On 12 December 2014 Swiss politicians have passed a law that strengthens the oversight of more than 60 sports associations based there, including the Fédération Internationale de Football Association (FIFA) and the International Olympic Committee (IOC). Thus far sports bodies based in Switzerland were not obliged to register with the state or to publish their accounts. They benefitted from tax breaks, autonomy to govern their own affairs, and exemption from Swiss anti-corruption laws.
The so-called “Lex FIFA” will now designate the top officials of the sports associations residing in Switzerland as “Politically Exposed Persons” (PEPs) who, according to the Financial Action Task Force (FATF) rules could be subjected to corruption investigations.
The FATF Guidance document explains that “[d]ue to their position and influence, it is recognised that many PEPs are in positions that potentially can be abused for the purpose of committing money laundering offences […]. The potential risks associated with PEPs justify the application of additional anti-money laundering […] preventive measures with respect to business relationships with PEPs. To address these risks, FATF Recommendations 12 and 22 require countries to ensure that financial institutions and designated non-financial businesses and professions … implement measures to prevent the misuse of the financial system and non-financial businesses and professions by PEPs, and to detect such potential abuse if and when it occurs.”
FIFA had been subjected to criticism for its opaque decision-making and review processes, especially related to claims about alleged corruption in the bidding for the 2018 and 2022 World Cups. It was also subjected to strong criticisms regarding what seemed for many to be unreasonable demands posed by FIFA to Brazil, the host of the World Cup in summer 2014.
The recent move by the Swiss parliament demonstrates the potential contribution of individual countries to resolving global problems. It reflects a growing sense of unease by Swiss politicians with the lax control over the global sports associations based in Switzerland. Facing widespread public criticism, Switzerland has finally made the first step in the right direction.