Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

International and European Sports Law – Monthly Report – November and December 2016. By Saverio Spera.

Editor’s note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked. 

The Headlines

The Russian State Doping Scandal and the crisis of the World Anti-Doping System

Russian doping and the state of the Anti-Doping System has been the dominant international sports law story in November and December. This is mainly due to the release of the second report of the McLaren’s investigation on 9 December 2016. The outcome of McLaren’s work showed a “well-oiled systemic cheating scheme” that reached to the highest level of Russian sports and government, involving the striking figure of 30 sports and more than 1000 athletes in doping practices over four years and two Olympic Games. The report detailed tampering with samples to swap out athletes’ dirty urine with clean urine.More...

FIFA’s provision on the protection of minors - Part 3: The compatibility of Article 19 with EU law. By Kester Mekenkamp.

Editor’s note: Kester Mekenkamp is an LL.M. student in European Law at Leiden University and an intern at the ASSER International Sports Law Centre. This blog is, to a great extent, an excerpt of his forthcoming thesis, which he shall submit in order to complete his master’s degree.

This final blog aims to provide some broader perspective, by sketching first the grander scheme in which Article 19 RSTP – FIFA's provision on the protection of minors – operates. Thereafter, the focus will shift towards testing Article 19 RSTP, thereby keeping in mind the previous blogs (Part 1: The Early Years and Part 2: The 2009 reform and its aftermath), against EU free movement law.  

Putting Article 19 RSTP into perspective: The bigger picture

After having investigated the nuts and bolts of FIFA’s provision on the protection of minors in the first two parts of this blog, it might be useful to address its bigger picture.

Article 19 RSTP and its accompanying provisions regulate only a small share of the targeted activity. There is, unfortunately, also an illegal world. Circumvention of the prohibition is allegedly commonplace.[1] Visas and passports can be falsified.[2] Work permits can be obtained on the basis of jobs arranged by clubs.[3] More...

FIFA’s provision on the protection of minors - Part 2: The 2009 reform and its aftermath. By Kester Mekenkamp.

Editor’s note: Kester Mekenkamp is an LL.M. student in European Law at Leiden University and an intern at the ASSER International Sports Law Centre. This blog is, to a great extent, an excerpt of his forthcoming thesis, which he shall submit in order to complete his master’s degree.

This is the second part of a three-piece blog on FIFA’s provision on the protection of minors, Article 19 of the Regulations on the Status and Transfer of Players. The contribution in its entirety aims to provide an encompassing overview of the rule’s lifespan since its inception in 2001. The previous (first) part has shed light on the “birth” and “first years” of the provision, and as such illustrated the relevant developments from 2001 till 2009. This second part covers the rule’s “adolescent years”, which span from 2009 to the present. The major changes put forward in the 2009, 2015 and 2016 versions of the RSTP will be addressed. Thereafter the important CAS decisions concerning Article 19, Muhic, Vada I and II, FC Barcelona, RFEF, and the FIFA decisions relating to Real Madrid and Atlético Madrid, will be scrutinized. The third, and final, part will constitute a substantive assessment of the provision under EU Internal Market law.

Given that the version adopted in 2008 left Article 19 untouched, the 2009 RSTP represented the next significant step in the regulation of the protection of minors. It had become clear that the system as used up to that point was inadequate to achieve its goal,[1] most notably because several national associations still neglected to strictly apply the rules.[2] More...

FIFA’s provision on the protection of minors - Part 1: The Early Years. By Kester Mekenkamp.

Editor’s note: Kester Mekenkamp is an LL.M. student in European Law at Leiden University and an intern at the ASSER International Sports Law Centre. This blog is, to a great extent, an excerpt of his forthcoming master thesis. 

