I organisation of sports clubs and sports governing bodies

Year after year, Venezuela's individual and team sports do the opposite of its economics and politics.

This chapter will guide you through its system, and try to simply and easily explain how Venezuela's sports law system is built up.

i Organisational form

First, the Sport, Physical Activity and Physical Education Act (the Sports Law Act),2 which is our current sports law, grants organisational autonomy to professional and amateur clubs. Therefore, they can decide on their organisational form. The criteria that classify different types of organisations distinguish between associative organisations and organisations of the People's Power; professional and non-professional clubs are considered associative organisations.

The Act specifically talks about organisational autonomy, under which clubs can dictate and sanction their statutes and internal regulations, and define their structure, on the basic content established in this law.

Non-professional clubs – which are conceived as organisations outside federative sports focused on promoting sports activities for educational, training, recreational, social and health purposes – have the support of public sector sports bodies and entities.

Professional sports clubs are the most popular expression of the associative sports system and are constituted under non-profit private law forms or by registration in the National Sports Registry, carried out in each municipality where the club is formed.

The National Sports institute is the sports governing body.3 Its organisational form consists of a main authority called the Directory. The Directory is formed of:

  1. a president, named by the President of Venezuela;
  2. five directors designated by the Ministry of Sports;
  3. a representative of the workers of the National Sports Institute;
  4. a representative of the National Athlete Commission;
  5. a representative of the Venezuelan Olympic Committee;
  6. a representative of the Venezuelan Paralympic Committee;
  7. a representative of the National Federations; and
  8. a representative of the sports legends of Venezuela.

ii Corporate governance

There are no specific laws that regulate sports organisations; however, we are of the opinion that sports organisations for profit and private law that carry out an economic management of sport would be subject to the Antitrust Law,4 which regulates the exercise of economic competition and sanctions actions that favour unfair competition.

Article 3 of this law states that natural and judicial organisations, either private or public, national or international, with profit or non-profit activities within Venezuela, are subject to this law.

iii Corporate liability

The Sports Law Act contains a chapter that lists violations of the law and their respective sanctions. It establishes the subjects of the disciplinary regime and its jurisdiction; among those subjects, are managers and technical staff of sports organisations. In these cases, the responsibility corresponds to natural subjects and can be attributed by social organisations promoting associative sport and by the Sports Justice Commission; the latter has prevalence.

The Sports Law obligates any sports organisation to establish within their by-laws a section of disciplinary regulations that covers at least the following:

  1. a detailed system of infractions, in accordance with the rules of the corresponding sport modality, graduating them according to their severity;
  2. principles and criteria that ensure differentiation between the mild, serious and very serious nature of the infractions;
  3. a detailed system of penalties, in accordance with the rules of the corresponding sports modality;
  4. a detailed system of gradation of sanctions corresponding to each one of the infractions, as well as the causes or circumstances that exempt, attenuate or aggravate the responsibility of the offender or infringer, its form of application and the requirements of extinction of responsibility;
  5. prohibition of double sanctions for the same facts, the application of favourable retroactive effects and sanctioning for non-typified infringements prior to the time of their commission; and
  6. application of the principles governing the exercise of disciplinary and sanctioning powers.5

The process by which a responsibility is attributed is contemplated in the Organic Law of Administrative Procedures,6 with exception of any infractions made by a person in the developing of a sports meeting or a training session. No one may be sanctioned for life or for an indefinite period, and every person sanctioned shall have the right to an appeal before an instance higher than the body that ordered the sanction. Article 767 of the Sports Law Act states that:

The National Sports Institute is empowered to apply suspension or cancellation penalties for recognition, licenses and registrations to the leading and directing entities of social organizations promoting sports and professional sports when they incur violations of the law and its regulations or when the sports hierarchical entity of said organizations so requests it to the governing body, as a consequence of the violation of the statutory and regulatory provisions and once the administrative procedure has been fulfilled, in accordance with the Organic Law of Administrative Procedures, or the that is applicable in accordance with the legal system.

ii THE DISPUTE RESOLUTION SYSTEM

i Access to courts

The Sports Law Act anticipated the Sports Justice Commission,8 which is entitled to rule the decisions referred to clubs, athletes and other sports stakeholders, when facing severe infractions such as contractual matters, doping, technical arbitration or electoral disputes controversies. The Commission is composed of a Sports Dispute Resolution Chamber, and a Mediation and Education Commission, in addition to a Lawyers Commission. These rulings are only appealable in the state courts.

