The FIA has increased monitoring of the non-Formula 1 activities of teams, including interviewing key personnel, to ensure they are not bypassing the budget cap rules.
As reported last week, the FIA has closed a potential loophole that some teams could have used to hire staff outside of the Formula 1 team to collaborate on the design and development of cars.
The concern was that some teams would employ personnel outside of the budget cap to work on separate special projects, such as designing road cars, yachts, and bicycles, and then use the extra knowledge gained that could be useful for Formula 1 operations. Teams operating in this manner could have a significant advantage over those accounting for all their activities, as the official expenditure would be lower since the extra staff would effectively work off the books.
Following concerns from several teams that non-F1 personnel would be exploited in this way, the FIA responded by issuing a technical directive earlier this year to eliminate any knowledge transferred to F1 teams that is not accounted for within the budget cap framework.
Known as TD45, it came into effect clarifying that from January 1 of this year, any intellectual property passed from a technical division to an F1 team must be included in the budget cap spend. The FIA is taking the issue seriously, and as part of a much more detailed analysis of team activities, Motorsport.com has learned that it is taking action to verify what non-F1 staff actually do.
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According to reports, as part of the enhanced monitoring introduced after the initial statements about the budget cap in 2021, a more thorough investigation has been carried out to verify non-F1 activities.
This now includes interviewing personnel who have been declared outside the scope of the Formula 1 budget cap, to better understand the projects they were working on.
Furthermore, samples of work completed by such personnel are being analyzed to ensure they are completely separate from the F1 team and that there is no knowledge transfer.
In addition to this, as part of the thorough analysis the FIA is conducting on the budget cap proposals for 2022, the top teams are facing a detailed list of about 100 questions that they must answer. The teams have welcomed the FIA’s move to focus on the areas where concerns have arisen. Initial feedback indicates that some teams have had to change their way of operating.
An authoritative source stated: “People didn’t have confidence in the old reporting system, but now it seems the FIA is taking care of it. It seems to be working.”
TD45 has been formulated in a way that allows teams to continue managing their special technical divisions rather than shutting them down completely. However, the document clarifies that while intellectual property acquired by the F1 team can be transferred and used in activities outside of Formula 1, the reverse is not permissible.
Nevertheless, the behavior of the teams will continue to be monitored to ensure compliance with the regulations and to prevent finding alternative ways to bypass the budget cap rules. The teams themselves must introduce rigorous controls to ensure that expenditures made do not exceed the budget cap limitations.
During the Canadian Grand Prix, Mercedes boss Toto Wolff revealed that his team has hired dozens of people to oversee how things work.
“We’ve created a massive organization in our finance department, consisting of 46 people, that monitors the budget cap down to the last bolt,” he explained – “It tracks the spending throughout the year, and what we’ve done is allocate resources to various projects. Last year, we stayed below that line throughout the year, and we are this year as well. Considering a normal development shift for next year, we’re still pretty much on track.” – the Mercedes boss pointed out.
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