World Title and Continental Championships

Proposed regulatory framework

These Regulations establish financial reporting, an adjusted break-even requirement, a limited deficit allowance and the distribution of championship income under the Formula One Organization framework. They apply to World Title and Continental teams and, where expressly stated, to FOO, promoters and development-fund recipients. There is no uniform team spending ceiling. Compliance requires both the prescribed regulatory result and evidence that the team can meet its full financial obligations

Article 1 Scope and authority

1.1 Application and objectives

1.1.1        The Formula One Organization (FOO) is the participant-governed body responsible for the World Title. Each Continental Championship is administered by its Continental FOO. Unless expressly distinguished, FOO means the body responsible for the Championship concerned. Team means the legal competitor accepted under the Sporting Regulations; it does not mean a holder of a driver’s Super Licence.

1.1.2        These Regulations form part of the conditions of participation. They seek to support financially sustainable teams, fair access to competition, accountable distribution of championship resources and regional development. They do not require teams to spend equal amounts or guarantee equal competitive performance.

1.1.3        A team shall submit a credible pre-season budget targeting a non-negative Regulatory Result and independently audited annual reporting. One deficit period may be authorised within any rolling three counted reporting periods under Article 5. A second deficit in that window leads to exclusion under Article 8. The express first-season arrangement in Article 9 is the only entrant-specific exception to the counting rule.

1.1.4        Financial eligibility is additional to sporting, technical and safety eligibility. An accounting exclusion does not exempt a team from paying an obligation or demonstrating that it can fund it. Approval of an entry or a budget is not a guarantee by FOO of the team’s liabilities.

1.2 Governance and separation of functions

1.2.1        FOO shall appoint a Financial Administration to monitor compliance and an independent Financial Judicial Panel to decide contested breaches and sanctions. Investigators shall not adjudicate their own cases. The FIA retains its safety and licensing responsibilities; it does not administer this financial system.

1.2.2        The governance, electorate, common-control safeguards and 51% approval rule in the Sporting Regulations apply. These Regulations do not replace participant representation with a World Title assembly composed only of Continental delegates. FOO may establish coordination arrangements between Championships without changing voting rights by administrative decision.

1.2.3        FOO may employ qualified staff, auditors and external specialists for necessary work under an approved budget. No external commercial shareholder is entitled to FOO distributions. Genuine financing liabilities do not confer ownership or a residual share of championship income.

1.2.4        Changes shall be approved and published before the reporting period to which they apply, except for procedural changes that do not prejudice substantive rights. No interpretation may create a new levy, exclusion, spending restriction or retrospective accounting exemption. Changes to common financial provisions require approval by every affected FOO.

1.3 Regulatory priority and commencement

1.3.1        These Regulations govern financial calculations, reporting, distributions and financial sanctions. The Sporting Regulations govern entries, points and event procedures. A specific financial provision governs an express financial exception; it shall not silently alter car eligibility or technical freedom.

1.3.2        The first applicable season, reporting periods and administrative schedules shall be identified in an adoption instrument. The superseded 2021 publication details and proposed 2023 commencement date have no operative effect. This is a proposed FOO framework, not an FIA-issued financial rulebook.

1.3.3        Applicable statutory accounting, tax, employment and other legal duties remain separate. FOO’s decisions determine championship compliance and do not determine criminal guilt, discharge debts or substitute for statutory filings.

Article 2 Reporting boundary and accounting basis

2.1 Reporting group

2.1.1        Each team shall identify its legal entity, ultimate controlling parties, related entities and all entities undertaking Championship Activities for or on its behalf. Control includes the practical power to direct financial or operating policies, whether through ownership, agreements or other arrangements. Related parties include controlling owners, controlled businesses, key management and their connected persons.

2.1.2        The Reporting Group shall capture all Championship Activities attributable to the team, irrespective of which entity employs personnel, owns facilities, pays invoices or holds contracts. Separate entities shall not be used to conceal expenditure or manufacture income. The team shall procure access to relevant records held by those entities.

2.1.3        Championship Activities include designing, developing, manufacturing, purchasing, testing and operating cars; team administration and commercial activity; and permitted component supply conducted as part of the team’s business. All on-track and off-track development is within scope unless an express exclusion applies.

2.1.4        Unrelated businesses may be excluded only through a documented separation of both income and costs. Shared resources shall be allocated on a reasonable, consistent and evidenced basis, such as actual usage or staff time. Entire group turnover shall not be counted while only the racing division’s costs are reported.

