilian football.

 


1 In reference to the most Brazilian footballer Mr. Edson  Arantes do Nascimento (Pelé), Ministry of Sport at the time the Statute was enacted.

2 In Brazil we have 27 States and each State has its own Federation to organize some competitions during the year.

3 To avoid any misunderstanding, the age of 14 is in accordance with ECA (Children and Young Statute) where it is allowed to start as a learner or internship with this age.

4 The training cannot exceed four hours per day and ensure that period does not coincide with school period.

5 The Statute did not define the meaning of family life which leaves it open for discussion during a claim.

FIFA Regulations on Status and Transfer of Players, Article 3 of Annexe 4

7 All National Football Associations are requested every year to proceed with the categorisation of its affiliated clubs.

Article 5, paragraph 4, Annexe 4 of “The regulations”

International transfer.

10 The same is determined in “The Regulations”, Annexe 5, Article 2, paragraph 1.

11 Article 29-A, paragraph 2 of the Pele Statute.

About the Author

Nilo Effori

Nilo Effori

Nilo is the founding partner of Effori Sports Law (Effori Sociedade de Advogados), a boutique law firm based in São Paulo and London, specialising entirely in all manner of international sports disputes.

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Comments (1)

  • Adam

    13 July 2012 at 17:59 | #

    Nice to have more information on Brazil's domestic training compensation and solidarity mechanisms. Because Brazil is the world's largest exporter of players, I would like to know more about disputes between clubs in Europe and Brazil over FIFA RSTP Art. 20-21.

    Here in the United States we do not yet have a domestic system which allows for training clubs to benefit when their players are signed by richer clubs. It also appears that our clubs are unwilling to pay or collect training compensation and solidarity per FIFA RSTP Art. 20-21. However as American football (soccer) improves and more players leave to and arrive from Europe, surely there must be some enforcement of these provisions in the future.

    reply

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