The international journal dedicated to football law

# 8 – December 2017

— World in review — National News

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Criminal Procedure against Angel Maria Villar in Spain a profit by contracting the services of Valencia CF´s Hardship in the Kondogbia case his son, Gorka Villar, former General Manager of CONMEBOL (from 2012 to By Enric Ripoll Gonzalez By Alejandro Pascual Lawyer, Ruiz-Huerta & Crespo Sports Lawyers 2016). Once he terminated his contract Lawyer, Ruiz-Huerta & Crespo Sports Lawyers Valencia - Spain with CONMEBOL (and being accused Valencia - Spain of extortion by several Uruguayan clubs), he helped his father to retain his position as RFEF President in 2017. ➔➔ Violence – Spanish Football Federation Amongst many people that appear (RFEF) – Disciplinary litigation – FIFA ➔➔ Spanish Football Federation in the investigation there are some Regulations – FIFA RSTP – Player transfer (RFEF) – Governance – Corruption – names that stand out over the rest, Criminal proceedings apart from Villar’s saga, one of them is Juan Padrón, RFEF’s Economic Vice- President. He was the right hand of A. M. Villar, and is accused of benefiting regional associations (Spain is divided Geoffrey Kondogbia, while playing for ban in 2013. Consequently, Valencia CF On 25 July 2017, Angel Maria Villar was in 17 Regional Associations that Sevilla FC, received a direct red card consulted the RFEF´s Legal Department, suspended as President of the Spanish Football have the right to vote to decide the during the second leg of the 2012- which confirmed that such suspension Federation (RFEF). President) through subsidies (those 2013 Spanish National Cup semi-finals. was yet to be implemented, since that support more A. M. Villar were the The Spanish Football Federation (RFEF) the RFEF did not notify the French ones obviously more benefited). He is sanctioned the player with a four-match Football Federation (FFF) about the This suspension obeyed the criminal between the RFEF and an insurance reports pointing to his suspicious also suspected of having had personal suspension under Article 98 (typified as abovementioned sanction when the procedure conducted against him by company that cost EUR 51 million to way of managing the RFEF, in 2016, profit, and was also imprisoned. “assault”) of the RFEF Disciplinary Code. transfer to AS Monaco took place. This the Spanish police and was a decision the very same RFEF. the Sports Council for Sports filed a The said sanction was later reduced was in clear violation of Article 12 of the taken by the Spanish Council of Sports complaint against him, including the Ten days after their imprisonment and to two matches by the RFEF´s Appeal FIFA Regulations and Transfer of Players following the decision of the Judge, to In 2008, being forced by the Spanish so-called Haiti case. The Spanish Court considering that all the investigation Committee after partially accepting (FIFA RSTP), which states as follows: send him into prison, unconditional Law to call for new elections, A. M. Villar ordered the investigation that was was already concluded, the Judge Sevilla’s appeal, determining that and without bail, on 18 July 2017. kept postponing it in order to avoid conducted by the Central Operative decided to release them from prison Kondogbia’s conduct had to be typified “Any disciplinary sanction of up to four being examined by the Football family, Unit (UCO). The UCO is the central body and they are now pending the next instead as “violent conduct” based on matches or up to three months that Angel Maria Villar, RFEF President the President of the Spanish Council of the Judicial Police service of the step of the procedure. Article 123 of the RFEF Disciplinary has been imposed on a player by the since 1988, was found to have created of Sports at that time (Jaime Lissavetzky) Civil Guard of Spain, responsible for Code. former association but not yet (entirely) a system to, through influences and pushed him several times to accomplish the investigation and prosecution of served by the time of the transfer shall favours, unjustly enrich himself and the regulations. A. M. Villar requested the most serious forms of delinquency As stipulated in Article 56.5 of the RFEF be enforced by the new association at his family (his son is also charged). Joseph Blatter to use FIFA as a threat and organized crime, whether national Disciplinary Code and due to the fact which the player has been registered The criminal charges against to prevent the Government to try to or international, as well as support that Sevilla FC was eliminated from in order for the sanction to be served at the President are serious: unfair influence football or on the contrary see Territorial Units of the Judicial Police, the competition in question in that domestic level. When issuing the ITC, the administration, misappropriation and/ how the Spanish teams and national which, due to lack of personnel or same fixture, G. Kondogbia should have former association shall notify the new or fraud, documentary falsification team were excluded from participating means, or because the criminal sphere fulfilled the sanction in the following association via TMS (for players to be and corruption between individuals, in international competitions. is interprovincial, require the support of Spanish National Cup´s match, to registered as professionals) or in writing which is the reason why, considering this Unit. be held in the 2013-2014 season. (for players to be registered as amateurs) his economic capacity and the contacts In 2010, the RFEF received a State aid However, in August 2013, the player of any such disciplinary sanction that has he has, the Judge decided to not grant of EUR 1.2 million to invest in solidarity During three months, the UCO recorded was transferred to the French club yet to be (entirely) served.” him the opportunity to avoid prison by and development programs in Haiti, the phone calls of the President and his AS Monaco and subsequently moved to paying a bail. money that did not end in the latter son, and discovered that both were FC Internazionale in 2015. He, therefore, In this sense, it could be stated that country and A. M. Villar accused his planning their strategies to unjustly had no possibility to serve the sanction Article 13.2 of the RFEF Disciplinary The investigation conducted by the former Secretary General (and political enrich themselves and perpetuate his in Spain. Code conflicts with Article 12 of the Spanish Authorities revealed that rival for the elections to the RFEF) position as RFEF’s President. FIFA RSTP since the former states that even politicians have been receiving and another dismissed administrator. In the summer of 2017, the player in the event a player is sanctioned and, “benefits” from A. M. Villar, for example Finally, the RFEF was condemned to Amongst those strategies, the finally moved to Valencia CF without prior to serving it, the player loses his one of the former Secretaries of State return the amount received plus the President and his son organized several theoretically any pending sanction affiliation to the RFEF, the said sanction for Sport (Rafael Cortés Elvira) and his interest after being unable to properly friendly matches, such as Spain-Bosnia according to his international transfer shall be fulfilled once the player wife received EUR 1.2 million from justify how the money was spent. (in Switzerland) in May 2016 and Spain- certificate. Nevertheless, Valencia CF resumes his affiliation to the RFEF. 2010 to 2012 from a company called South Korea (in Austria) in June 2016, diligently checked the player’s Asesoramiento Corell S.L., coming from After several scandals like those both to prepare the Euro 2016. To disciplinary situation and detected that Hence, the fact that Geoffrey Kondogbia a deal that terminated the contract abovementioned, and the constant organize those matches A. M. Villar had G. Kondogbia had received a two-match had to serve the two-match sanction

