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Solidarity mechanism

Updated 04/24/2019

Written by

Pablo Bruera

lawyer

Introduction

In this paper we analyze the institute of the solidarity mechanism enshrined by FIFA in articles 21 and 22 of the Regulations of the Statute of Transfer of the Player and in annex 5 of the same. Also, we analyze the assumptions in which it operates, the requirements, some resonant cases of jurisprudence and how it is claimed in practice. We also talk about the characteristics of this institute that has often become cumbersome, expensive and difficult to apply for clubs that educate players who then become professionals. Finally, we included the adequacy of the MLS (Major League Soccer) of the United States to the regulations of the so-called "FIFA regime" and an annex, where the current regulations by FIFA are detailed.

When it corresponds to apply the Solidarity Mechanism

Annex 5.1 of the Regulations of the Statute of Transfer of the Player establishes that the Solidarity Mechanism corresponds when a professional player transfers during the term of a contract.

 

The contribution is 5% of any compensation, excluding compensation for training rights.

 

That percentage is deducted to distribute proportionally between the clubs or the club (depending on the case), which formed the player from 12 to 23 years.

 

Article 21 of the RETJ says that it is appropriate to apply this Mechanism when the professional player transfers before the expiration of his contract.

 

In these cases, the club or clubs that contributed to the education and training of the player must collect the compensation.

 

FIFA recognition awards it from the age of 12 for the resources invested in a player.

 

In the year 2001 FIFA makes a reform in the regulation on the statute and the transfer of players. Until that date the clubs had the right of retention, which allowed the institutions to retain the athlete registered in their national federation, even if they did not have a valid contract.

 

The case that changes the history in the rights of retention is that of Jean Marc Bosman, player of R FC Liège of Belgium, who finalized his contract with the club and tried to pass to Dunkirk of France. The Belgians did not authorize the pass because the French did not pay the compensation. Then the player comes to court and after several years achieves freedom of action and FIFA abides by the sentence.

 

The reform of 2001 removes the right of retention and incorporates the compensation for training and the solidarity mechanism.

 

The solidarity mechanism operates when a player is transferred or loaned to a loan when he still has a valid contract, the player's new club must distribute 5 percent of the amount of the pass among those clubs that have participated in the training of the athlete between the seasons covered. between 12 and 23 years old.

 

From 12 to 15 years old, 0.25 percent of the total pass is received (per year in the training club) and between the ages of 16 and 23, 0.5 percent.

 

In other words, the solidarity mechanism involves the distribution of 5 percent of the price of each international transfer to be distributed among all the training clubs between 12 and 23 years.

 

Who must pay this percentage is the acquiring club, although retaining the agreed amount for the transfer with the selling club.

 

In this institute there is no time limit for the collection of compensation, and the contribution must be paid with each transfer of the player, throughout the player's sporting life.

 

Who is obliged to pay is the new club that must compensate the club or training clubs. The new club is responsible for distributing and calculating the amount with the training club (s) as it appears in the player's passport.

 

To calculate the compensation is made based on the price of the transfer, excluding compensation for training.

 

According to the jurisprudence that has been applied for more than 10 years, this compensation corresponds to paying it only in international transfers. Only compensation is applicable for the solidarity mechanism between teams of the same association, when there is a regulation that foresees this.

 

For a long time it was discussed whether the termination clause also allowed the payment of the solidarity mechanism.

 

This dispute was resolved first by the Dispute Resolution Chamber, and then by the TAS / CAS award that ratified the same in the case "SS Lazio vs. CAVelez Sarsfield and FIFA, condemning the Italian club to pay Vélez the corresponding solidarity contribution on the amount of the termination clause (20 million Euros) that Mauro Zarate had agreed with the Al Saad club of Qatar.

 

In its award, the TAS / CAS considered that a clause of rescission freely agreed between a club and the player was comparable to a kind of early consent by the club to allow the player to leave, in the same way that happens in a transfer.

 

The solidarity mechanism does not apply to free players, something that clearly appears unfair to the training clubs, since both were formed with the same infrastructures and the same expenses.

 

The solidarity mechanism must be paid no later than 30 days after the player's registration or, in the case of partial payments, 30 days after the date of said payments (Art. 2.1 of Annex 5).

 

The sum of 5 per cent to be distributed by this mechanism shall be calculated on the whole value of the transaction, not only for the amount actually paid. That is, it is the total value of the transfer, if for example a player was assigned as part of the transfer. the transaction should also value the economic value of the player.

 

It also corresponds the payment of this compensation when the exchange is not for money but for players, the Chamber of Dispute Resolution interprets that indirectly it is a financial agreement, since the sports qualities of a player have economic value.

