FIFA's ethics committee said in a statement that the gifts breached the organisation's code of ethics and should not have been accepted. However, it said it would not instigate proceedings against officials who return the watches by Oct. 24.
"(The) CBF should not have offered the watches, and those who received gift bags should have promptly checked whether the items inside were appropriate and, upon discovering the watch, either returned it or....reported the matter," said FIFA's ethics committee in a statement.
"In an effort to resolve this matter expeditiously, the investigatory chamber (of the ethics committee) will not pursue further formal ethics proceedings in this matter against officials who submit the Parmigiani watch they received from CBF.....by no later than October 24, 2014."
The ethics committee said the CBF distributed 65 gift bags, each containing a Parmigiani watch, to a group comprising the officials on the FIFA executive committee, a representative from each of the 32 national associations taking part in the World Cup and representatives from other South American national associations.
The statement said the matter came to light when several officials reported it to the ethics committee and handed in their watches.
The CBF, which co-operated with the investigation, produced records indicating that it obtained the watches from Parmigiani, a CBF sponsor, at a price of $8,750 each, it added.
An independent appraisal of the watches determined they had a market value of just over $25,000 each, later confirmed by a second appraisal in Zurich.
"The FIFA code of ethics plainly prohibits such gifts," added the statement. "Football officials may not offer or accept gifts that have more than 'symbolic or trivial value.'
"If in doubt, gifts shall not be offered or accepted."
It said that officials "are expected to be aware of the importance of their duties and concomitant obligations and responsibilities."
"The Investigatory Chamber and CBF have agreed that, following the Oct. 24 deadline, all watches submitted to the investigatory chamber will be donated to an independent non-profit organisation or organisations committed to corporate social responsibility projects in Brazil.
FIFA said it had declined to distribute watches distributed by Hublot, its official timekeeper, to executive committee members following advice from the ethics committee.
(Reporting by Brian Homewood, editing by Ed Osmond)
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