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while being registered with Valencia CF In summary, Valencia CF seemed to were of EUR 1.39 million in 2011; Spanish Image Rights: ➥➥ Kooper Services (Virgin Island) which can range up to 45%). After 1996, can be attributed to the RFEF’s have sufficient grounds to contest EUR 1.66 million in 2012; EUR 3.2 million José Mourinho vs the which owns Mourinho’s image rights the “Ley 13/1996, de 30 de diciembre, de negligence. This case is similar to the G. Kondogbia’s ineligibility, although in 2013 and EUR 8.5 million in 2014. All and receives the money transferred Medidas Fiscales, Administrativas y del Spanish Tax Agency by the Irish companies; issue of Denis Cheryshev who was fielded probably, due to the comparative these amounts exceed EUR 120,000 Orden Social” prevents this practice by by Real Madrid in the Spanish National relevance of the match, the club per year that makes tax fraud a crime, By Alessandro Mosca imposing a maximum 15% threshold Cup despite the player´s ineligibility preferred to comply with the RFEF´s punishable by one to five years in Lawyer, Ruiz-Huerta & Crespo Sports Lawyers ➥➥ Kaitaia Trust (New Zealand) which as image rights payment to players’ Valencia - Spain due to a previous suspension. However, decision avoiding any potential prison. José Mourinho owns 100% of Kooper companies, while the other 85% is as a key factor, in Kondogbia’s case the discrepancy. Services through this trust. considered as players’ employment party acting negligently was the RFEF In his defence, Ronaldo´s lawyers stated ➔➔ Image rights – Tax evasion – income. itself. that “the fraud that is denounced, National law – Tax Law In June 2017, the AEAT demanded an does not have a causal link with the amount of EUR 3,304,670 from Mourinho Nevertheless, as per the “arm’s length” Primarily, as noted above, the RFEF did use of a corporate structure for the which is the amount he should have principle, the payment of image rights not notify the FFF that G. Kondogbia had management of image rights, but paid during the 2010-2012 period. that players’ companies transfer to a pending sanction which required Cristiano Ronaldo opposes with a tax qualification issue by the According to the AEAT, there was the same players must be based on to be enforced in the French National the Spanish Tax Authorities authorities.” The qualification differs no difference between Mourinho and fair market value. Consequently, 15% Cup. Secondly, when G. Kondogbia in its claim against him for a way that “it can be said that Tollin Kooper Services, therefore the Virgin of the total of the players’ income is returned to LaLiga, the RFEF did not Associates Ltd. [the offshore company Island company declared costs that transferable into their companies. EUR 14.7 million notify Valencia CF about the sanction used by Cristiano Ronaldo] is a problem did not correspond to the real fiscal However, the AEAT considers that which was imposed on the player By Ivan Bykovskyi unrelated to the reason for which a tax position. Following a hearing held at the fair market value (the entire amount in 2013 while playing for Sevilla FC. Lawyer, Ruiz-Huerta & Crespo Sports Lawyers offense is considered to exist.” However, Court of First Instance and Instruction players’ companies obtain from clubs, Had Valencia CF not investigated and Valencia - Spain the player insists that if the fact giving in Madrid on 3 November 2017, José deducting only the expenses related Geoffrey Kondogbia been fielded against rise to the claim of the Tax Authorities Mourinho declared to journalists: to the exploitation of the image ➔➔ Image rights – Tax evasion – Zaragoza FC in the Spanish National of Spain is contained in the transfer In 2010, Mourinho signed an rights) should be paid to players (who National law – Tax Law Cup 2017-2018, the RFEF would have of his image rights to the company employment contract with Real Madrid “I was informed that an investigation must then pay the related IRPF) as disqualified the Spanish club from Tollin Associates Ltd. then it has no and, while relocating to Madrid, he was opened and they told me that in compensation for the transfer of image the competition, as occurred with grounds, as the company was created obtained the tax resident status in order to regularise my situation I had rights. Real Madrid and Cheryshev. long before he went to Spain and such Spain. Consequently, he filed his 2010- to pay a certain amount of money. I did company was approved by English Tax 2012 tax returns, however, without