 

In this case, the CRD takes as an economic amount to compensate the value of the previous transfer of the player that the plaintiff now exchanges with the defendant club.

 

In other resolutions, take the average value of the two players to do the calculation.

 

In the particular case that there is a domestic transfer, between clubs of the same association, but the player has been formed in a club of another association the jurisprudence has mostly said that the solidarity mechanism is not applicable (TAS / CAS Aso, A, Argentinos Juniors vs. Villarreal CFSAD 4-12-07)

 

REQUIREMENTS

 

In order for the solidarity mechanism to be activated, the transfer of a professional player must take place during the term of the contract.

These transfers can be definitive or temporary (loan)

 

COMPETITION

 

Article 22 of the RETJ establishes that it is FIFA that has the competence to deal with disputes regarding the solidarity mechanism.

 

PROCEDURE TO CLAIM THE SOLIDARITY MECHANISM

 

It is processed through the TMS.

If the club lacks TMS, it is claimed through the respective Association.

The process is governed by the rules of procedure of the commission of the statute of the player and the Chamber of Conflict Resolution.

The TMS has a tab called "reclamation" that the clubs are obliged to watch periodically.

Who resolves the claim is the subcommission appointed by the Dispute Resolution Chamber, with judges who are generally unique.

The mandatory documentation to claim is in the list that we attach in the corresponding annex point 6: initiation of the procedure.

It is important the compliance of the documentation, the advance of expenses, the language, etc., so that the claim can be dealt with by the subcommission.

In addition, the plaintiff may add other documents as evidence and the subcommission may request other documents, even if they are not on the list mentioned.

The defendant has 20 days to answer, also through the TMS, and has access to all the evidence presented.

Exceptionally, there will be a second exchange of correspondence and the response must be within 20 days, if nothing is answered the decision is made with the elements of evidence that appear in the file.

The decision of the Subcommittee is charged in the TMS, and is considered as notified and legally binding.

Only the operative part of the decision is notified, if necessary the fundamentals have 10 days to request them. After the deadline, the decision is final.

 

THE INCONSISTENCIES OF THE SOLIDARITY MECHANISM

 

It is not coherent to impose the obligation to compensate the new club when in reality it is totally unrelated to the termination of the contract between the old club and the player, as established in Annex 5 of the RETJ.

With the evolution of the facts, and after several years of application of the solidarity mechanism, we can appreciate that it is a fragile and easily vulnerable institute.

We take into account here that the clubs that train players are totally oblivious to the operations carried out with their trained players and it is practically impossible to avoid simulations such as free transfer contracts in collusion with the previous club.

It has also become too cumbersome to litigate in FIFA to obtain this compensation, and in many cases it has been impossible to exercise this right, because among other problems the advance of expenses is requested to initiate the claim. It seems that there is a clear will to close the roads to exercise this right. Let's see that many of the training clubs are small institutions, with limited resources, but that exercise an important activity in the activity of this sport.

The advance of the procedural costs should be avoided to be able to resort without limit, when the solidarity mechanism is not fulfilled, otherwise the spirit of the own FIFA is violated, that pretends to award to who makes the effort to train the young players .

On the other hand, clubs begin to train their players well before age 12, so it is not understood because the right to claim compensation is recognized as of that age.

In general, the training clubs prepare their structures before the age of 12, so it would be important to change that age.

In the case of Argentina, the National Law 27211 in its sixth article recognizes the formation from the ninth birthday of the athlete

 

MLS (Major League Soccer) of the United States conforms to the rules of the so-called "FIFA regime"
 

This league will collect and pay the solidarity mechanism.

The measure is implemented as a defense for the flight of its young players.

There were resounding cases in which promising youngsters from North American football signed their first contract in Europe, thus seeing the disadvantage of the MLS clubs that are increasing their investments in infrastructure and the training of new soccer players.

According to the league, the reasons why the measure is taken have to do with the compensations that will be given by the players that were formed in the MLS and sign contracts outside the United States and Canada.

Many wonder why now and not before. The clubs affiliated to the MLS answer that they have invested more money in the training academies (more than 75 million in the year 2018 and that sum continues to increase) and also the interest grows for players with a US parent.

However, this measure does not have the support of the players' association, since they argue that this measure may restrict the player's freedom in the future and limit job opportunities.

Remember that the MLS is not affiliated with FIFA; the one that is affiliated is the US Soccer (National Federation).

MLS is a private league that has decided through its affiliated clubs to join the FIFA regulations.

The solidarity mechanism is at the center of a controversy in the United States, since the Crossfire Premier, a club based in Redmond, Washington, wants to achieve a percentage of the transfer fee between the Seattle Sounders and Tottenham clubs when the player DeAndre Yedlin went abroad. Currently the case is in FIFA.