2.1.5        Transactions within the Reporting Group shall be eliminated. The same cost, receipt or asset contribution shall not be counted twice. A separate supplier’s independent business does not automatically form part of a team’s Reporting Group, but work performed for or on behalf of the team remains reportable.

2.2 Annual accounts and regulatory reconciliation

2.2.1        A team shall prepare underlying accounts using the recognised accounting framework applicable to it, consistently applied. Regulatory schedules shall reconcile those accounts to the Championship reporting boundary and to every adjustment required here. Regulatory adjustments do not authorise misleading statutory accounts.

2.2.2        The annual package shall include a statement of financial performance, financial position, cash flows and changes in equity, with accounting policies, commitments, contingencies and explanatory notes. Where statutory periods differ from the Championship period, audited bridging accounts shall cover the complete regulatory period without gaps or overlap.

2.2.3        The Regulatory Result is Eligible Income less Included Costs for the reporting period. A result of zero or more satisfies the adjusted break-even test. The Deficit is the amount by which Included Costs exceed Eligible Income. Audit materiality does not create an automatic permitted deficit or reporting threshold.

2.2.4        Eligible Income and Included Costs are determined on an accrual basis. Payment dates alone shall not move earned income or incurred costs between periods. Contract advances shall be recognised when earned; unpaid obligations shall not be omitted. Estimates shall be reasonable, documented and corrected when better evidence becomes available.

2.2.5        A separate Full Funding Statement shall cover all activities and obligations of the team, including excluded costs, capital commitments, taxes, financing and repayment obligations. Its purpose is to demonstrate affordability and liquidity, not to create a second uniform spending cap.

2.3 Eligible income and financing

2.3.1        Eligible Income comprises income attributable to Championship Activities, including sponsorship, commercial agreements, broadcasting or media entitlements, FOO prize allocations, marketing activities and permitted component sales, subject to the adjustments below. Entitlement, performance of obligations and recoverability shall be supported by evidence.

2.3.2        Prize income shall reflect a supportable entitlement to the relevant season’s allocation. A speculative championship result or an unapproved distribution shall not be booked as earned income. Forecast budgets may use reasoned sporting assumptions, accompanied by a downside scenario and an explanation of funding if those assumptions fail.

2.3.3        Cash subscribed as share capital, other owner contributions in the capacity of owner, borrowing proceeds, debt converted into equity and transfers of accumulated reserves are financing, not Eligible Income. They may support the Full Funding Statement but shall not erase a Regulatory Deficit. Genuine related-party sponsorship may count only for the substantiated commercial value of services supplied.

2.3.4        A purported donation, grant, sponsorship, asset sale or debt waiver shall be assessed by its substance. Owner support shall not be relabelled as earned commercial income. Non-owner grants may count when recognised under the applicable accounting framework, subject to restrictions and the matching provisions below.

2.3.5        Restricted receipts shall not fund unrelated activities. A grant reimbursing an excluded expense shall be excluded to that extent; the corresponding cost remains excluded. A research grant for an included cost may be shown as income or as a reduction of that cost, but not both. Asset grants shall not create immediate operating income merely because cash has been received.

2.3.6        Bad debts, cancellations, refunds and credit losses affecting Eligible Income shall be recognised in the appropriate period. Recoverable consumption taxes collected for public authorities are not income. Disposal and revaluation gains subject to Article 3 are excluded symmetrically with corresponding losses.

2.4 Related parties and supplied resources

2.4.1        Teams shall disclose related-party contracts, payments, free services, assets, guarantees and other support. Included costs shall reflect resources actually consumed for the team, even where a related party pays the supplier directly. No uncharged resource may be omitted merely because the entrant receives no invoice.

2.4.2        Related-party income shall not exceed the amount supportable on independent commercial terms. Related-party expenditure shall be adjusted to a supportable independent value where the charged amount understates the resource received. Any actual excess cost remains in the Full Funding Statement; an above-market charge shall not artificially increase a permitted regulatory deficit.

2.4.3        Free or discounted in-kind sponsorship shall be recorded at an evidenced value with the corresponding resource cost, subject to the same exclusion rules as a purchased resource. It does not create cash available to pay unrelated obligations. Resources already accounted for within the Reporting Group shall not also be charged at an imputed value.

2.4.4        Where market comparisons are unavailable, the Financial Administration may require a reasoned independent valuation using relevant cost, usage and commercial evidence. It shall explain a proposed adjustment and allow the team to respond before making a contested finding.