not complain (or) appeal and I paid and The determination of said fair value It must be noted that Geoffrey Kondogbia Authorities as validly constituted and declaring the earnings from his image I signed an agreement and a compliance represents the core of the issue. neither participated in the 2013-2014 functioning. rights. The Spanish Tax Agency (Agencia act with the State, saying that everything Therefore, it would be helpful to French National Cup game against Estatal de la Administración Tributaria - was closed. For this reason, I was here clearly set criteria to determine it Monts d'Or Azergues Foot nor in the Cristiano Ronaldo had until 20 August AEAT) believed that he did so “with the only for five minutes to say the same by modifying the current image 2014-2015 edition against both Nîmes 2017 to pay the claimed amount intention of obtaining an illicit benefit.” things I am telling you.” rights legislation in order to ensure Olympique and Évian. Accordingly, the to the Tax Authorities in order to legal and tax security considering its player could be considered as having terminate the investigation before In July 2014, the AEAT informed As demonstrated by the numerous economic, administrative and criminal served the two-match ban while it could enter the phase of judicial Mourinho that his 2010-2012 personal football cases that have occurred over implications. playing for AS Monaco. According to a statement from consideration, however, he did not income tax returns (Impuesto sobre the last few years the issue of image the Public Prosecutors Office, realize such payment. Furthermore, la Renta de las Personas Físicas - IRPF) rights in Spain is considerable. Many Article 12.1 of the FIFA RSTP is crystal Cristiano Ronaldo took advantage in October 2017, Ronaldo refused and the 2013 Non-Resident period footballers have faced investigations by clear when stipulating that a non- of a corporate structure created in to sign a collaboration agreement would be investigated. A year later, in the AEAT for tax fraud while they lived served sanction “shall be enforced by the 2010, the year following the signature with the Tax Authorities, meaning July 2015, Mourinho signed an “acta de in Spain. The last player involved being new association at which the player has of his employment contract with that his case would be submitted for conformidad”, acknowledging the non- Ricardo Carvalho, who was found liable been registered.” Therefore, the question Real Madrid, in order to “hide from the the consideration of the Judge and declaration of image rights payments for hiding income from his image rights remains whether the RFEF´s negligence treasury the income generated in Spain” consequent decision. Despite the fact and paid a penalty of EUR 1,146,307.83. while playing for Real Madrid in 2011 could be considered not only as a by his image rights, something that that he refused to sign a cooperation However, the AEAT later discovered the and 2012, by not declaring EUR 545,981 breach of the principle of procedural implies a “voluntary” and “conscious” agreement with the Tax Authorities and following off-shore corporate structure and consequently being sanctioned fairness, which the Court of Arbitration breach of its tax obligations in Spain. to pay the requested amount, he has established by Mourinho “with the object with seven months in prison and a fine for Sport (CAS) has recognized and The Public Prosecutors Office bases such possibility until the very same day of hiding profits from his image rights”: of EUR 142,882. protected on many occasions, but also its complaint on the “most recent case of the hearing by the court, if the case if it would have made impossible for law”, specifically on the Supreme Court proceeds further (based on Article 305 ➥➥ Multisports & Image Management Prior to 1996, Spanish clubs made the RFEF to enforce a sanction which ruling that sentenced FC Barcelona of the Spanish Criminal Code). and Polaris Sports (Ireland) to partial payments to players through was supposed to be implemented by striker Lionel Messi on 24 May 2017. negotiate commercial contracts image rights companies due to a lower the new federation (i.e. FFF). Let alone, exploiting José Mourinho’s image tax cost (Impuesto sobre Sociedades - rights; that Kondogbia may have served the According to the statement, the currently, which can range up to 25%), two-match suspension while playing income tax amounts supposedly effectively eluding the payment as for AS Monaco. defrauded by Cristiano Ronaldo employment income (IRPF - currently,

