European football clubs are facing increasing scrutiny for their transfer dealings with Russian teams. Russia has been subject to severe sanctions by the European Union (EU) ever since the conflict between Russia and Ukraine broke out in 2022. However, several major football clubs, including Paris Saint-Germain (PSG), Parma, and Panathinaikos, may have violated these sanctions by continuing to conduct risky transfer deals with Russian clubs. This situation raises concerns about the potential consequences of these transactions and how they align with EU regulations.
European Football Clubs and Risky Transfers
A recent investigation by the organization Follow the Money revealed that 25 European football clubs had potentially breached EU sanctions through transfer deals with Russian teams. This investigation uncovered that between February 2022 and December 2023, a significant number of transfers involving Russian teams occurred despite the sanctions. The findings highlighted that some of these deals may have been in violation of the trade restrictions placed on Russia after the country’s invasion of Ukraine.
Further reports this year have exposed additional risky transfers. In total, 42 potential violations were identified across 39 European clubs, involving 14 teams in Russia. Some of the most prominent teams, such as France’s PSG and Italy’s Parma, have been mentioned in these findings. The investigation also revealed that for the first time, a German club, Holstein Kiel, might have been involved in such a deal.
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The investigation showed that these transfers are not limited to small or lesser-known clubs. Teams from major footballing nations such as France, Italy, Spain, and Portugal have all been implicated in deals that may have violated the EU’s sanctions on Russia. The danger lies in the fact that clubs involved in these transactions could be unintentionally supporting Russian entities that are part of the sanctioned list or violating rules regarding financial dealings with Russia.
The Financial Risks of Transfer Deals
EU sanctions prohibit direct financial transactions with certain Russian individuals and companies, especially those linked to the Russian state or involved in activities related to the invasion of Ukraine. This creates significant risks for European football clubs conducting transfers with Russian teams. The prohibition on sending money to or from Russia is one of the biggest problems clubs have. If clubs make payments to Russian teams or individuals, they risk having their funds blocked by their banks under the EU sanctions regulations.
Laundering through football clubs
For example, RC Strasbourg, a French club, sold a player named Gerzino Nyamsi to Lokomotiv Moscow for 3.5 million euros in February 2023. Due to the ownership of Lokomotiv Moscow by Russian Railways, a state-run company, this deal may present difficulties. Similarly, Portuguese club Casa Pia AC sold striker Felippe Cardoso to Russian team Akhmat Grozny, whose honorary president is Chechnya’s leader Ramzan Kadyrov, a figure on the EU sanctions list since 2014.
In response to the difficulties in making these payments, UEFA (European football’s governing body) has instructed clubs to deposit the money in escrow accounts under the supervision of national football federations. However, this practice may also violate EU rules, specifically the ban on holding deposits for Russian entities. EU sanctions imposed in February 2022 prohibit holding more than 100,000 euros in an account for an individual or entity connected to Russia. Legal experts warn that the use of escrow accounts could be seen as a breach of these regulations.
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Potential Consequences for Football Club
Football Club that fail to pay transfer fees could effectively be withholding funds intended for Russian teams, which may constitute a violation of the sanctions. The EU has made it clear that sanctions take precedence over UEFA and FIFA rules, which means that clubs cannot rely on permissions from these football authorities to bypass EU laws. While UEFA’s rules allow for certain solutions, like placing money in escrow, the broader issue remains whether such actions still fall within the scope of the EU’s sanctions.
Numerous teams are in double jeopardy, notably Greek teams Panathinaikos and PAOK Thessaloniki and Austria’s Sturm Graz. Not only have they done business with Russian football clubs whose owners are on the EU sanctions list, but they may have also violated the EU’s deposit ban by attempting to transfer funds. In addition, Matvey Safonov, a goalie from FK Krasnodar, was acquired by France’s PSG for a fee of 20 million euros. Even though Krasnodar’s owner, Sergei Galitsky, is not on the sanctions list, the transfer still risks breaching the EU deposit ban.
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Many clubs, such as PSV Eindhoven and the national football associations of Belgium and the Netherlands, have confirmed that they followed UEFA’s instructions to deposit funds in escrow. However, the EU’s legal experts warn that clubs must ensure they are not violating sanctions, even if they have been advised by football governing bodies.
The ongoing investigation has shed light on the complexities and risks that European football clubs face when dealing with Russian entities. While it may seem that these transfers are simply part of football’s normal business, they highlight the broader impact of the EU’s sanctions regime. Clubs involved in these transfers could face serious legal and financial consequences if they are found to have violated the EU’s sanctions on Russia.
