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The Financial Crime Case for a Global Anti-Corruption Agency for Professional Sports

Jonathan van der Valk
Commentary, 1 December 2020
Centre for Financial Crime and Security Studies, Law and Ethics
The corruption and illicit financial flows permeating the sports world undermine its integrity. Could a world anti-corruption body for sports be the answer?

In September 2020, football’s international governing body, FIFA, and the United Nations Office on Drugs and Crime (UNODC) met in Vienna to sign a memorandum of understanding, underpinning their cooperation to address the threats posed by crime to professional sports. At the meeting, FIFA President Gianni Infantino pledged to fund a global anti-corruption body for sports. For its part, the UNODC confirmed it would take part in an initial consultation process for this body which FIFA says will include sports organisations, intergovernmental authorities, governments and specialist agencies. The objective? To establish an independent, multi-sports, multi-agency international entity to investigate abuse cases in sports. With evidence suggesting illicit finance in sports is mounting, would such an initiative overturn this trend?

Illicit Finance in Sports – What’s the Score?

Corruption touches professional sports in many ways, including through match-fixing, bribery, money laundering, and commercial corruption. There are also numerous entry and exit points for illicit finance. The selection process for sports competitions is open to corruption, as are the purchase of assets such as clubs and players using illicit finance. Sponsorship, and the buying and selling of rights, can be tainted; and the manipulation of competition results is exploited through illegal and unregulated betting and gambling.

The focus on illicit finance via corruption in sports is not new. In 2009, for example, the global illicit finance watchdog, the Financial Action Task Force (FATF), published a report on money laundering through the football sector. More recently, the EU’s 2019 supranational risk assessment of money laundering and terrorist financing included professional football as a sector representing burgeoning money-laundering risk, due to the sport’s ‘complex organisation and lack of transparency’. In August 2020, Europol, the EU agency for law enforcement cooperation, issued a situation report on the involvement of organised crime groups (OCGs) in sports corruption, underscoring how corruption facilitates financial crime. The annual worldwide estimate of criminal proceeds from betting-affiliated match-fixing, for one, is a staggering €120 million.

Financial crime related to sports corruption does not, however, end with football. In fact, most sports are at risk for different reasons. Due to their association with violence, boxing, wrestling and other fighting sports have for decades been linked to the criminal underworld, and high-value sports such as horse-racing offer plenty of ways for large amounts of money to be laundered. Europol estimates that between 2014 and 2018 almost 500 tennis matches were manipulated, with large networks of betting mules used by OCGs to bet small amounts on lower tier tennis matches simultaneously.

Why Does Illicit Finance in Sports Matter?

The coronavirus pandemic has brought a new urgency to examining the need for a global anti-corruption body as the finances of sports are stretched. The pandemic presents a glaring opportunity for nefarious actors to exploit sports professionals’ salary reductions, or industry delays in payments, to continue to bribe and launder. Aside from the damage caused by criminality related to sports corruption, failing to identify and disrupt illicit finance in the sports world damages its integrity, and undermines its developmental benefits worldwide.

What Has Been Tried So Far?

At an international level, efforts have gradually intensified. A joint EU and Council of Europe initiative, ‘Keep Crime out of Sport’ enacts the principles adopted by the 2014 Convention on the Manipulation of Sports Competitions, designed as a legally binding treaty to address match-fixing. In November 2017, Resolution 7/8 on Corruption in Sport was adopted at the seventh session of the Conference of the States Parties to the UN Convention against Corruption (UNCAC). The Resolution urges the 183 states party to the UNCAC to encourage and implement, ‘robust legislative and law enforcement measures’, and support ‘technical assistance needs’, promoting capacity building initiatives and cooperation between law enforcement agencies and relevant sports-related organisations and stakeholders. Moreover, the G20 Anti-Corruption Working Group, established in 2010, included sports integrity as a priority agenda item at their 2017 Hamburg Summit, urging sports organisations to intensify their fight against corruption by fostering, ‘the highest global integrity and anti-corruption standards’. Discussions at the Summit proposed the International Partnership against Corruption in Sport, a coalition of actors including the UNODC, the OECD and The Commonwealth to ‘strengthen and support efforts to eliminate corruption and promote a culture of good governance’ around sport, as an instrument for this work. Initiatives, though, have thus far focused on high-level principles and policy frameworks, which are yet to translate into measurable and effective action.

Why is a New Body Needed Now?

It is clear the illicit finance related to sports corruption is complex and reaches across borders. FIFA’s vision is for a body that provides, ‘trusted reporting lines, a global pool of experts that can be promptly mobilised to provide local specialist case management and care support to victims, witnesses, and whistleblowers, as well as establishing standardised sanctions and disciplinary measures and screening processes’ to hinder movement between regions and sports. Despite the array of frameworks and treaties in place, a duplication in responsibilities and membership is currently evident, and a joined-up approach is lacking. The new body could be a standard-setter, implementing actionable policies to thwart illicit finance and exposing sports to those with the experience and legal and financial expertise to address corruption and illicit finance. A single body could pool resources across sports and multilateral organisations to properly support targeted investigations – including financial analysis – and would ensure the sharing of information, expertise and best practice, creating a more efficient and effective mechanism to combat illicit finance in sport.

Whether there is genuine desire to tackle sports corruption, though, is open to debate, and a new international body would only have as much power as it is given. Certainly, agreeing its scope in a landscape already congested with international treaties and inter-sport bodies will be difficult. Securing national buy-in will be challenging too.

Scope and authority aside, inevitable questions will be asked about FIFA’s suitability to lead the consultation process. Although professional football is the primary location of illicit finance and FIFA is well placed to play this role, it is mired in corruption scandal itself. In 2015 several senior officials were indicted by the US Department of Justice on charges of bribery, fraud and money laundering, including the acceptance of $150 million in bribes over two decades. Although then FIFA President Sepp Blatter’s tenure quickly fell into ruin, his replacement, Gianni Infantino, has recently also become subject of an investigation into his possible collusion with Michael Lauber, a Swiss attorney who resigned in July 2020 over his conduct related to a corruption investigation examining FIFA.

Regardless of who leads this consultation, in order to create impact and change, a new agency must facilitate cooperation between the sports industry (including governing bodies, clubs, officials and athletes), law enforcement, governments and the betting industry. The sports community must take this moment, in a world where the focus on financial crime and proceeds of corruption is high, to recognise the vulnerability it embodies, and take urgent, concerted and considered action.

The views expressed in this Commentary are the author's, and do not represent those of RUSI or any other institution.

Author

Jonathan van der Valk
Research Analyst

Jonathan is a Research Analyst at RUSI's Centre for Financial Crime and Security Studies. He joined RUSI in April... read more

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