FIFA introduces new regulation that will completely transform the upcoming winter transfer market

FIFA has implemented temporary modifications to its Regulations on the Status and Transfer of Players, impacting several articles, most notably Article 17. These changes, agreed upon with all football agents except FIFPRO in Europe, aim to address the implications of the October 4th ruling by the Court of Justice of the EU in the Lass Diarra case, while the final version of Article 17 is being drafted. The temporary changes will be in effect for the upcoming winter transfer window.

A new paragraph added to Article 14 clarifies the concept of “just cause” for contract termination: “A contract may be terminated by either party without any consequences (neither payment of compensation nor imposition of sporting sanctions) when there is just cause. In general, just cause shall exist in any circumstance in which it can no longer reasonably and in good faith be expected of one party to continue a contractual relationship.”

This clarification aims to provide more clarity and predictability to contracts and ensure fairness in situations where the contract relationship can no longer reasonably be maintained.

Key changes to article 17 (Compensation and third-party influence)

Article 17 has undergone significant revisions to address compensation and the influence of third parties in contract breaches:

• Paragraph 1 (Compensation): In all cases, the party prejudiced by the contractual breach of the other party shall be entitled to receive compensation. Without prejudice to the provisions of article 20 and Annex 4 concerning training compensation, and unless otherwise provided for in the contract, compensation for breach shall be calculated by taking into account the harm suffered, on the basis of the principle of ‘positive interest’, taking into account the individual facts and circumstances of each case, and duly considering the legislation of the country concerned. This ensures that any party that suffers harm due to breach of contract will receive appropriate compensation.
• Paragraph 2 (Third-Party Influence): The right to compensation may not be assigned to a third party. A player’s new club shall be considered jointly and severally liable for the payment of compensation if, taking into account the individual facts and circumstances of each case, it can be demonstrated that the new club induced the player to breach his contract. This aims to deter new clubs from actively inducing players to break their contracts.

Sanctions for clubs inducing contract breaches

The temporary regulations stipulate sanctions for clubs found to have induced a player to breach their contract: A sporting sanction shall be imposed (on any club that has breached the contract during the protected period or on a player’s new club if, taking into account the individual facts and circumstances of each case, it can be demonstrated that the new club induced the player to breach the contract during the protected period).

The club shall be prohibited from registering new players, both nationally and internationally, for two complete and consecutive registration periods. The club shall only be permitted to register new players, nationally or internationally, from the registration period following the complete serving of the corresponding sporting sanction. In particular, it shall not be permitted to make use of the exceptions stipulated in article 6, paragraph 3, of these regulations to register players at an earlier stage. This sanction is a significant deterrent to clubs that interfere with other teams’ contracts.

FIFA emphasizes collaboration and the provision of evidence: “The parties have a duty to cooperate in clarifying the facts and shall respond in good faith to any request for evidence from a chamber, the FIFA general secretariat, or a party. The party submitting a request for evidence shall demonstrate that it is likely that the requested evidence exists and is relevant. An adverse inference may be drawn from a party’s reaction to a request for evidence.” This ensures a fair and transparent process for investigating contract disputes.