On 24 November 2016, a claim was lodged before a Zurich commercial court against FIFA’s transfer regulations by a 17-year-old African football player.[1] The culprit, according to the allegation: The provision on the protection of minors, Article 19 of the Regulations for the Status and Transfer of Players.[2] The claimant and his parents dispute the validity of this measure, based on the view that it discriminates between football players from the European Union and those from third countries. Besides to Swiss cartel law, the claim is substantiated on EU citizenship rights, free movement and competition law. Evidently, it is difficult to assess the claim’s chance of success based on the sparse information provided in the press.[3] Be that as it may, it does provide for an ideal (and unexpected) opportunity to delve into the fascinating subject of my master thesis on FIFA’s regulatory system aimed at enhancing the protection of young football players and its compatibility with EU law. This three-part blog shall therefore try to provide an encompassing overview of the rule’s lifespan since its inception in 2001. More...

The entitlement to Training Compensation of “previous” clubs under EU Competition Law. By Josep F. Vandellos Alamilla

Editor’s note: Josep F. Vandellos is an international sports lawyer associated to RH&C (Spain). He is also a member of the Editorial Board of the publication Football Legal and a guest lecturer in the ISDE-FC Barcelona Masters’ Degree in Sports Management and Legal Skills.

Article 6 of Annexe IV (Training compensation) of the FIFA-RSTP (Ed. 2016) contains the so-called “Special Provisions for the EU/EEA” applicable to players moving from one association to another inside the territory of the European Union (EU) or the European Economic Area (EEA).
The provisions regarding training compensation result from the understanding reached between FIFA and UEFA with the European Union in March 2001[1], and subsequent modifications introduced in the FIFA-RSTP revised version of 2005 to ensure the compatibility of the transfer system with EU law.[2]
This blog will focus on the exception contained in article 6(3) Annexe IV of the FIFA-RSTP. According to this article, when “the former club” fails to offer a contract to the player, it loses its right to claim training compensation from the players’ new club, unless it can justify that it is entitled to such compensation. Instead, the right of “previous clubs” to training compensation is fully preserved irrespective of their behaviour with the player.[3] From a legal standpoint, such discrimination between the “former club” and the “previous clubs” raises some questions that I will try to address in this paper. More...

The EU State aid and sport saga: The Real Madrid Decision (part 2)

This is the second and final part of the ‘Real Madrid Saga’. Where the first part outlined the background of the case and the role played by the Spanish national courts, the second part focuses on the EU Commission’s recovery decision of 4 July 2016 and dissects the arguments advanced by the Commission to reach it. As will be shown, the most important question the Commission had to answer was whether the settlement agreement of 29 July 2011 between the Council of Madrid and Real Madrid constituted a selective economic advantage for Real Madrid in the sense of Article 107(1) TFEU.[1] Before delving into that analysis, the blog will commence with the other pending question, namely whether the Commission also scrutinized the legality of the operation Bernabeú-Opañel under EU State aid law. By way of reminder, this operation consisted of Real Madrid receiving from the municipality the land adjacent to the Bernabéu stadium, while transferring in return €6.6 million, as well as plots of land in other areas of the city. More...

Resolution of Disputes Arising From Football Contracts in Turkey. By N. Emre Bilginoglu

Editor’s note: N. Emre Bilginoglu[1] is a lawyer based in Istanbul. His book entitled “Arbitration on Football Contracts” was published in 2015.


With a total market value of approximately 911 million EUR, the Turkish Super League ranks as one of the prominent football leagues in Europe. Five of the eighteen teams that make up half of the total market value are based in Istanbul, a busy megalopolis that hosts a population of fifteen million inhabitants.[2] As might be expected, the elevated market value brings forth a myriad of disputes, mainly between the clubs and the players. However, other crucial actors such as coaches and agents are also involved in some of the disputes. These actors of the football industry are of all countries, coming from various countries with different legal systems.

