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F1 cost cap: FIA proposes Red Bull ‘accepted breach agreement’

by Scott Mitchell-Malm
3 min read

The FIA has proposed the terms of an ‘Accepted Breach Agreement’ to Red Bull after determining the team broke Formula 1’s budget cap in 2021, The Race understands.

Red Bull was the only team found guilty of exceeding the new-for-2021 cost cap when the FIA recently completed its analysis into every team’s financial data.

It also committed a procedural breach, as did Aston Martin. Williams was found guilty of a procedural breach earlier this year.

Red Bull expressed surprise and disappointment when the FIA’s conclusion was communicated a day after Max Verstappen won the 2022 F1 title at the Japanese Grand Prix.

The team said it would “carefully review the FIA’s findings” as it remained adamant that the relevant costs were under the 2021 cost cap amount.

But Red Bull did not explicitly state it would challenge the decision from the FIA, only that it would follow the process outlined by the financial regulations and “consider all the options available to us”.

As part of that process, the FIA may pursue what is called an ‘Accepted Breach Agreement’ (ABA), which can be struck in cases of both a procedural breach or a minor overspend breach.

The benefit of this is that it draws a swift line under any scenario involving a breach and cannot be appealed.

It allows financial penalties or some of the available ‘minor sporting penalties’ defined by the regulations – a public reprimand, suspension from one or more stages of a competition [event] but not the race itself and limitations on aerodynamic and other forms of testing.

Crucially, it cannot include points deductions or a reduction in the team’s future cost cap, as all financial penalties in respect of a financial regulations breach are exempt.

A points deduction or future budget cap reduction are both penalties that would be available if a team were found guilty of a minor breach and an ABA was not proposed or accepted.

To agree to an ABA, Red Bull would have to accept that it has committed a breach and agree to whatever penalties or conditions are attached to it.

Any enhanced monitoring procedures must be agreed to, Red Bull would bear the costs detailed in the ABA, and waive its right to challenge it.

F1 Grand Prix Of Japan

It is unclear whether Red Bull is willing to agree to that. However, it has been suggested that the team is planning a press conference at the United States Grand Prix on Friday to discuss the matter.

If an ABA is agreed to, the FIA is obliged to detail the breach, any sanctions and any enhanced monitoring procedures, but can omit “any confidential information”.

If it isn’t accepted, then the case will be evaluated by the cost cap adjudication panel, and the full range of penalties will be on the table.

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