The FIA has announced Aston Martin’s penalty for violating Formula 1’s Financial Regulations during the 2021 season.
The team was found to have committed a “procedural” violation of the rules after it submitted its 2021 expenditure in March this year. Red Bull was found to have done the same, but unlike it Aston Martin was also deemed to have exceeded last year’s $145 million spending cap.The FIA found Aston Martin had incorrectly excluded or adjusted 12 separate costs in its 2021 expenditure submission. It fined Aston Martin $450,000 (£388,000). The team must pay the fine within 30 days also cover the costs involved in the Cost Cap Ammonisation’s work.
The FIA noted “there is no accusation or evidence that AMR [Aston Martin Racing] has sought at any time to act in bad faith, dishonest[l]y or in a fraudulent manner […] nor has it wilfully concealed any information from the Cost Cap Administration and […] that AMR did not gain or seek to gain any advantage from the inaccurate exclusions or adjustments of certain costs.”
It is the third team to be penalised under F1’s Financial Regulations, which were introduced last year. Red Bull was fiend $7 million and given a cut in its wind tunnel development time for a more serious breach. Williams was fined $20,000 for a procedural error when it missed a deadline to supply one of its documents in March.
Aston Martin finished seventh in the 2021 constructors championship, ahead of Williams, Alfa Romeo and Haas.
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FIA statement on Aston Martin’s budget cap penalty
AMR Public Summary ABA / Article 6.32
An Accepted Breach Agreement (“ABA”) dated 25 October 2022 has been entered into by the Cost Cap
Administration and AMR GP Limited (“AMR”) pursuant to Article 6.28 of the FIA Formula 1 Financial
Regulations (“Financial Regulations”). The Financial Regulations are issued by the FIA and form part of
the terms and conditions of participation in the FIA Formula One World Championship.
The Cost Cap Administration recognised that: (a) notwithstanding the CCA’s determination of Procedural
Breach, AMR’s Relevant Costs during the 2021 reporting period were below the 2021 Cost Cap; (b) AMR
has acted cooperatively throughout the review process and has sought to provide additional information
and evidence when requested in a timely manner; (c), that this is the first year of the full application of
the Financial Regulations which are a very complex set of rules that competitors were required to adapt
to; (d) that there is no accusation or evidence that AMR has sought at any time to act in bad faith,
dishonesty or in a fraudulent manner; (e)nor has it wilfully concealed any information from the Cost Cap
Administration and (f) that AMR did not gain or seek to gain any advantage from the inaccurate exclusions
or adjustments of certain costs.
The Cost Cap Administration considered it appropriate, in these circumstances, to offer to AMR an ABA
to resolve this matter on the terms set out below, given the limited nature of the breach in issue, and
AMR’s willingness to accept the breach and to cooperate with the Cost Cap Administration. That offer was
accepted by AMR.
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The ABA concerns:
• a Procedural Breach committed by AMR pursuant to Article 8.2(e) of the Financial Regulations
due to its failure to file accurate Full Year Reporting Documentation in respect of the 2021 Full
Year Reporting Period because it inaccurately excluded and/or adjusted costs in the calculation of
its Relevant Costs.
