With great pleasure, we welcome readers to the December 2016 edition (citation: GSLTR 2016/4) of our ground-breaking journal and on-line database (www.gsltr.com): Global Sports Law and Taxation Reports (GSLTR).
Once again, the last twelve months have been dominated by news from FIFA, including the election, on 26 February 2016, of a new President, Gianni Infantino, formerly the Secretary-General of UEFA. On 13 October, 2016, Infantino unveiled an ambitious 4-billion US$ ten-year plan, called FIFA 2.0: The Vision for the Future. He outlined the aims of this Plan in the following terms:
“Football, in whatever language you speak, is known as “the beautiful game”.
As the governing body and steward of the beautiful game, a game that means so much to so many, we at FIFA have an obligation to put football at the centre of all that we do. It is only by doing so that we will fulfil our vision to:
Promote the game of football, protect its integrity, and bring the game to all.
It is that vision for the future of football and FIFA that we present to you here, laying out, for the first time in the organisation’s history, how FIFA will guide international football in a rapidly changing world, one with opportunities, risks and responsibilities that have never been more challenging.
Since February 2016, FIFA has made great strides to position the organisation to thrive in the future. The approval of landmark reforms, a transformational restructuring to optimise FIFA’s operations, and the creation of an entire division with a specific mandate to develop and commercialise the women’s game – a new FIFA has laid the necessary groundwork to more effectively grow the game, enhance the football experience, and build a stronger institution in the process.
FIFA is led by a new team – with diverse backgrounds and unique talents – tasked with guiding a reinvigorated staff to implement the organisation’s new strategy:
FIFA will increase its investment in football development, harness innovation to shape the future of the game and its distribution, and assume greater control of its global operations.
This forward looking, strategic approach is a hallmark of FIFA’s new leadership and our approach to our work. As such this is a living document and we look forward to receiving input on it from our stakeholders throughout the game in the coming weeks and months.
In realising this vision, we will:
– Enable more people – men, women, girls and boys from all backgrounds – to play the game or participate in football in a variety of ways;
– Facilitate a deepening of the relationship between fans and the game, both on the pitch and in the stadiums, and through the myriad of means by which people engage with the game from afar;
– Make the world’s most popular sport – and the competitions that are our crown jewels – even more valuable to our partners, and in turn generate resources that will be invested back into the game through our Member Associations.
At the same time, we will remain attuned to the demands contemporary society places on international institutions when it comes to accountability, transparency, and inclusivity –principles that are essential as FIFA continues its work to regain trust with its partners and stakeholders.
These are exciting times for a new FIFA, for a FIFA 2.0 that is energised to build an organisation that is truly football-centric, that is focused on the future. We understand that we all share a responsibility to steward and improve the game today, tomorrow and in the coming years. FIFA’s Vision for the Future will help us chart the most effective path, and I look forward to discussing this work with all our stakeholders as we continue our journey.”
And the new General Secretary of FIFA, Fatma Samoura, added the following remarks in support of those of Infantino:
“Today in Zurich, an energised FIFA administration is focused on implementing a strategy that will bring to life our organisation’s vision for the future of football.
From teams working with Member Associations on football development, commercial growth, talent management and communications, throughout the Home of FIFA we are harnessing the energy and passion of our employees and the worldwide football community.
As the President has indicated, FIFA’s work is guided by three objectives:
– To grow the game by investing in our Member Associations, in the women’s game, and in technical programmes;
– To enhance the experience for all who participate in football in many different ways;
– To build a stronger institution that effectively governs, regulates and protects football, to preserve the essence of “the beautiful game”.
We understand that fulfiling the vision depends upon building FIFA 2.0, a better organisation – one that is cognisant of the vast commercial opportunities before us, and respectful of the responsibilities we bear as a global sport governing body.
Under the new leadership, this work has already begun. In the weeks following the FIFA Congress’ approval of sweeping reform, we started a process to optimise structures and streamline processes to better position FIFA, and by extension football, for the future. In refining the operating design and instituting changes to the finance function, FIFA has strengthened its capabilities to fund its work in developing football and organising world-class competitions. Essential to the implementation of this vision is a robust communications strategy that engages FIFA employees, the Confederations, and Member Associations, the broader football community and stakeholders.
We know that success will beget success: a better organisation will create additional commercial success; additional commercial success will create higher investment in the game at the grassroots level.
As FIFA embarks on an exciting new future, that football-centric view is essential as we continue our work and bring the power of football – which I believe is unparalleled – to the world.”
