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Argentina targets money laundering in soccer

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By MICHAEL WARREN, The Associated Press Updated 4:41 PM Wednesday, February 15, 2012

BUENOS AIRES, Argentina — Soccer clubs in Argentina are now required to provide detailed reports on any transactions in an effort to prevent money laundering.

Under pressure from the global Financial Action Task Force, Argentina's Financial Information Unit published the tough new rules Wednesday.

The rules require the Argentine Football Association and every club in the top two divisions to file reports not only on officials, players, owners and staff who make at least $13,800 a year, but on companies the association and clubs do business with.

In addition to the usual reporting of salaries, the rules call for bonuses, loans and deals such as housing, cars and financial arrangements involving family members to also be reported.

Fines for noncompliance could range from $23,000 to 10 times the amount of money involved, whichever is greater.

The Financial Action Task Force provides anti-money-laundering guidelines to governments worldwide. It began targeting soccer in 2009.

Many Argentine clubs are deeply in debt despite the vast sums of money that flow through the country's soccer industry.

Gerardo Molina, chief executive of Euroamericas Sports Marketing, said last year that a study by his company showed Argentina has been the world's top exporter of players, with 2,204 sold or transferred to clubs abroad in 2010, topping Brazil's 1,674.

Selling the rights to these Argentine players to clubs in Europe and around the world generated about $500 million that year, he said.

The Argentine watchdog agency says soccer is being challenged by organized crime like never before, citing a 2009 study by the global task force that declared soccer particularly vulnerable to money laundering, tax evasion, political corruption and other crimes, including even trafficking in human beings.

The agency's chief, Jose Sbattella, described soccer as a pit of temptations in a preface to the new rules, which were announced in the official government bulletin.

"The international organizations in question maintain that the sport today faces new threats and challenges that come along with commercial activity, exploitation of young players, doping, corruption, racism, illegal betting, violence, money laundering and other activities," Sbattella wrote.

Money laundering tricks range from basic to complex and sophisticated, the agency warned, including cash, international transfers, shell companies, and the illegal use of non-banking professionals to move money. In particular, selling rights to a player or team's image for undeclared amounts was being increasingly used to evade taxes, it said.

"The amounts of money invested in football have grown mainly as a consequence of the increase in television rights and corporate sponsorships, and at the same time, the labor market for professional football players has seen unequaled globalization, so that an ever-larger number of players are contracted by foreign teams, and the money being transferred around the world has reached surprising levels," the agency added.

Argentina's government has toughened all sorts of reporting rules in recent months in hopes of staying off the task force's "gray list" of nations where financial transactions carry a high risk of criminal activity. The label can increase the overall cost of doing business in a country.

The controls on Argentine soccer had been expected since December, when AFA agreed to more government supervision and tax compliance in exchange for receiving more tax dollars for television rights. As a result, AFA gets more than $200 million a year to televise games for free through its "Football for All" program.

The watchdog agency said its new rules came after numerous consultations with AFA, the clubs and the players' union.

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Follow Michael Warren on Twitter at http://twitter.com/mwarrenap

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February 15, 2012 09:35 PM EST

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