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Vitolo case: Oral Agreements and their Validity as Football Atlético confirmed the details in a club Player’s Employment Contracts statement: “Atlético Madrid have reached an By Agustín Amoros Martínez Lawyer, Ruiz-Huerta & Crespo Sports Lawyers agreement with Victor Machin Perez, Valencia - Spain Vitolo, for the next five years after the player rescinded his contract with Sevilla Futbol Club. As a consequence of the FIFA ban which stops the club from registering any players during the current summer transfer window, the player will play ➔➔ Player transfer – Player contract – Breach of contract – Buy-out clause – National law – the first half of next season at Union Transfer ban – Player loan Deportiva Las Palmas and will join up with us from 1 January 2018. The Spain international has signed with our club until 30 June 2022.”

But, how was the player loaned to Las Palmas? It seems clear that he already has an employment contract with Atlético, but this club cannot register In July 2017, Atlético Madrid announced athletes’ special relationship, if the in the scope of contracts for the player. Was the agreement between the signing of the forward Vitolo after athlete is signed by another club within professional athletes is questioned, Atlético and Las Palmas concealed in paying the EUR 35,5 million provided a year, said club shall have subsidiary the interpretation of this provision has order to circumvent the transfer ban as release clause in his professional responsibility for the payment of the been consistent with the provisions of imposed to Atlético? contract with Sevilla. above-mentioned compensation. Article 8.2 of the Employees Statute, the Courts accepting its validity, as in It seems, thus, that Vitolo’s case has only However, as Atlético was still under Therefore, the action can be taken the judgment of the Labour Court no. 1 just begun. the transfer ban sanction imposed against Atlético and Las Palmas together of Guipúzcoa 187/198, dated 5 May by FIFA and confirmed by the Court with the player. 1989 (Real Sociedad vs. Uralde case). of Arbitration for Sport (CAS), Vitolo is playing at Las Palmas until January The core of the dispute will surely be This early decision has been confirmed 2018, when Vitolo is to join Atlético the validity of the oral agreement for by several and more recent judgements performing a 5-year contract. the renewal and the evidences which of Labour Superior Courts. For instance, Sevilla may submit in order to support in the Judgement of the Social The issue arises because Vitolo had this fact. Chamber of the Superior Court of previously agreed to sign a contract Justice of Catalonia dated 29 May 2014, extension with Sevilla, which its At this point it is relevant to remark it is absolutely clear: president Jose Castro had announced that according to Article 3 of the Royal before the player’s breach. Decree 1006/85, the agreement should “The lack of a written form concerning be made in writing and in triplicate. the conclusion of the contract may have “Sevilla FC reached a renewal agreement other effects, but an athlete’s contract with Vitolo on July 10th, endorsed by Going further, the Collective concluded in oral form with a certain written documentation with the club, Agreement for professional football club has full legal effect, because the which the player decided to break activities signed between the National form requirement provided in Art. 3.1 unilaterally”, stated the Andalusian Professional Football League (LNFP) of RD 1006/85 has not constitutive club. and the Spanish Footballers Association effects, ‘ad solemnitatem’, but it’s a form (AFE) requires six copies: a copy for each required as evidence, in similar terms as The legal action to be taken by Sevilla party, the third for the LNFP, the fourth Art. 8.2 of the former Employees Statute, is based in the difference between the for the AFE, the fifth for the RFEF and which stablishes the written form for the release clause paid by Atlético and the the sixth for the INEM (former name conclusion of any employment contract.” new one agreed with the player in the of the Spanish Public Employment renewal with Sevilla (EUR 45 million). Service; currently, SEPE). Another interesting issue would be the way in which the player was transferred According to the Spanish Royal However, on the rare occasions when on loan from Atlético to Las Palmas. Decree 1006/85 on professional the validity of a verbal agreement

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