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Formula 1

‘Completely unfounded’ – FIA’s stern F1 cost cap retort explained

by Ben Anderson
4 min read

The FIA has declared speculation that some Formula 1 teams broke the cost cap in 2022 “completely unfounded”.

There have been rumours in F1 that two or more teams breached the financial regulations last year, even though the process is ongoing.

Last year, when Red Bull was found to have committed a minor breach in 2021 and Aston Martin committed a procedural breach, rumours spread in September but were not confirmed until October.

The FIA wanted to conclude proceedings quicker this year, to avoid an outcome coming nearly a full year after the previous season finished. There are 10 full-time employees working on the process now, compared to four last year.

That desired outcome is still a long way off. But the FIA has already been moved to issue a stern retort to speculation about the process.

F1 Hungarian GP

What the FIA has said

The FIA says speculation that some teams may have breached the financial regulations in 2022 is “completely unfounded”.

The process is still ongoing and no teams have been given their “certification status”. This relates to whether they complied or committed a breach.

The FIA has said that “auditing fieldwork is still ongoing and is scheduled to conclude in the upcoming weeks”. It will take longer after that to finalise the review.

There’s no specific deadline “in order not to prejudice the robustness and the effectiveness of the review”.

“There is not, and has never been, a specific deadline for certification, and any suggestions of delays to this process or potential breaches are completely unfounded,” the FIA statement added.

“The Cost Cap Administration will formally communicate its findings according to the procedure set out in the Financial Regulations. The timeframe is intentionally not fixed in order not to prejudice the robustness and the effectiveness of the review.”

Why was this necessary?

Because the process is not complete. It would appear possible that suspicions of an offence may have arisen through the process so far, as the FIA scrutinises each submission and demands more information from the teams.

But any suggestion that a breach has been committed and confirmed, even in private, does not appear to reflect reality and the FIA wants to make that clear.

It is also important to the FIA that outside observers understand there is no fixed deadline. The main purpose of this is to avoid rushing and compromising the process but it also means that speculation does not come from leaks ahead of an imminent formal announcement that everyone can anticipate.

Motor Racing Formula One World Championship Brazilian Grand Prix Qualifying Day Sao Paulo, Brazil

What stage is the process at?

The financial regulations are immensely complicated and the FIA’s process of policing them is demanding.

Teams had to lodge two submissions for the 2022 cost cap: an interim one on June 30 last year, “to allow teams to understand where they are in their projected spending and for us to try to anticipate any discussion that may take place as a result”, and a full submission on March 31 this year.

The FIA is quite far into the 2023 review of the 2022 submissions, which are 150-200 pages each. The first month after the final deadline is dedicated to an in-depth review of this information, to see what may merit further analysis.

The FIA then initiates follow-up questions, requests more documentation and conducts on-site audits, which began in May.

“We have to be realistic, because I don’t think that it will be feasible to finalise the review after one month or 45 days,” said FIA single-seater financial regulations director Federico Lodi recently. “It also depends on the findings, because if you need to open a formal investigation, it takes time. There are lawyers involved, advisory boards, so the process is a long one.”

Motor Racing Formula One World Championship Hungarian Grand Prix Race Day Budapest, Hungary

What’s at stake?

This is an extremely sensitive matter for two reasons.

The first relates to the general principle of the financial regulations. It is absolutely critical that the cost cap is applied rigorously because it has a defining impact on the competitiveness of the teams.

The second is that Red Bull was punished for a minor breach last year but rightly or wrongly there is still a cloud hanging over F1 this season due to the nature of the penalty.

Red Bull’s rivals and critics argue it was not severe enough. They say its domination of 2023 despite having its aerodynamic testing allowance reduced as punishment for its cost cap breach is proof of that.
Motor Racing Formula One World Championship Mexican Grand Prix Practice Day Mexico City, Mexico

To protect the integrity of the cost cap, further offences – whether by Red Bull or any team – in 2022 will need to be met with stricter punishments.

“If there is a breach the regulations will find it and there are consequences,” Lodi said.

The question is how severe those consequences will be.

It was said last year that a more lenient stance was taken as it was the first year of the financial regulations in action and that meant misunderstandings were possible.

Such leniency is not meant to be applied anymore. As the process comes to an end, it seems likely that the rumours have been started by senior figures in the paddock looking to put pressure on the FIA to make sure that is the case.

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