Summary of ABA terms and sanctions
In accordance with the findings of the Cost Cap Administration, AMR has acknowledged that the Reporting
Documentation submitted by it included the following incorrectly excluded and/or adjusted costs:
1. Cost pursuant to Article 3.1(h)(i) of the Financial Regulations (concerning costs in respect of the
new F1 Team headquarters);
2. Understatement of Relevant Costs in respect of the provision set forth by Article 4.1(b)(ii)
(concerning R&D tax credit);
3. Costs pursuant to Article 3.1(h)(i) of the Financial Regulations (concerning cost in respect of the
new F1 simulator);
4. Cost pursuant to Article 3.1(o) of the Financial Regulations (concerning wind tunnel additional
fees);
5. Cost pursuant to Article 3.1(i) of the Financial Regulations (concerning certain signing bonus cost);
6. Understatement of Relevant Costs in respect of provisions set forth by Article 4.1(a)(ii) of the
Financial Regulations (concerning the use of Transferable Components);
7. Understatement of Relevant Costs in respect of provision set forth by Article 4.1(f)(i)(B) of the
Financial Regulations (concerning Used Inventories);
8. Cost pursuant to Articles 3.1(h)(i) and 3.1(i) of the Financial Regulations (concerning service desk
costs);
9. Cost pursuant to Article 3.1(i) of the Financial Regulations (concerning cost of catering services
provided to personnel at its factory headquarters);
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10. Cost pursuant to Article 3.1(i) of the Financial Regulations (concerning cost of desks and chairs);
11. Understatement of Relevant Costs in respect of provisions set forth by Article 4.1(h) of the
Financial Regulations (concerning unrecorded costs and losses in respect of the cost of services
rendered by sponsors);
12. Cost pursuant to Article 3.1(j) of the Financial Regulations (concerning cost of services rendered
by outsourced personnel);AMR has therefore accepted that is has breached Article 8.2(e) of the Financial Regulations due to its
failure to file accurate Full Year Reporting Documentation in respect of the 2021 Full Year Reporting Period
because the Reporting Documentation submitted by it included incorrect excluded and/or adjusted costs
listed above.On that basis, AMR has accepted the imposition of the following sanctions in full and final settlement of
the Procedural Breach:a) AMR must pay a Financial Penalty of USD 450,000 to the FIA within 30 days of the date of
execution of the ABA (Article 9.5 of the Financial Regulations);
b) AMR bears the costs incurred by the Cost Cap Administration in connection with the
preparation of the ABA.
The decision of the Cost Cap Administration to enter into the ABA constitutes its final decision resolving
this matter and is not subject to appeal. Non-compliance by AMR with any terms of the ABA will result in
a further Procedural Breach under Articles 6.30 and 8.2(f) of the Financial Regulations and automatic
referral to the Cost Cap Adjudication Panel.
This article will be updated.
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2022 F1 season
- Mercedes told me “you’re wrong” about 2022 car’s problems – Hamilton
- FIA confirms all 10 F1 teams complied with 2022 cost cap
- Steiner “not ashamed” of panning “slow” Schumacher in Drive to Survive
- Albon believes year out of F1 improved him as a driver
- Hamilton sees diversity gains in F1 years on from his ‘traumatising’ experience of racism
elchinero (@elchinero)
28th October 2022, 16:36
Teams need high-powered CPAs on-call. Think how confusing tax returns can be for Jose Blow and his family. A-M didn’t get much bennie for their bucks.
AlanD
28th October 2022, 17:20
“the costs involved in the Cost Cap Ammonisation’s work”
I have never heard that term before and cannot find it in the dictionary. Can anyone explain what “ammonisation” means. I can guessit me ans something like “Authentication” but presumably it has some more specific meaning in the world of accountancy.
bosyber (@bosyber)
28th October 2022, 17:30
I wonder whether it’s originally a French accounting term perhaps, in chemistry it is a term that can be used for breaking down, for example, amino-acids to free the nitrogen. From that i’d guess it is meant as a term describing dissecting the teams’s financial reports or something alike.
BasCB (@bascb)
28th October 2022, 20:51
The article has since been adjustec to correct that simple type guys (i.e. Cost Cap Adminstration) @AlanD, @bosyber
bosyber (@bosyber)
28th October 2022, 21:21
Hah, that simple eh, thanks @bascb
ADUB SMALLBLOCK (@waptraveler)
28th October 2022, 19:27
Perhaps amortization?
Short Circuit (@jjohn)
29th October 2022, 3:50
@waptraveler got it in one!
Matthew Ellis
28th October 2022, 19:10
So RBR breached 13 items and AMR breached 12. Difference seems to be AMR stayed under the overall cap because either they gave themselves more ‘space’ or the errors were smaller.
Either way, none of these breaches are big enough to get excited about, and if RBR do win next year given the penalty imposed they will simply be demonstrating just how capable they are.
Lets get back to the racing.
Biker56 (@biker56)
28th October 2022, 22:04
– surely ‘were fiends’?
As to Aston Martin – this seems nowhere near a serious as those Red Bull cheats.
“Red Bull – Leaves a bad taste in your mouth”