The Commission's creation was approved in 2018 by the Venezuelan Olympic Committee and is now functioning.

ii Sports arbitration

Besides the Sports Justice Commission, is the Conciliation and Arbitration Business Centre9 (CEDCA), 'a non-profit civil association, founded in 1999, dedicated to promoting conciliation and arbitration as alternative methods for the economic and effective resolution of commercial disputes, within the framework of national and international legal system'. The CEDCA is an independent centre, linked to the Venezuelan-American Chamber of Commerce and Industry, to which natural or legal persons, public or private, can go to solve their commercial conflicts.

Among the members of this organisation, there are many experts in sports law matters who could eventually constitute an arbitral court on sports-related conflicts.

Before the Sports Justice Commission and the CEDCA, any sports stakeholder can decide its sports-related matter to either local courts, the correspondent federation or arbitration courts.

iii Enforceability

As in many other areas of the law in Venezuela, while the legal framework is enough, the enforcement system is very weak. Once a decision is ruled by a sports governing body or an arbitral tribunal in Venezuela, it will be executed through the sports entity corresponding and is only appealable to the courts as an administrative dispute, in accordance with the provisions of the Sports Law Act. In this case, the actors will be facing a factual problem instead of a legal problem.

iii ORGANISATION OF SPORTS EVENTS

i Relationship between organiser and spectator

Article 79 of the Sports Law Act states a list of violations of the law, in which No. 12 explicitly talks about the obligation of a sports event organiser to provide all security measures to grant safety and prevent any type of violence within the sports facilities. The most common example, unfortunately, is how the violence in south American football has obligated organisers to develop programmes to prevent encounters between opposite teams' fans; the lack of these types of measures is considered a direct violation of this law.

ii Relationship between organiser and athletes or clubs

The same article mentioned in subsection i, but under item No. 13, establish how organisers must provide all security measures for the practise of the physical activity. More specifically, a literal interpretation of this Article could exempt event organisers as it talks about employers and workers of a sports organisation; however, a broader interpretation could arise when a club host a sports event such as a football game, where it is fully responsible for its own workers, from players to technical staff, and also is responsible for the visiting team; notwithstanding, this Article clearly states the obligation to an organiser of grating safety to any athlete or club involved in the event.

iii Liability of the organiser

In Venezuela, there are no regulations that refer especially to the organisation of sporting events. However, the infractions and sanctions referred to in the Sports Law Act are applicable. Organisers also have civil and criminal responsibility.

Article 1.185 of the Civil Code10 states as follows:

The one who intentionally, or through negligence or recklessness, has caused harm to another, is obliged to repair it. Reparation must also be made by those who have caused harm to another, exceeding, in the exercise of their right, the limits set by good faith or by the object in view of which this right has been conferred.

Likewise, any subject that has a right that links it to the event organiser, whether legal or contractual, may require it.

In criminal law, the exercise of criminal action will depend on the nature of the crime. In general, it will be exerted ex officio by the Public Ministry, unless it is a crime of private instance.