The new position of the MLS could help the claim of the Pennsylvania Classics by Christian Pulisic. This twenty-year-old player was bought by Chelsea to Borussia Dortmund at 64 million euros, a record price for an American player.

 

 

ANNEXED

 

APPLICABLE LEGISLATION

 

Regulation on the status and transfer of players

 

21 Solidarity mechanism:

 

If a professional player is transferred before the expiration of his contract, the club or clubs that contributed to his education and training will receive a portion of the compensation paid to the previous club (solidarity contribution). The provisions on the solidarity contribution are set out in annex 5 of this regulation.

 

22 FIFA Competition

 

Without prejudice to the right of any player or club to raise a case before an ordinary labor dispute tribunal, FIFA has the competence to deal with:

  1. disputes related to compensation for training (Article 20) and the solidarity mechanism (Article 21) between clubs belonging to different associations;

  2. disputes related to the solidarity mechanism (article 21) between clubs belonging to the same association, provided that the transfer of the player causing the dispute has occurred between clubs belonging to different associations;

 

ANNEX 5 .1

 

Solidarity contribution:

If a professional player is transferred during the term of a contract, 5% of any compensation paid to the previous club, except for compensation for training, will be deducted from the total amount of this compensation and will be distributed by the new club as a contribution of solidarity between the club or the clubs that over the years have formed and educated the player. This solidarity contribution will be made proportionally, depending on the number of years the player has been registered in each club during the seasons between the age of 12 and 23 years, as follows:

  • Season of the 12th birthday: 5% (ie 0.25% of the total compensation)

  • Season of the 13th birthday: 5% (ie 0.25% of the total compensation)

  • Season of the 14th birthday: 5% (ie 0.25% of the total compensation)

  • Season of the 15th birthday: 5% (ie 0.25% of the total compensation)

  • Season of the 16th birthday: 10% (that is, 0.5% of the total compensation)

  • Season of the 17th birthday: 10% (that is, 0.5% of the total compensation)

  • Season of the 18th birthday: 10% (that is, 0.5% of the total compensation)

  • Season of the 19th birthday: 10% (that is, 0.5% of the total compensation)

  • Season of the 20th birthday: 10% (that is, 0.5% of the total compensation)

  • Season of the 21st birthday: 10% (that is, 0.5% of the total compensation)

  • Season of the 22nd birthday: 10% (that is, 0.5% of the total compensation)

  • Season of the 23rd birthday: 10% (that is, 0.5% of the total compensation)

 

2 Payment procedure

 

  1. The new club must pay the club or the training clubs the solidarity contribution according to the preceding provisions, at the latest within 30 days after the player's registration or, in the case of partial payments, 30 days after the date of those payments.

  2. It is the responsibility of the new club to calculate the amount of the solidarity contribution and distribute it according to the history of the player's career, as it appears on the player's passport. If necessary, the player will assist the new club to comply with this obligation.

  3. An association will be entitled to receive the percentage of the solidarity contribution, which in principle would be owed to one of its affiliated clubs, if it manages to provide irrefutable proof that the club in which the professional was trained and educated no longer participates in the organized football and / or no longer exists; in particular, due to bankruptcy, liquidation, dissolution or loss of affiliation. This compensation will be allocated to youth soccer development programs of the association or associations in question.

  4. The Disciplinary Committee may impose disciplinary measures on clubs that do not comply with the obligations stipulated in this annex.

Procedure governing claims for compensation for training (Article 20) and the solidarity mechanism (Article 21)

 

1 Principles

 

  1. All claims related to compensation for training, based on article 20, and with the solidarity mechanism, based on article 21, will be presented and processed through the TMS. It will be up to the club that has an account in the TMS to enter the claim in the system. In case the club lacks an account in the TMS, this task will fall on the corresponding association.

  2. Unless the provisions detailed below establish otherwise, the claim process will be governed by the Rules of Procedure of the Players' Status Committee and the Dispute Resolution Chamber, subject to slight differences that may arise as it is a computerized process.

2 Obligations of clubs and member associations

 

  1. All clubs and member associations will check the "Claims" tab of the TMS regularly, at least every third day, and will pay special attention to requests or requests for declaration.

  2. The professional clubs and the member associations will be entirely responsible for the procedural disadvantages that may arise from the breach of the preceding paragraph 1. 72 Annex 6

 

3 Composition of the subcommittee:

 

The subcommission appointed by the Dispute Resolution Chamber is composed of members of the Dispute Resolution Chamber and, as a general rule, all members of the subcommission shall render resolutions as sole judges.

