Several months ago I asked the IA Takis, the chair of FIDE Arbiter’s Commission a question that had been on my mind for awhile. Within US Chess events, 2 friends often ask not to be paired if possible. I usually tell them only in the first half of a tournament, after that anything goes. I asked Takis:
His response was
Seems pretty clear that this is not allowed in FIDE rated events…
As we all found out in the last round of Gibraltar, where IM Zatonskih had to play the final round as black against her husband GM Fridman. She probably would have preferred a different pairing, considering that she stood to earn a major prize with a win. They battled to a fighting draw.
The only exception to this rule in FIDE events seems to involve pairings between an Israeli and a player from a short list of Arab federations, notably Iran and Palestine.
I was the Chief Arbiter for the 1st Washington International in 2012. Mike Atkins, who is the OP of this thread, was my Deputy Chief Arbiter. Mike may remember that we had the Foisor family in attendance: Ovidiu, his wife Cristina-Adela (RIP), and daughters Sabina-Francesca and Michaela. The younger daughter, Michaela, ended up playing both mom and dad, and the husband and wife also played against each other! The only one who “escaped” without playing a family member was Sabina!
Yes, that was interesting. All Takis said for families like this is to not let them play in the last round in a swiss and in a RR to arrange the lots so they play in Rounds 1 or 2.