The FIA has revealed that both Alpine and Honda committed procedural breaches of the 2023 financial regulations, though neither exceeded the cost cap.

The FIA's Cost Cap Administration (CCA) has completed its review of the reporting documentation in respect of the reporting period that ended on 31 December 2023, submitted by each F1 team that participated in the 2023 World Championship and by each Power Unit (PU) manufacturer registered to supply the new generation of PU that will be introduced from 2026.

2023 is the third year of implementation of the Financial Regulations for F1 teams and the first year of implementation of the financial regulations for PU manufacturers.

The review of the reporting documentation was a thorough and intensive process spanning five months with all F1 Teams and all PU Manufacturers giving their full support in providing the required information. The CCA notes that all F1 Teams and all PU Manufacturers acted at all times in a spirit of good faith and co-operation throughout the process.

The review findings are as follows:

F1 Team review process results:

All 10 F1 teams found in compliance for 2023.

PU Manufacturer review process results:

4 PU manufacturers found in compliance for 2023, and procedural breaches identified for Alpine Racing SAS and Honda Racing Corporation (HRC).

The CCA confirms that although Alpine Racing SAS and HRC have both been found to be in procedural breach, neither have exceeded the Cost Cap level. Both Alpine Racing SAS and HRC have acted at all times in good faith and are currently cooperating with the CCA to finalise the matter.

Considering the nature of the breach, the complexities of the new financial regulations for PU manufacturers and the challenges associated with their first year of implementation it is the CCA's intention to propose to these two PU manufacturers to settle their respective breaches by means of an Accepted Breach Agreement (ABA).

A summary of the ABAs, if accepted by the two PU manufacturers, will be published once finalised as provided for by the Financial Regulations.

The financial regulations for teams were introduced from the 2021 season following unanimous approval of the teams. The intention being to limit spending in the championship to ensure its long-term viability and encourage convergence in performance between competitors, thus creating more exciting racing.

For the 2023 season, the financial regulations for PU manufacturers were introduced to regulate cost of development and supply of the new generation of Power Units that will be introduced from 2026.

The CCA has several options available to it when dealing with an alleged breach of the financial regulations. It can enter, when deemed appropriate, into a settlement referred to as an Accepted Breach Agreement with the team or PU manufacturer concerned in case of a procedural breach or minor overspend breach, or, if no agreement can be reached or the CCA considers it more appropriate, it can refer the case to the Cost Cap Adjudication Panel. In the event of an alleged major overspend breach the CCA must refer the case to the Cost Cap Adjudication Panel.

The Cost Cap Adjudication Panel comprises a panel of 12 judges elected by the FIA General Assembly in accordance with the FIA Statutes from among the candidates proposed by either the FIA Sport Member Associations entitled to vote, or a group of not less than five F1 teams, or a group of not less than three PU manufacturers.

For both teams and manufacturers, a minor overspend breach (less than 5% of the cost ccap) can result in financial penalties and/or minor sporting penalties. A material overspend breach (more than 5% of the Cost Cap), if confirmed before the Cost Cap Adjudication Panel, will result in a mandatory Constructors' Championship points deduction and can result in financial penalties and/or material sporting penalties.

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READERS COMMENTS

1. Posted by Max Noble, 11/09/2024 23:50

"@ARL - indeed so! FMD for sure, and the teams are getting the hang of it. Just reading this article gives an idea of the amount of additional bureaucracy the FIA has created! And remember they are just delivering the review for last year! Can you imagine a September announcement of a points deduction that alters the outcome of last years’ championships?! Ten months after the season finished! All in the name of making more profit for the teams. Warms my heart.
"

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2. Posted by ARL, 11/09/2024 14:50

"I seem to recall The Noble Max musing on cost caps and engine manufacturers.......

Something along the lines of Financial Manoeuvres in The Dark. "All in The Best Possible Taste" as Kenny would say."

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Alpine and Honda in procedural breach of budget cap regulations

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