2.4.5        Permitted World Title supply to independent Continental customers shall record both earned supply income and the associated costs on a consistent basis. Development used by the World Title team shall not be moved entirely into an exempt supplier activity. Financial recognition does not authorise a supply arrangement prohibited by the Sporting or Technical Regulations.

2.5 Currency and records

2.5.1        A team may select its reporting currency before the period begins and shall use it for forecasts, actual reporting and comparative schedules. Foreign-currency transactions shall follow its disclosed accounting policy. A currency change requires an explained reconciliation and shall not reset compliance history.

2.5.2        FOO shall publish a recognised exchange-rate source and conversion method before the period for USD-denominated fees and for consolidated reporting. Historical 2020 exchange rates and cost-cap indexation tables are not incorporated. The deficit levy is a percentage and may be assessed directly in the team’s reporting currency.

2.5.3        Books, contracts, source invoices, bank evidence, allocation records and regulatory reconciliations shall be retained for at least five complete reporting periods after the relevant period, and longer while a proceeding or applicable legal retention requirement remains outstanding. Records shall be retrievable and protected against unauthorised alteration.

Article 3 Included costs and exclusions

3.1 General treatment

3.1.1        Included Costs comprise all expenses and losses attributable to Championship Activities before the express exclusions and adjustments in this Article. They include car development, manufacture, purchased components, testing, engineering, operations, non-driver personnel, logistics, entry fees, insurance and administration unless expressly excluded.

3.1.2        An exclusion removes an item only from the Regulatory Result. Every excluded item shall remain visible in the annual accounts, the exclusions schedule and the Full Funding Statement. A team shall identify the nature, amount, beneficiary and basis of each exclusion and shall not claim the same amount under more than one category.

3.1.3        Where an activity is partly excluded and partly included, only the evidenced excluded portion may be removed. Job titles, invoice descriptions or contracts alone do not determine substance. Ordinary development and testing shall not be described as marketing, heritage activity or building work to obtain an exclusion.

3.2 Operating exclusions

3.2.1        Direct marketing costs are excluded, including identifiable promotional events and associated personnel and equipment travel. Testing or performance-development work undertaken at the same event remains included. Ordinary commercial sponsorship and marketing income remain Eligible Income unless a specific matching exclusion applies.

3.2.2        Remuneration and directly attributable travel and accommodation of race, reserve and test drivers are excluded, including payments to connected parties for the driver’s services. A mixed driver, engineering or management contract shall be apportioned according to actual duties. Driver-related payments shall be disclosed in full.

3.2.3        Costs and income directly attributable to genuine heritage activities and unrelated businesses are excluded together. Running an older car for current performance development is not heritage activity. Sale or licensing of current technology is not excluded merely because the customer competes in another Championship.

3.2.4        Corporate income tax is excluded from the Regulatory Result. Recoverable taxes are not costs. Other taxes attributable to an included activity remain included unless another express provision applies. Tax liabilities and payment dates remain part of full funding and liquidity reporting.

3.2.5        Property rent, business rates and property taxes are excluded. A facility service charge shall be separated between property occupation and supplied engineering or operating services; the latter remain included where attributable to included activities. Interest and financing charges are not automatically excluded as property costs.

3.2.6        Employee bonuses under a written performance-bonus scheme adopted before the first Competition are excluded up to 20% of the fixed annual remuneration of non-driver employees attributable to included activities. The excess is included. Fixed remuneration excludes bonuses and amounts already excluded under another category. No additional inherited USD 10 million or USD 12 million ceiling applies.

3.2.7        Actual salary and employment costs directly attributable to maternity, paternity or sickness absence, and genuine employee termination benefits, are excluded. Reimbursements are matched to the excluded cost. Replacement staff performing normal racing or development work remain included; ordinary remuneration cannot be relabelled as leave or termination compensation.

3.2.8        FOO financial penalties and the deficit levy are excluded from the Regulatory Result, including their reversal or refund on the income side. They remain payable and fully reported. Their exclusion prevents a levy or penalty from mechanically generating another regulatory deficit; it does not waive the sanction.

3.3 Assets and investment

3.3.1        Capital expenditure on facilities and durable assets is not subject to a separate numerical cap. Properly capitalised investment shall be disclosed with its purpose, timing, funding and commitments. Expenditure recorded as an expense may be removed only where it is directly attributable to construction of a genuine new facility; routine car research, repairs and maintenance shall not be reclassified as facility construction.