All fine words indeed from the top of FIFA and much needed for such a discredited organisation, in which so many have lost confidence, so we will see what actually happens in practice. For as they say: “Actions speak louder than words!”
Another preoccupation, during the past year, has been doping. Sadly, doping in sport, like the poor, is always with us, and is the scourge of sport undermining its integrity.
In this issue, on the sports legal side, we feature two timely articles on this subject. An article on doping by Markus Manninen, a leading Finnish sports lawyer and CAS Arbitrator. In his article, he deals with the application of the legal principle of “Lex Mitior” to doping sanctions. In his introduction he writes:
“Generally, the principle of “tempus regit actum” (the principle of no retroactivity) applies in adjudicating suspected anti-doping rule violations (ADRV).
There are, however, a few exceptions to the main rule. The most important one is the doctrine of “lex mitior”, according to which new substantive rules shall be applied when they are more favourable to the accused than the rules in force at the time of the alleged wrongdoing. It has been applied by the Court of Arbitration for Sport (CAS) from very early stages and is now codified in art. 25.2 of the World Anti-Doping Code (Code).
The applicability of “lex mitior” is not limited to cases that have not yet been fully resolved. Instead, it may also be utilised when a final ruling has been rendered but the sanction has not yet been fully served. This aspect of the doctrine has been provided for in art. 25.3 of the Code since 2009.”
He illustrates his interesting article with some decided cases and reaches the following conclusions:
“Art. 25.3 of the Code is essential in eliminating the potential injustice related to the timing of adjudicating ADRVs, which sometimes may be purely coincidental. In addition to its transitional nature, it provides protection to athletes and other persons under long-lasting bans when anti-doping sanctions are lightened.
The legal practice seems to be consistent in finding that anti-doping organisations are free to take any amendments in the anti-doping regime into account when considering the grounds for reducing ineligibility periods. As a counterbalance, even if the new rules provided for a milder sanction – or no sanction at all – in the case of the specific circumstances, the panels have full discretion to contemplate whether a reduction is justified.”
The second timely article on doping in sport contrasts the decisions not to impose and to impose “blanket bans” made by the IOC and the IPC respectively in response to the Russian state sponsored doping of athletes, which came to light in the McLaren Report in the run up to the 2016 Rio Games and involved Olympians and also Paralympians. In this article, English Barristers Gideon Barth and Richard Booth QC, examine the matter from the point of view of human rights law, pointing out that the practice of sport, according to the Olympic Charter, is a basic human right. They reach the following conclusions:
“The protection of the individual rights of athletes to compete and the fight against doping and cheating in sport is a delicate and difficult balancing act for WADA and sports’ international governing bodies. The reluctance to punish innocent athletes should be applauded. The decision to ban an entire sporting nation from the biggest sporting event in the four-yearly calendar is an extreme and unusual step, but the McLaren Report is an unusual and extraordinary revelation. In the context of a state-run scheme to falsify doping reports, rendering every Russian athlete’s doping test results unreliable (although not positive), the decision is unsurprising.
Also, despite the protestations of many, the Awards discussed above indicate that CAS plainly consider the respective decisions of the IOC (to avoid a blanket ban but reverse the burden of proof) and the IPC (to suspend the RPC with the effect of banning all Russian para-athletes) to be lawful and proportionate responses to such an egregious and deceitful scheme.”
On a different topic, but also a timely one, we publish a most interesting article entitled”Glanders in horses: biosecurity precautions taken at the 2016 Rio Olympics” by Laura Donnellan of the University of Limerick Law School, our regular expert on equestrian legal matters. Not only did the Zika virus threaten the Rio Olympics, but so also did the threat of “glanders” in horses competing in equestrian events at the Games. In her article, she explains the origins and nature of this disease and the draconian measures taken by the Brazilian organisers of the Games to ensure its absence from Rio. She concludes her article as follows:
“As there is no vaccine for glanders, biosecurity measures are imperative and Brazil demonstrated its commitment to ensuring that no horse at the Rio equestrian event contacted the fatal disease. Its treatment of national horses was draconian and it engaged in a cull of non-infected horses. Its response was reactionary and improperly thought out. There was no mention in any of the reports on the issue of animal welfare and the mass culling of domestic horses in Brazil. Brazil seemed very much intent on the Olympic Games running as smoothly as possible and not even the threat of the Zika virus was going to deter the organisers. In fact, glanders paled into insignificance!”
