The Investigatory Chamber of the independent UEFA Club Financial Control Board (CFCB) declined AC Milan's application for a voluntary agreement regarding Financial Fair Play (FFP), the governing body announced Friday.
Chinese-owned AC Milan showed losses of around €255 million over the last three seasons, following a spending spree last summer, but UEFA permits a limit of €30 million in losses over that time period. UEFA explained that the Italian outfit will "continue to be subject to the ongoing monitoring process" and will be assessed again in 2018.
"After careful examination of all the documentation and explanations provided, the Chamber decided not to conclude a voluntary agreement with AC Milan," reads a statement published on UEFA's website.
"In particular, the Chamber considered that, as of today, there are still uncertainties in relation to the refinancing of the loans to be paid back in October 2018 and the financial guarantees provided by the main shareholder."
Without a voluntary agreement in place, Milan could now face sanctions such as financial penalties and squad and salary restrictions. For example, Manchester City and Paris Saint-Germain were both fined €60 million and had their European squads reduced from 25 players to 21 back in the 2013-14 season for failing to comply with FFP rules.