3.3.2        Depreciation, amortisation, impairment and revaluation movements on tangible and intangible assets, and gains or losses on their disposal, are excluded. Gross sale proceeds are not a substitute source of Eligible Income. The funding and replacement of assets shall be addressed in the Full Funding Statement.

3.3.3        Capitalisation shall not remove car development, components or consumables from the calculation indefinitely. Expenditure on current or future racing development shall be included when incurred, whether expensed or capitalised. Inventory components shall be included when consumed, fitted for use, lost or written off, with corresponding adjustments preventing a later depreciation or inventory charge being counted again.

3.3.4        The team shall maintain opening and closing registers for previously included development and inventory amounts. The opening register on adoption shall be independently verified so that historical amounts are neither omitted nor charged twice. General research facilities and durable machinery are treated as assets; the salaries, materials and services used in racing development remain subject to the normal activity rules.

3.3.5        New buildings, wind tunnels and other excluded investments require demonstrated financing. An asset exclusion does not allow a team to commit funds it cannot obtain, defer payment dishonestly or disregard the consequences of debt service.

3.4 Other adjustments and full funding

3.4.1        Foreign-exchange gains and losses recognised in financial performance are excluded symmetrically from the Regulatory Result. Actual cash effects, foreign-currency exposures and settlement obligations remain in full funding reporting. Currency movements do not excuse non-payment.

3.4.2        Finance costs attributable to the team remain included unless expressly excluded elsewhere. Loan principal repayments, dividends and other equity distributions are not operating costs in the Regulatory Result, but shall be disclosed as cash uses. A team shall not make owner distributions that leave its obligations unfunded.

3.4.3        Offsets shall be reconciled so the Financial Administration can identify both sides of a transaction. A government subsidy, insurance recovery, credit or reimbursement shall benefit the regulatory calculation once only. Compensation for an excluded loss is excluded to the corresponding extent; compensation for an included loss follows the applicable accounting recognition requirements.

3.4.4        The Full Funding Statement shall show available cash, reasonably collectible receivables, committed financing, liabilities, excluded spending, capital payments and monthly cash requirements for at least the next twelve months. It shall include a downside case for reduced prize or sponsorship income and identify restrictions on the use of funds.

3.4.5        Owner capital may support liquidity when paid or evidenced by an enforceable commitment from a demonstrably capable funder. A comfort letter, an unsupported promise or anticipated future borrowing is insufficient. Borrowing may fund obligations only with a credible repayment plan; its proceeds are never treated as earned income.

3.4.6        An adverse liquidity finding is separate from a Regulatory Deficit. The Financial Administration shall require a corrective plan and, where continued participation threatens unpaid essential obligations, seek a reasoned participation restriction from the Judicial Panel. There is no automatic entitlement to compete merely because the adjusted calculation is non-negative.

Article 4 Budgets reporting and certification

4.1 Reporting calendar

4.1.1        Each Championship shall publish a twelve-month reporting period aligned with its season before entry applications open. It shall normally end on the last day of the month containing the scheduled final Competition. Subsequent periods shall be contiguous. A season spanning calendar years shall not be divided into two deficit tests merely for that reason.

4.1.2        A postponement of an event does not automatically extend the reporting period. FOO shall publish any necessary bridge and attribution treatment consistently for all affected teams. A change shall not omit transactions, duplicate income or erase a deficit history.

4.1.3        The pre-season budget and Full Funding Statement shall accompany the entry application, with an update no later than 30 days before the first scheduled Competition. The budget shall cover the whole reporting period, planned exclusions, financing and the expected Regulatory Result.

4.1.4        An interim report covering the first four months is due within 60 days after that interim period ends. It shall include year-to-date performance, an updated annual forecast and cash-flow outlook. Annual audited reporting is due within 90 days after the full reporting period ends. Deadlines expire at 18:00 UTC; a deadline falling on Saturday or Sunday moves to the following Monday.

4.1.5        A substantiated request for a reporting extension shall normally be submitted before the deadline. The Financial Administration may grant a written extension where necessary to obtain reliable reporting, without changing the period or permitting spending that is otherwise prohibited. Entry and participation conditions remain separately assessable.

4.2 Annual submission and audit

4.2.1        The annual package shall contain the audited accounts or audited bridging accounts; Reporting Group structure; Regulatory Result reconciliation; exclusions and related-party schedules; grant and component-supply schedules; development and inventory registers; Full Funding Statement; and the team’s three-period deficit history. Any requested deficit settlement shall accompany the submission.