We also include a topical article on “Intellectual property in the UK and “Brexit”” by Manuel Macchi and Mark Richardson. It will be recalled that, on 23 June 2016, the UK surprisingly voted in a referendum in favour of leaving the European Union (EU) (‘Brexit’), which will take at least two years to complete once the formal process begins in March 2017 by the triggering of art. 50 of the EU Treaty. In their article, they consider the implications of “Brexit” on existing and future intellectual property rights in the EU in relation to the UK, including sports-related ones. They conclude their article with some useful practical measures to be taken by affected IP rights’ holders on going forward.
We also run a thought-provoking article by Prof. Dr. Steve Cornelius on the IAAF Hyperandrogenism Regulations with particular reference to the controversial Caster Semenya and Dutee Chand cases. In his wide ranging review of these regulations and the background to them, he cites Karkazis, Jordan-Young, Davis and Camporesi in his conclusion as follows:
“Elite sport can value diversity and ensure that all women, including those with intersex traits, have equal opportunity to participate in sports, that they are treated humanely, that they are not forced to undergo what may be unnecessary medical treatment, and that they are not made ineligible based on advantages they may not even have.”
He ends his conclusion with:
“In a time when women across the globe are still subjected to extreme forms of discrimination and unspeakable violence, the IAAF could have chosen to become a champion for the rights of all women to be free from violence and to maximise their natural talents. Instead, the IAAF chose to perpetuate the violence. Whether they continue on this route, only time will tell. But if they do, history will eventually judge them harshly for it!”
Finally, on the sports legal side, we publish a practical article by Prof. Dr. Ian Blackshaw on “Entire agreement clauses in sports marketing agreements: a trap for the unwary!” In his article, he points out the usefulness or otherwise of such so-called “boiler plate” clauses and counsels against their automatic inclusion in sports marketing agreements of various kinds. They should only be included, he argues, when they serve a useful and relevant purpose; customised to fit the particular facts and circumstances of each case; and always with an eye to their legal and practical effects. And he sounds the following warning in the conclusions to his article:
“The old drafting adage that standard clauses have been included in agreements because they do not do any harm and may also do some good is a dangerous one to follow in practice. Each clause included should be carefully considered; serve a definite purpose and, therefore, be deliberately included; and not merely included on the off chance – or in the pious hope – that they may do some good!”
On the sports tax side, we include an article by Francisco Cabral Matos and João Riscado Rapoula, of Vieira de Almeida & Associados, Attorneys, Lisbon, Portugal, on the taxation of sports image rights in Portugal based on a review of a recent decision of the Portuguese Tax Arbitration Court rendered on 15 September 2016.
In their conclusions to their article they state as follows:
“[I]t seems to follow from the Decision that the mere interposition of a company that owns the (previously transferred) image rights suffices to set aside source taxation of such rights in Portugal. The Court seems to uphold such view even though:
1 the sportsperson performs his/her activity in Portugal;
2 there is a link between the respective employment contract and the image rights;
3 the applicable DTT allows Portugal to tax such income under art. 17(2); and
4 the Portuguese domestic rules actually allow the taxation at the hands of a foreign third entity.”
“Eventually this would not be the outcome of the Court’s decision if (and when) the Portuguese tax authorities would decide to change their approach towards this matter, in such way that their view would ultimately be based on a facts and circumstances analysis allowing them to identify whether the payments are effectively connected with activities performed in the Portuguese territory.”
Finally, we round off the December 2016 issue of GSLTR with another sports tax law article by Dr. Rijkele Betten, the Managing Editor of GSLTR and an experienced international tax adviser, on tax treaty case law.
So, another year is coming to an end and bringing with it its own veritable crop of interesting and significant developments in sports law and sports-related taxation law. No doubt, the New Year will also be full of other challenging sports legal and tax issues. Many of this year’s developments we have covered on our dedicated website www.gsltr.com and also in our journal, which all goes to show the need for it. We hope that existing subscribers will spread the word about GSLTR, amongst their colleagues and contacts, to encourage new subscribers and thereby help us to increase our global footprint and continue to provide a must-have resource and service for the international sporting community and their legal and tax advisers.
Finally, and as always, we would welcome and value your contributions in the form of articles and topical case notes and commentaries for our journal and also for posting on the GSLTR dedicated website www.gsltr.com. A number of you have already responded to this invitation, but, as they say, the more of you who do so, the merrier!
So, now read on and enjoy this information-packed December 2016 edition of GSLTR and, taking this opportunity, we wish all our existing and new readers our sincere compliments of the season and also all the very best in their sporting endeavours in 2017!
Dr. Rijkele Betten (Managing Editor)
Prof. Dr. Ian S. Blackshaw (Consulting Editor)