Formula 1 managing director, Ross Brawn, warned in 2019 that the financial regulations set to be imposed in 2021 were serious, and anyone breaking would lose their championship.
F1 had previously tried to impose financial restrictions of sorts, but there was no signed agreement that no one could spend more than a certain amount of money.
This meant that teams could continue spending as much as they wanted with no repercussions, and any prior arrangement was redundant.
In 2019, however, the FIA world motorsport council ratified an official spending cap that prohibited teams from spending more than $175 million.
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This was lowered to $145 million due to the effects of the COVID-19 pandemic, and all teams had to stay within those boundaries.
They were also required to document their spending for the FIA to review, so that they could ensure that there was no financial trickery getting past them.
Last week, Red Bull and Aston Martin were mentioned in a report that suggested that two teams had overspent last year.
There were even implications that the Austrian side had been in material breach of the rules by spending $155 million, but more recent indications are that they have not exceeded the limit by more than five percent.
The FIA have delayed their final decision on which teams are to receive a certificate of compliance until next week, as they still need to correlate all the information, or decide on penalties for breaches.
After the budget cap was ratified in 2019, Brawn was adamant that there would be harsh punishments for “fraudulently” contravening the rules.
“Financial regulations are the dramatic change in F1,” he said at a press conference in Austin three years ago.
“We’ve tried for these in the past, and we’ve not been successful, I think the crucial thing about the financial regulations now is that they are part of the FIA regulations.
“So the sanctions for breaching financial regulations will be sporting penalties of some sort, depending on the severity of the breach.
“Whereas before we had the resource restriction, which was a gentlemen’s agreement between teams – well there’s not many gentlemen in the paddock I’m afraid, and that was a failure.
“But this has teeth. If you fraudulently breach the financial regulations, you will be losing your championship. So it has serious consequences if teams breach these regulations.”
The Briton also affirmed that the FIA have the personnel to enforce the spending limit.
“We’ve got a very strong team of financial experts within the FIA and within F1, and we’ve sought outside support on this,” explained Brawn.
“Deloitte are one of the experts on sports finances, they’ve been very involved with the football world, and you can see the positive effect that’s starting to have.
“They’ve been pretty well thought out, but they will need development, like any regulation.
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“I fully expect that we are going to have challenges in the future to implement this, but it’s absolutely essential for the good of F1 that we have a control on the finances and how much is spent in F1.
“They are essential for the well-being of F1. Budgets have been escalating. F1 is almost a victim of its own success in that the rewards of success are so valuable that the justification for investment keeps coming.”
Both Red Bull and Aston Martin have denied breaching the budget restrictions last year.