One corollary of rapid globalisation is the development of transnational law, which is quite visible in the lex sportiva.[3] Like foreign investors, foreign actors of the sports industry look for some legal security before signing a contract. FIFA does protect these foreign actors in some way, providing players and coaches legal remedies for employment-related disputes of an international dimension. But what if the legal system of the FIFA member association does not provide a reasonable legal remedy for its national actors?[4] More...

The World Anti-Doping System at a Crossroads

“One day Alice came to a fork in the road and saw a Cheshire cat in a tree. ‘Which road do I take?’ she asked. ‘Where do you want to go?’ was his response. ‘I don’t know,’ Alice answered. ‘Then,’ said the cat, ‘it doesn’t matter.”

Tomorrow the Foundation Board of the World Anti-Doping Agency (WADA) will gather in Glasgow for its most important meeting since the creation of the Agency. Since the broadcasting of a documentary alleging systematic doping in Russian athletics by the German public broadcaster in December 2014, the anti-doping world has been in disarray. The various independent investigations (the Pound Report and the McLaren Report) ordered by WADA into doping allegations against Russian athletes have confirmed the findings of the documentary and the truth of the accusations brought forward by Russian whistle-blowers. Undeniably, there is something very rotten in the world anti-doping system. The current system failed to register a widespread, and apparently relatively open, state-sponsored scheme aimed at manipulating any doping test conducted in Russian territory. Moreover, it was not WADA that uncovered it, but an independent journalist supported by courageous whistle-blowers. More...

The EU State aid and sport saga: The Real Madrid Decision (part 1)

Out of all the State aid investigations of recent years involving professional football clubs, the outcome of the Real Madrid case was probably the most eagerly awaited. Few football clubs have such a global impact as this Spanish giant, and any news item involving the club, whether positive or negative, is bound to make the headlines everywhere around the globe. But for many Spaniards, this case involves more than a simple measure by a public authority scrutinized by the European Commission. For them, it exemplifies the questionable relationship between the private and the public sector in a country sick of never-ending corruption scandals.[1] Moreover, Spain is only starting to recover from its worst financial crisis in decades, a crisis founded on real estate speculation, but whose effects were mostly felt by ordinary citizens.[2] Given that the Real Madrid case involves fluctuating values of land that are transferred from the municipality to the club, and vice versa, it represents a type of operation that used to be very common in the Spanish professional football sector, but has come under critical scrutiny in recent years.[3] More...

International and European Sports Law – Monthly Report – October 2016. By Kester Mekenkamp.

Editor’s note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.  

The Headlines
We are looking for an International Sports Law Intern (with a particular interest in the CAS)! More information can be found here.

The (terrible) State of the World Anti-Doping System

The fight against doping is still on top of the agenda after the Russian doping scandal. The national anti-doping organizations (NADOs) have reiterated their call for an in depth reform of the World Anti-Doping Agency at a special summit in Bonn, Germany. These reforms are deemed urgent and necessary to “restore confidence of clean athletes and those who value the integrity of sport” and secure “the public’s desire for a fair and level playing field”. The NADOs propose, amongst others things, to separate the investigatory, testing and results management functions from sports organizations, and to remove sports administrators from crucial anti-doping executive functions. More...

Asser International Sports Law Blog | UEFA’s tax-free Euro 2016 in France: State aid or no State aid?

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

UEFA’s tax-free Euro 2016 in France: State aid or no State aid?

Last week, the French newspaper Les Echos broke the story that UEFA (or better said its subsidiary) will be exempted from paying taxes in France on revenues derived from Euro 2016. At a time when International Sporting Federations, most notably FIFA, are facing heavy criticisms for their bidding procedures and the special treatment enjoyed by their officials, this tax exemption was not likely to go unnoticed. The French minister for sport, confronted with an angry public opinion, responded by stating that tax exemptions are common practice regarding international sporting events. The former French government agreed to this exemption. In fact, he stressed that without it “France would never have hosted the competition and the Euro 2016 would have gone elsewhere”.