4 Conduct during the process

 

  1. All parties involved in the proceeding will act in accordance with the principle of good faith.

  2. All parties involved in the process are required to tell the truth to the subcommission. Sanctions may be imposed on any association or club that provides inaccurate or false information to the subcommission or abuse of the TMS for illegitimate purposes. In accordance with the FIFA Disciplinary Code, the FIFA Disciplinary Committee will impose sanctions in case of infringements, such as falsification of documents.

  3. The subcommission may use all the means at its disposal to guarantee compliance with these principles.

  4. The corresponding TMS department will investigate the cases related to the obligations of the parties established in this annex. All the parties are obliged to collaborate in the clarification of the facts. Specifically, within a reasonable period of time, they must respond to any request for documentation, information or any other material of any nature in their possession. Likewise, the parties must comply with the obtaining and provision of documentation, information or any other material of any nature that is not in their possession but that is within their reach. If these requests are not followed, the FIFA Disciplinary Committee may impose sanctions.

 

6 Initiation of the procedure, presentation of documents related to the claim of the solidarity mechanism

 

  1. In accordance with article 1.1. of this annex, the corresponding party will enter the TMS application for the solidarity contribution (see article 21 and annex 5). Applications made by other means will not be met. Annex 6 75 2. Depending on the particularities of the claim in question, the claimant will enter the TMS either personally or, in the event that he does not have a TMS account, through his association, the mandatory documents of the following list:

  2. - the identity of the parties;

  3. - a detailed presentation of the facts, as well as the reasons for the claim;

  4. - information about the exact date (day / month / year) of the base transfer of the claim;

  5. - information about the clubs involved in the base transfer of the claim;

  6. - the percentage of the solidarity contribution requested;

  7. - the official confirmation of the member association of the applicant with respect to the start and end dates of the sport season (eg from July 1 to June 30 of the following year) during the period in which the player was registered in the demanding club;

  8. - the written confirmation of the corresponding association with respect to the exact dates of registration of the player in the requesting club, that is, of what date (day / month / year) to which date (day / month / year), taking into account possible interruptions, as well as the date of birth of the player and the indication of the player's status (amateur or professional) in the applicant club;

  9. - the amount for which the player was allegedly transferred to his new club, if known, or a statement that the amount is unknown to date;

  10. - proof that the advance payment of court costs has been paid or that it is not necessary to pay it;

  11. - documentary evidence related to Annex 5, Article 2, paragraph 3 (if the applicant is an association);

  12. - power of representation (if applicable). 76 Annex 6 3. In the event that any mandatory document is missing, or if a translation is not submitted in accordance with article 8 of this annex, the complainant will receive the corresponding notification through the TMS. The claim will only be processed if all mandatory documents have been submitted, or if all translations have been correctly entered in accordance with article 8 of this annex. 4. Likewise, the plaintiff may attach any other document he deems necessary to the claim. The subcommission may request more documents from the complainant at any time.

5. The claims of amateur clubs that do not have access to the TMS will be presented by the corresponding association.

 

7 Notification of the claim to the defendant

 

  1. Once all the mandatory documents have been submitted (see Articles 5 and 6 of this annex) and provided there are no grounds for dismissing the claim, this (including all documents) will be sent to the defendant through the TMS. The defendant will have 20 days from the date the claim is sent through the TMS to upload his answer statement (including the evidence, if applicable). Likewise, the defendant will have access to all the documentation that appears in the TMS file. The documentation and its contents will be treated as confidential and will only be used in the framework of the present procedure. The subcommission may request additional documents from the defendant at all times.

  2. Only a second exchange of correspondence will be maintained in exceptional cases. If so, this second correspondence exchange will be processed through the TMS.

  3. In case of not receiving the response statement within 20 days, a decision will be made on the basis of the documents included in the file.

 

 

8 Language of documents

 

All documents will be sent in their original version and, if necessary, duly translated into one of the four official languages ​​of FIFA. If this is not done, the subcommission will have the right to reject the document in question.

9 Deadlines

 

  1. The deadlines set through the TMS will be legally valid.

  2. The introduction of writings in the TMS must be made, at the latest, on the last day of the fixed term corresponding to the time zone of the place where the respective association is located.

 

10 Notification of resolutions, legal recourse

 

  1. The subcommission will legally notify its decision to all parties involved, either directly or through its association, through the TMS. At the time it is uploaded to the TMS, the notification will be deemed effected and legally binding.

  2. The parties in question will be notified of the operative part of the decision, either directly or through their association. At the same time, they will be informed that, within a period of 10 days after notification, they may request in writing through the TMS the full basis of the decision; failing that, the decision will be considered final and binding and it will be assumed that the parties have waived their right to appeal. If one of the parties requests the entire foundation, the decision will be based in writing and will be notified in full to the parties through the TMS, either directly or through the association. The period for filing an appeal begins after notification of the reasoned decision.