The Court of Arbitration for Sport says Federation Internationale de Football Association was right to let Manchester City sign teenager Benjamin Garre from Argentine club Velez Sarsfield.
He was 16 when he signed for City in 2016, but Argentine officials have accused the Premier League side of tapping him up when he was still 15, and pointed to Federation Internationale de Football Association rules that say no player can leave their home country until they are 18 unless the player's parents move countries for "non-footballing reasons".
Velez claim City acted unethically by approaching Garre when he was just 15, before signing him days after his 16th birthday.
City could have been prohibited from signing players for up to two transfer windows had they lost the case.
While City may have committed those actions, Federation Internationale de Football Association took the view that because Garre has an Italian passport, he was allowed to leave Argentina as soon as he turned 16. Benjamin Garre (standing) in action for Man City academy team. CAS says its judging panel has dismissed Velez's appeal against a Federation Internationale de Football Association ruling that cleared Man City of wrongdoing.
"We're angry because City came after our player, we said no and they took him anyway", declared Velez club secretary Bernardo Bertelloni past year.
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That is why a court case that was heard in July past year, with a verdict due by the end of September, has been delayed.
CAS says its judging panel dismissed Velez's appeal against a Federation Internationale de Football Association ruling that cleared City of wrongdoing.
And BBC Sport understands that Cas has now upheld that verdict.
Garre spent his first season with City in the youth ranks and played his first games at Under-18 level in the "Final Stage" of the Under-18 Premier League. If they are found guilty however, they would have the right to appeal, which could then delay any transfer embargo.
Regulations dictate that clubs within the European Union (EU) are not allowed to sign player from outside under the age of 18 - this can of course be sidestepped if the player's family relocates as was the case when Barcelona signed a 13-year-old Lionel Messi in 2000.
The ban was for two years, although the second year, set to begin on June 30, 2018, will be suspended for three years.