This is not the first time that UEFA is exempted from paying taxes in a host country. For example, for the Euro 2012, UEFA was not subject to direct taxation in Poland.[1] Similar conditions were also part of the application procedures for Euro 2004 and Euro 2008, but is up to the host country to decide how it fulfils the tax exemption requirement of UEFA.

On 12 November 2014 the French council of ministers approved a draft legislation that would provide a fiscally advantageous solution for organisers of international sporting events. The law still needs to be approved by the parliament where it is facing strong political opposition. The organisers of the 2015 European basketball Championships, the 2018 Ryder Cup (golf), and of the football Euro 2016 would be fully exempted from paying direct taxes. However, it is unlikely that the French organisers of the yearly held Tour de France (cycling) and Roland Garros (tennis) will enjoy the same privilege. Even though the legislation is not specific to the Euro 2016, many critics hold that the main reason for introducing this legislation was to satisfy UEFA’s demands.

Regarding the Euro 2016, a special joint-stock company has been created called Euro 2016 SAS. 95% of the shares of this company are owned by UEFA, the remaining 5% by the French Football Federation (FFF). Euro 2016 SAS is responsible for organising the competition itself, related events, and the promotion of the events.[2] The board includes UEFA officials, FFF officials, and French government officials. According to the French minister, Euro 2016 SAS will be exempted from direct and related taxes (corporate tax, income tax, payroll tax, etc.). VAT, however, must still be paid. Allowing Euro 2016 SAS to be exempted from paying direct taxes comes at a time when most EU Member States, including France, are forced to introduce austerity measures. Interestingly, it also comes at a time when the European Commission is becoming increasingly active in dealing with matters related to State aid and taxation. In February 2014, former taxation and customs union Commissioner, Algirdas Šemeta, stated that competition policy in general and State aid law in particular could “greatly reinforce our tax policy work.” He also said that pursuing cases under competition rules could make a real difference as they can be enforced directly on the basis of the EU Treaty. Since this statement, the Commission has opened numerous investigations into alleged State aid received through tax schemes.[3] These cases include alleged aid provided by Ireland to Apple, aid provided by the Netherlands to Starbucks and aid provided by Luxembourg to Amazon. Last week’s LuxLeaks scandal, concerning specific tax deals offered to multinationals by the Luxembourg State, has put State aid and tax policy high on the political agenda. Our analysis is embedded into this broader context, which is decisive in understanding the potential readiness of the Commission to tackle selective fiscal State aid measures. In the following paragraphs we will engage in a substantial analysis of a hypothetical State aid investigation by the EU Commission into the suggested tax exemption offered to UEFA by the French State.

In order for a measure to be considered unlawful State aid it has to fulfil the criteria stipulated in Article 107 (1) TFEU.[4] However, with respect to tax measures, the key question will generally be whether the tax measure is selective.[5] In this regard, when considering whether a measure is selective, and consequently constitutes State aid, the effects on the market are taken into account and not the causes or aim of that measure.[6]

According to settled case-law, the material selectivity of tax measures should normally be assessed by following a three-step analysis.[7] Firstly, the system of reference has to be identified. The system of reference constitutes the framework against which the selectivity of a measure is assessed. It is a consistent set of rules generally applicable to all undertakings falling within its scope as defined by its guiding principle.[8] Secondly, it should be determined whether the given measure constitutes a derogation from the system of reference insofar as it differentiates between economic operators who, in light of the objective intrinsic to that system, are in a comparable factual and legal situation. In the case at hand one can think of other sporting or cultural events held in France. If the measure in question indeed derogates, it still needs to be verified in the last step of the test whether the derogatory measure is justified by the nature or the general scheme of the system.[9] If a prima facie selective measure is justified by the nature or the general scheme of the system, it will not be considered selective and thus fall outside the scope of Article 107(1) TFEU.[10]  

1. System of reference

The French corporate tax (impôt sur les sociétiés) is a standard tax with a rate of approximately 33% that applies to all resident companies in France and that affects all profits made in France by the resident companies. The guiding principle of the corporate tax system would consist in levying taxes on all undertakings generating profit in France.  

