Here is the full FIA report:
An Accepted Breach Agreement (“ABA”) dated 25 October 2022 has been entered into by the Cost Cap Administration and AMR GP Limited (“AMR”) in accordance with Article 6.28 of the FIA Formula One Financial Regulations (“Financial Settlement”). The Financial Regulations are published by the FIA and form part of the terms and conditions of participation in the FIA Formula 1 World Championship.
The Cost Cap Administration acknowledged that: (a) notwithstanding ACC’s determination of breach of process, AMR’s relevant costs during the 2021 reporting period were below the cost cap of 2021; (b) AMR acted cooperatively throughout the review process and endeavored to provide additional information and evidence upon request in a timely manner; (c) this is the first year of full application of the Financial Regulations, which are a very complex set of rules to which competitors have had to adapt; (d) there is no accusation or evidence that AMR at any time sought to act in bad faith, dishonestly or fraudulently; (e) it also did not deliberately withhold information from the Cost Cap Administration and (f) that AMR did not derive or seek to derive any benefit from the inaccurate exclusions or adjustments of certain costs .
The Cost Cap Administration has deemed it appropriate in these circumstances to offer AMR an ABA to resolve this matter on the terms set forth below, given the limited nature of the breach at issue and AMR’s willingness to accept the breach and to cooperate with the Cost Cap Administration. This offer was accepted by AMR.
ABA concerns:
• A breach of process committed by AMR pursuant to Article 8.2(e) of the Financial Regulations due to its failure to file accurate annual reporting documents relating to the 2021 annual reporting period because it excluded and/or inaccurately adjusted costs in calculating its relevant costs.
Summary of ABA Terms and Sanctions
Consistent with the findings of the Cost Cap Administration, AMR has acknowledged that the reporting documentation it submitted included the following costs that were incorrectly excluded and/or adjusted:
1. Costs in accordance with Article 3.1(h)(i) of the Financial Regulations (regarding costs relating to the new F1 team headquarters);
2. Understatement of the relevant costs with regard to the provision provided for in Article 4.1(b)(ii) (concerning the R&D tax credit);
3. Costs in accordance with Article 3.1(h)(i) of the Financial Regulations (concerning the costs relating to the new F1 simulator);
4. Cost under Financial Regulation 3.1(o) (regarding additional wind tunnel fees);
5. Fees in accordance with Financial Regulation 3.1(i) (regarding certain signing bonus fees);
6. Understatement of relevant costs under the provisions set out in Financial Regulation 4.1(a)(ii) (regarding the use of Transferable Items);
7. Understatement of relevant costs compared to the provision set out in Financial Regulation 4.1(f)(i)(B) (regarding second-hand inventory);
8. Charges in accordance with Articles 3.1(h)(i) and 3.1(i) of the Financial Regulations (regarding service desk charges);
9. Cost in accordance with Financial Regulation 3.1(i) (regarding the cost of catering services provided to staff at their factory headquarters);
10. Cost in accordance with Financial Regulation 3.1(i) (regarding the cost of desks and chairs);
11. Understatement of relevant costs under the provisions set out in Financial Regulation 4.1(h) (regarding unrecorded costs and losses relating to the cost of services rendered by sponsors);
12. Cost in accordance with Financial Regulation 3.1(j) (regarding the cost of services rendered by outsourced staff);
AMR has therefore admitted that it has breached Financial Regulation 8.2(e) by reason of its failure to file accurate annual reporting materials relating to the 2021 full-year reporting period because the reporting materials that she submitted included exclusions and/or the adjusted costs listed above.
On this basis, AMR agreed to 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 Cost Cap Administration’s decision to enter into the ABA constitutes its final decision resolving this matter and is not subject to appeal. Failure by AMR to comply with any of the terms of the ABA will result in a further breach of procedure under Articles 6.30 and 8.2(f) of the Financial Rules and automatic referral to the Cost Cap Arbitration Committee. .
