After weeks of speculation, the FIA finally confirmed on Monday that Aston Martin and Red Bull had breached Formula 1’s cost cap last year.

But rather than this being the end of a process that has already been under the spotlight for a while, what happens next is potentially more intriguing as the governing body moves towards potential punishments.

The matter looks almost certain to be drawn out though, with F1’s Financial Regulations explicit in the formal process that needs to be gone through.

Plus, the procedural breaches that Aston Martin and Red Bull were found to have made will bring a different range of sanctions compared to the minor overspend breach the Milton Keynes-based squad has also committed.

Accepted Breach Agreement

The first avenue that will be open to Aston Martin and Red Bull is what is referred to as an Accepted Breach Agreement (ABA).

This is where the teams accept they have done wrong, and agree to abide by certain actions that will be taken by the FIA’s Cost Cap Administration.

To go through with an ABA, teams must acknowledge they broke the rules, accept and observe any sanctions handed out, agree to bear costs and waive any rights they have to challenge the ABA.

The ABA can then lay out obligations for the team to fulfil, provide for enhanced monitoring, impose financial penalties and certain minor sporting penalties, and set out costs the teams must face.

As an enticement to go down the ABA route, teams that are deemed to be deserving of a minor sporting penalty, cannot lose constructors’ championship points, drivers’ championship points or a reduction in the cost cap, which are options if they try to challenge the cost cap decision.

This leaves them only with the possibility of a public reprimand, suspension from one or more stages of a competition (excluding the race) or limitations on aerodynamic or other testing.

Cost Cap Adjudication Panel

If Aston Martin and Red Bull do not accept an ABA, or the FIA deems that it is not appropriate to go down that route, then a hearing of the Cost Cap Adjudication Panel will be set up.

This panel is made up of between six and 12 judges elected by the FIA General Assembly who will then hear the details of the cases, including representation from the teams and any witnesses who are relevant to the matter.

After the hearing, a verdict must be reached by a majority of the judges on whether the party was guilty or not. In the event of a deadlock, the nominated president of the hearing will have a further casting vote.

The panel will then hand out any of the sanctions detailed in the rules.

Should a guilty team not be happy with the outcome, then a further appeal could be made to the FIA’s own International Court of Appeal.

The punishments

The financial rules are clear in terms of the potential sanctions that can be handed out for teams in breach of the rules.

For the procedural rules breaches – which can include late submissions, a failure to cooperate with the Cost Cap Administration, or supplying inaccurate information – the rules state that a financial penalty will be given out.

The only exception to this is if there are sufficient mitigating factors that exists for there to be no further action, or if there was a sufficient aggravating factor in which case a minor sporting penalty in addition, or in lieu, of the financial penalty can be given.

In terms of the minor overspend, which is classified as being less than 5% over the limit that Red Bull has been found to have made, the Cost Cap panel can impose a financial penalty and/or a minor sporting penalty.

The rules lay down six options that it classifies as a minor sporting penalty.

These are a public reprimand, deduction of constructors’ championship points, deduction of drivers’ championship points, suspension from one or more stages of a competition (excluding the race), limitations on aerodynamic or other testing, or a reduction of the cost cap.