2. Is the measure a derogation from the system of reference?

In principle, all undertakings based in France that make a profit are liable to pay the French corporate tax. Similarly, workers and employers based in France are liable to pay the French payroll tax. The sole fact that a new legislation would allow undertakings such as Euro 2016 SAS to be exempted from paying corporate tax and payroll tax derogates from the abovementioned system of reference. Even if one were to assume that international sporting events are subject to a specific system of reference, exonerating their organisers from all direct taxes, this would still be at odds with the fact that undertakings such as Amaury Sport Organisation (the French organiser of the Tour de France) would not be exempted from paying taxes.  In short, at this stage, the measure seems to be prima facie selective.  

3. Is the measure justifiable by the nature or the general scheme of the reference system?

 A prima facie selective aid measure can still be found justified in light of the logic of the system of reference.[11] It has to be borne in mind that a Member State is free to shape the fundamental aspects of its tax system by determining the taxable situations, the tax rate and tax base. Art. 107 (1) TFEU does not prevent the Member State from introducing, reducing or abolishing a tax in order to further its economic aims.[12] It is, however, for the Member State, which has introduced a prima facie selective measure, to show that it is actually justified by the nature and general scheme of the system in question.[13]

It is likely that the French authorities will argue that the measure was introduced to facilitate the organisation of international sporting events to be held on French territory. Organisations responsible for the choice of the host of an international sporting event, such as UEFA or the IOC, need incentives to select France as a host nation. Yet it is doubtful that this could constitute an acceptable justification for the whole scheme. It would imply accepting targeted fiscal dumping as a viable strategy to raise competitiveness, opening the door to a ‘beggar thy neighbour’ policy. Moreover, this tax policy is not aimed at targeting all sports events, i.e. to encourage the practice of sport or any other objective of general interest. Therefore, the Commission is unlikely to accept that it fits into the nature and general scheme of the reference system.

Nonetheless, the French government still believes that the measure is justifiable for a number of reasons. The former French minister for sport, Jean-François Lamour, admitted that hosting mega sporting events always cost more than they generate, and that those who say the opposite are mistaken. However, he also stated that hosting Euro 2016 would serve as an “economic accelerator that can boost the French economy.”[14] “This tax exemption may shock”, admits another former minister for sport, David Douillet, “but it should be considered as an investment, since nearly 3 million visitors are to be expected”. Moreover, “hosting the tournament creates about 20.000 jobs in the construction sector alone. The measure will allow France to host major international tournaments and ensures that they are not organised only in countries that have the means to afford them. In the case of Euro 2016, UEFA will donate €20 million to the host cities, pay €23 million rental money for stadiums and will participate for an amount of €20 million in shares of the French Football Federation regarding amateur football”[15], says the French minister for sport Patrick Kanner. Lastly, as stated in the introduction, Mr. Kanner also held that “France would never have hosted the competition and the Euro 2016 would have gone elsewhere”, had it not agreed to the conditions set by UEFA. Justifications, such as the ones listed here, may be compatible with EU law if it facilitates the development of certain economic activities where such aid does not adversely affect trading conditions to an extent contrary to common interest. Furthermore, the measures must have a clear objective of common interest in order for them to be justified.

According to the French newspaper Le Monde, France has already invested nearly €1.6 billion in the construction and renovation of stadiums and has spent €400 million in access and transport infrastructures for Euro 2016.[16] In Commission Decision SA.35501 Financement de la construction et de la rénovation des stades pour l’Euro 2016, the Commission assessed the public money spent on infrastructure and declared the spending compatible with EU law under Article 107 (3)c) TFEU.[17] The Commission took into account Article 165 TFEU and concluded that the public spending was aimed at a well-defined objective of common interest. It also accepted that there was a public need for the modernisation and enlargement of the stadiums, and that this would not occur without State intervention.