Article 24 of the Penal Act11 states that: 'the criminal action must be exerted ex officio by the Public Ministry, unless it can only be exercised by the victim or at his request.' Also, it is stated in the Penal Act that any crime of private instance can only be exercised by the victim, the actions that arise from the crimes that the law establishes as a private instance and their prosecution will be done according to the special procedure regulated in the referred act.

iv Liability of the athletes

In this case, when talking about liability of an individual athlete, a distinction must be made between a situation that arises from normal sports activity, versus a situation that derives from an action that clearly does not come out of what you can consider normal playing action. Think of a foul committed during a football game. According to its level of severity, the action could finish in a disciplinary sanction executed by the team or the sports governing body. If, instead, the action committed is not a severe foul but an actual physical attack towards another player, outside of game action, or a punch against a spectator, the athlete will be liable for criminal or civil actions as the case may be.

v Liability of the spectators

There are no specific laws that regulate the liability of a spectator; thus, civil and criminal liability will rely on any persons that commit a fault during the realisation of any sports events as it would be if the action were committed elsewhere.

vi Riot prevention

As there is no specific law to prevent riots during sports events, cases must be analysed exactly as detailed in Section III.i. Article 79 of the Sports Law Act, under item No. 12, explicitly talks about the obligation of a sports event organiser to provide all security measures to grant safety and prevent any type of violence within the sports facilities.

Among these measures, the hosting club will have to sustain a cooperative relationship with the local police to act in case of a possible riot. Depending on the level of risk, determined by the nature of the match itself, a club will always evaluate the possibility of increasing the actions to be taken to grant the security of all actors involved in the event.

iv COMMERCIALISATION OF SPORTS EVENTS

i Types of and ownership in rights

Among the definitions contained in the Sports Law Act, there is one called 'economic management sports organisations'.12 These organisations are defined as public or private entities created under private law dedicated to the production and commercialisation of goods and services associated with sports.

In Article 61 of the Act, it clearly specifies what sports-related rights can be exploited in Venezuela, as follows:

  1. the provision of the public service for the promotion, development, training and administration of sports, physical activity and physical education;
  2. the organisation of professional sports practice, including professional clubs and leagues;
  3. the production and commercialisation of goods and services associated with sport, physical activity and physical education; and
  4. the intermediation of professional contracts, sponsorship or representation of athletes, professional or not.

ii Rights protection

Venezuela does not have a specific law to protect sports-related rights; all rights established by law are those listed in the Sports Law Act, specifically in the article explained in Section IV.i of this chapter.

The principal issue for a right holder to seek protection of its right is to fully comply with the requirements listed by the law, mainly the registration in the National Sports Registry to be recognised as a sports entity.

Article 9 of the Sports Law Act13 establishes that all actors involved in the sports business must file for registration before the National Sports Registry to gain legal recognition and to eventually be a legal right holder. The business can therefore seek its protection from:

  1. any social organisation that promotes sports;
  2. professional sports entities, agents and scouts working within Venezuela;
  3. companies directly or indirectly managing any sports facility;
  4. companies dedicated to the direct or indirect managing of a social or recreation club;
  5. companies that manufacture, import, store, distribute or commercialise sports equipment; and
  6. any other entity indicated by the Directory of the National Sports Institute.

iii Contractual provisions for exploitation of rights

Venezuela does not have any mandatory provisions to be included in a licence agreement or in a right purchase contract. While the object of the contract is lawful, as would be the case with sports rights, there are no restrictions established by law for the conclusion of contracts of this kind. Regarding licence agreements, the main topics to address within the contract are territoriality, duration and limitations to the exploitation for the rights.

v Professional sports and labour law

i Mandatory provisions

The Labour Law Act14 contains a chapter dedicated to workers of professional sports. This chapter touches topics that must be addressed in every contract between an athlete and a club. A labour contract between an athlete and its club must be in writing and it should address all conditions towards the relation of work as well as the regime of transfers from one entity to another. Unless expressly stated, the relationship will be considered indefinitely. According to local legislation, every worker must have a day to rest within every week. This day is Sunday according to Article 184 of the Labour Law Act; however, due to the nature of the sports activity, when a professional sports worker does not enjoy his or her Sunday as a rest day, the employer will be obligated to compensate with the granting of another day within the week as a day for rest.

ii Free movement of athletes

Neither the Sports Law Act nor the Labour Law Act prevents a limit on foreign players in professional teams; however, depending on each sport, a different rule will apply towards the presence of foreign players in each competition.

