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Red Bull receives big penalty from FIA for breaching cost cap

The decision comes after the team was found to have overspent Formula 1's cost cap by about $1.8 million.

The Red Bull Formula 1 team is required to pay a $7 million fine and forfeit 10% of its aerodynamic development allowance after agreeing a settlement with the FIA for breaching the cost cap. After the Japanese Grand Prix, it was revealed that Red Bull were the only team to breach the $145 million budget cap by $1.8m. As exclusively revealed last week by RacingNews365.com, the overspend was committed in four main areas, namely catering, sick pay, unused spare parts and United Kingdom tax rebate issue. The team had, though, initially committed an overspend of $5.6 million which was reduced to $1.8m after clarification talks about overspend items with the governing body. These resulted in a reduction of $3.8m. Thus, in addition to what is termed a ‘minor breach’ – below $5m – in the Financial Regulations, the team committed a procedural infringement due to not having lodged its final submissions by the 31 March deadline. However, the FIA have today confirmed that Red Bull has settled via what is known as an Accepted Breach Agreement (ABA). This means the team accepts wrongdoing and receives financial and sporting penalties as opposed to more draconian penalties up to and including potential points deductions or disqualification from the championship.

Red Bull penalties

The team, led by boss Christian Horner, initially disputed that they had breached the cost cap limit, but via the ABA have effectively admitted doing so, albeit through differences in interpretation of the regulations. The fine is, though, not deducted from the current cost cap, meaning Red Bull does not actually forfeit $7 million in performance spend, although development will be hit by the 10% deduction in aerodynamic and CFD allowances. Red Bull were already set to have the least amount of development time for the 2023 car, having won the '22 Constructors' Championship, with the teams finishing at the top getting less time than those at the bottom on a sliding scale.

Verstappen title

The news of Red Bull receiving a monetary and development penalties also rules out the prospects of Max Verstappen losing his 2021/22 titles. The FIA found that Red Bull did not fraudulently overspend the cost cap and were at all times open and transparent throughout the process and displayed a willingness to reach an equitable settlement over the breach. This is a developing story.

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