It is important to note, however, that the case at hand describes a different State intervention, namely a specific tax exemption for Euro 2016 SAS. Can arguments raised to justify public spending on infrastructure (i.e. job creation, promotion of France, market failure, cultural, and recreational considerations, etc.) be used analogically to justify a tax exemption? Indeed, there is a direct link between the State’s decision to spend public money in constructing infrastructure and the creation of 20.000 jobs in the construction sector, but not between the legislation allowing tax exemptions and the same job creation. The foregone tax money is not going to be directly re-invested in France, not even in the EU, but is ultimately going to go to a Swiss association: UEFA. The link between the need for the tax exemption and the benefits derived from the EURO2016 can only be made relying on the need to bow to UEFA’s illegitimate blackmail: ‘you’ll get the EURO (and the jobs and exposure hereto tied) only against a fiscal gift’. It is therefore unlikely that the measure at hand fulfils an objective of common interest and would be compatible with Article 107 (3)c) TFEU. 

Usually a negative state aid decision is seen as a backlash for a Member State. However, in UEFA’s tax exemption case, it might be a benediction. It would have positive effects not only for France, but also for all EU Member States, putting a definitive end to UEFA’s blackmailing. A clear precedent would be set and all the organisers of international sporting events taking place in the EU, whether FIFA World Cups, Olympic Games or else, would finally have to comply with tax laws just like anyone else.

[1] Karolina Tetlak and Dick Molenaar, “Tax Exemptions for Euro 2012 in Poland and Ukraine”, European Taxation, June 2012, page 328

[2] The French government and local authorities, on the other hand, are to provide the sites, infrastructure, public services and transportation. They are also responsible for public safety, and for promoting the country and host cities

[3] Timothy Lyons, “The modernisation of EU state aid law and taxation”, British Tax Review, 2014, 2, pages 113-114

[4] (1) The measure has to be selective; (2) granted through State resources; (3) it has to confer an economic advantage upon the recipient; and; (4) it must distort or threaten to distort competition and must have the potential to affect trade between Member States.

[5]  OJ C 384 of 10 December 1998, Commission Notice on the Application of the State Aid Rules to Measures relating to Direct Business Taxation, para. 3

[6] Case C-279/08 P, para. 51; Commission Decision SA.34914, para. 29

[7] See e.g. Joined Cases C-78/08 to C-80/08, Paint Graphos and others [2011], para. 49; Commission Decision SA.34914 - Alleged aid granted to offshore companies – Gibraltar Income Tax Act 2010, para. 28

[8] Commission Decision SA.34914, para. 31

[9] See e.g. Case C-279/08 P, Commission v Netherlands (NOx) [2011], para.62

[10] Joined Cases C-106/09 P and C-107/09 P, Commission and Spain v Government of Gibraltar and United Kingdom [2011], para. 36

[11] Commission Decision SA.29769, State aid to certain Spanish football clubs, para. 15

[12] Conor Quigley, “The notion of State aid in the EEC” [1988] European Law Review, pages 242 and 245

[13] Case T-211/05, Italy v Commisison, para.125

[14] Euro 2016: pourquoi offrir un cadeau fiscal à l’UEFA? Le Monde, 5 November 2014

[15] La France n’aurait pas eu l’Euro 2016 si elle n’avait pas défiscalisé l’UEFA, Le Monde, 5 November 2014

[16] Ibid

[17] Article 107 (3)c):Aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest may be considered to be compatible with the internal market.

Comments (1) -

  • The Complainant

    11/20/2014 12:21:59 PM |

    Great article and analysis. Vestager has just answered a question on this issue during her first press conference. No position yet but she is likely to be looking into it. Let's see whether the previous Commission's cosy relationship with UEFA will continue or come to an end. If it continues, the European Commission will be walking on very thing ice and could have a nasty legal surprise.  

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