Using baseball as an example, Chapter V of the Venezuelan Professional Baseball League by-laws15 explicitly regulates the presence of foreign players participating in each club. Article 5.1 states that each team participating in the championship must not exceed seven imported players. Also, if an imported player gets disincorporated or replaced from the weekly active roster by a team at any time or under any circumstance, he or she will not be allowed to be reinstated until the next 14 continuous days from the day of his or her disincorporation.

iii Application of employment rules of sports governing bodies

Article 218 of the aforementioned Labour Law Act defines a sports worker as any athlete that with professional character acts per a salary, under the dependence of an employer, constituted by an sports entity. The same article states that sports workers will be governed by the provision of the law, its regulation and international treaties with foreign sports organisations, as long as these do not conflict with local legislation.

This being said, when using football in Venezuela as an example, it is regulated by the Federation of Venezuelan Football,16 which is duly affiliated to the South American Football Conference17 and FIFA.

The Venezuelan Professional Baseball Championship goes completely in hand with the Winter Agreement, which is a treaty made between the Caribbean Professional Baseball Confederation18 and Major League Baseball (MLB)19 that regulates the participation of players that belong to any MLB organisation in the professional leagues of the countries.

vi SPORTS AND ANTITRUST LAW

As indicated in Section I.iii, sports organisations for profit and private law that carry out an economic management of sport would be subject to the Antitrust Law,20 which regulates the exercise of economic competition and sanctions actions that favour unfair competition.

vii SPORTS AND TAXATION

The Venezuelan Law of Income tax21 states that athletes that reside in Venezuela must pay income tax for their enrichments worldwide, and athletes not resident in Venezuela must pay income tax for enrichments from their activities in Venezuela. The income obtained by athletes residing in Venezuela is taxed with income tax according to the general regime applicable to residents in Venezuela, regardless of whether the cause or source of income is in the country. With the objective of avoiding double international taxation, when the income of the athletes comes from activities abroad or their cause is outside Venezuela, the tax paid abroad may be credited against the tax to be paid in Venezuela.

If the income received by the athlete resident in Venezuela for activities carried out in a country with which Venezuela has signed an agreement to avoid international double taxation, the provisions of the agreement will apply, allowing the state to tax income as the method that will be applied to avoid double international taxation.

viii SPECIFIC SPORTS ISSUES

i Doping

Doping is not contemplated in the Penal Act as a criminal offence; however, according to Article 79(6) of the Sports Law Act, failure to comply with the controls for the detection of the use of prohibited substances is considered an offence under the Sports Law Act, punishable by fines between 1,000 tax units (TU) and 3,500 TU.

In Venezuela, the Professional Baseball League created its own anti-doping programme,22 with the intention of increasing control measures on the consumption of prohibited substances and thus guarantee fair competition, the health of the players and the performance of the sport to the public.

This programme establishes sports-type penalties with suspension to participate in the league from five games up to three seasons.

ii Betting

The law that regulates this matter is the Venezuelan Lottery Act23 and it does not contemplate prohibitions for sports betting. There are no restrictions within our legal framework for sports betting as it is completely legal in Venezuela, and cross-border bets are 100 per cent viable.

iii Manipulation

The Sports Law Act does not include the manipulation of results of a sports match; however, each sport has regulations within their by-laws, and incorporates or creates commissions to prevent match-fixing. Venezuela still needs to improve its legal measures to attack this problem, which affects all actors involved in the sport business.

iv Grey market sales

Equally, there is no specific prohibition within the legal system to prevent grey market sales. Sadly, the corruption involved in the business has been stronger than the desire to solve this situation that affects sports fans throughout the country year after year.

Baseball fans in Venezuela are the most affected by this practice because this is the sport in which the local tournament gets the most fans to visit stadiums during the whole season. Other than baseball, international football games involving the national team or a club competing in Copa Libertadores would be the most attractive to ticket resales.

ix The Year in Review

As it is internationally known, Venezuela is immersed in one of the largest economic, political and social crises in the history of the region. Currently, with a usurping regime maintaining power at all costs, most countries in the world have placed their eyes on the development of the present crisis, waiting for a resolution.

During the past few years, the United States has employed sanctions as a policy tool in response to activities of the Maduro regime. The President of the United States has issued executive orders, administrated and enforced by the Office of Assets Control (OFAC) of the United States Department of the Treasury, which prohibit trade or financial transactions and other dealings by US persons, unless authorised by OFAC. US persons must comply with OFAC regulations, including all US citizens and permanent resident aliens regardless of where they are located, all persons and entities within the United States, all US-incorporated entities and their foreign branches.

As a result of these sanctions, MLB has stated as follows:

MLB has been in contact with the relevant government authorities regarding the Executive Order issued by President Trump on Venezuela. MLB will fully adhere to the policies implemented by our government. With respect to the Venezuelan Winter League, MLB will suspend its involvement in that league until it receives direction from the relevant agencies that participation by affiliated players is consistent with the Executive Order.24

The scope of this decision taken by MLB in adhesion to the sanctions imposed by the United States on the Venezuelan regime, significantly compromises the development of the professional baseball championship, since practically 95 per cent of the players who are members of Venezuelan teams belong to these MLB organisations, either in minor leagues or at the highest level.

Venezuelan regime authorities have declared, after knowing MLB's position on sanctions and its decision, that the championship should be developed in any way and at any cost. The Venezuelan Professional League typically starts in the second half of October; at this point, the schedule has not yet been published and so it remains to be seen how this year's championship will take place.

x OUTLOOK AND CONCLUSIONS

It is incredible how the players in the national women's football team continue to face high levels of discrimination, very little economic support and a highly differentiated treatment compared with men's sport despite having achieved so much.

This being said, countries such as the United States, Colombia, Australia, Venezuela and Sweden lead all the tables related to incoming and outgoing transfers of players, which reflects the significant growth of women's football and, interestingly, these countries are not usually among the countries most involved in transfers of the men's football. According to the study published by FIFA entitled 'Women's transfers in ITMS',25 eight of the 10 associations whose clubs were reflected in the top of international transfers participated in the FIFA World Cup in Canada in 2015, and seven of them were in the top 15 of the FIFA's Women's World Rankings. The development of discipline in different latitudes has led to the substantial growth and development of their athletes.

The case of Venezuela is interesting; although it has not yet participated in a women's football competition, its under-17 and under-20 categories always achieve outstanding performances in international competitions, which places them in the global focus. In 2018, Venezuela, after the United States, was the country with the most transferred players with a total of 64. After the under-17 South American Championship, held in Barquisimeto, Venezuela, in 2016, Venezuelan Daniuska Rodríguez was nominated for Puskas Award at the Best Gala. The following year, after his brilliant participation in the Jordan World Cup 2016, Deyna Castellanos, also Venezuelan, was nominated again for the Puskas Award and was among the three finalists for the Best Player Award of the season with Lieke Martens and Carli Lloyd. Similarly, players such as Sandra Luzardo, Nayluisa Cáceres, Verónica Herrera, Michelle Romero, Gabriela Garcia, Lourdes Moreno and Oriana Altuve are already beginning to take great steps in their professional development.

In October 2017, FIFA made a historic decision in favour of the development and growth of women's football when, in an amendment to the statutes, women's football was included in the obligations that all international transfers of players be carried out under the International Transfer Matching System. However, FIFA is still indebted to women's football because when women's football was excluded from the solidarity mechanism and training rights compensations, a significant void was created that exempted female junior football development schools from receiving monetary incentives after the training of a player. FIFA's application of the mechanisms without distinction from men's football could have created an obstacle for the transfer of players from one country to another; however, the solution is to create a system that encourages transfer, without forgetting the junior football schools that are currently feeding the world of women's football.


Footnotes

1 Pablo Roberto García Pacheco is a junior partner at Hoet Pelaez Castillo & Duque.

3 The Sports Law Act, Article 27.

5 The Sports Law Act, Article 74.

7 The Sports Law Act, Article 76.

8 The Sports Law Act, Article 77.

12 The Sports Law Act, Article 6(11).