4.2.2        The CEO and CFO, or equivalent authorised officers, shall sign declarations of completeness and accuracy. The team principal shall confirm operational completeness, and the controlling party shall confirm the disclosed group boundary and support commitments. A small team may assign more than one role to one person but shall identify each responsibility.

4.2.3        An independent, appropriately qualified audit firm shall examine the underlying accounts and the regulatory reconciliation. Its report shall identify the framework, scope, qualifications and limitations. An audit does not transfer the team’s responsibility for reporting accuracy to the auditor.

4.2.4        The Financial Administration may approve auditors against published competence and independence criteria and may appoint another firm to investigate identified risks. A team’s own preparer shall not provide purportedly independent assurance over the same work. Necessary specialist valuation or assurance work may be required proportionately.

4.2.5        A qualified opinion, missing evidence or unresolved uncertainty shall be assessed for its actual effect. It is not automatically fraud, but the Administration shall not issue an unconditional certificate without sufficient evidence of compliance.

4.3 Monitoring and certificates

4.3.1        Teams shall notify the Financial Administration within ten days of discovering a material error, probable annual deficit, loss of committed funding, insolvency event or material inability to pay obligations. Updated reporting shall explain the cause, quantified effect and proposed response. Notification does not itself establish a breach.

4.3.2        Following review, the Administration shall issue a reasoned status: compliant; compliant subject to an authorised deficit settlement; first-season transitional status; or referred for adjudication. A status shall identify unresolved matters, conditions and the reporting period concerned. A certificate is not a statutory solvency opinion.

4.3.3        Where the next season begins before the previous period’s review is complete, entry may be provisional on current evidence and express conditions. Pending reporting does not erase prior obligations. Final adverse findings remain enforceable, and a provisional entry shall not guarantee retention of participation rights or prize entitlements.

4.3.4        An error or later final prize adjustment shall be attributed to the period to which it belongs and reconciled transparently. The Administration may reopen a certificate for material new evidence, fraud or a necessary correction after notice and an opportunity to respond. It shall not impose duplicate sanctions for the same established facts.

Article 5 Deficit allowance and levy

5.1 Rolling period test

5.1.1        A team with a Regulatory Deficit may request a One Year Deficit Settlement only if neither of its preceding two counted reporting periods contains a Regulatory Deficit. Every established deficit counts, whether a settlement was granted, refused or never requested. Unrelated procedural breaches do not consume a deficit allowance.

5.1.2        An accepted settlement permits that one deficit period subject to these Regulations. The team shall target and achieve a non-negative Regulatory Result in the next two counted periods. Surpluses in another period do not cancel a deficit year, and averaging three years does not satisfy the rule.

5.1.3        The settlement request shall explain the deficit, provide audited supporting figures, identify how all obligations and the levy will be funded and present a credible recovery plan. A known forecast deficit shall be notified promptly; an intentional deficit budget cannot be presented as meeting the pre-season break-even target.

5.1.4        The Administration shall approve an eligible, fully evidenced request with adequate funding and recovery arrangements, or provide written reasons for refusal and refer a contested refusal to the Judicial Panel. A settlement cannot waive fraud, concealment, prohibited supply or another independent breach.

5.2 Levy calculation and payment

5.2.1        An authorised deficit attracts a levy of 1% of the final Regulatory Deficit. This is equivalent to USD 10,000 per USD 1 million of deficit. The rate applies proportionately to the entire deficit, including amounts below or between whole millions; it is not rounded down to million-dollar bands.

5.2.2        The levy is calculated before adding the levy itself, which is excluded under Article 3. A deficit of USD 25 million produces a levy of USD 250,000. No progressive rate bands are imposed by this version of the Regulations.

5.2.3        The levy shall be paid in four equal quarterly instalments commencing 30 days after the settlement becomes final and ending within twelve months. The final instalment shall correct rounding. A more rapid voluntary payment is permitted. Where a shorter or differently phased schedule is necessary, it requires a written agreement that does not reduce the amount due.

5.2.4        Unpaid levy obligations remain payable during withdrawal, exclusion or a change of ownership. A levy may be set off against an otherwise payable FOO distribution after written notice; the distribution and the levy shall still be recorded separately and in the proper periods.

5.3 Repeated deficits and exceptional events

5.3.1        A second Regulatory Deficit within any rolling three counted reporting periods is not eligible for settlement. The Judicial Panel shall impose the next-season exclusion specified in Article 8. Paying a larger levy or accepting a fine is not an alternative to that exclusion.

5.3.2        Force majeure may justify an extension, an adjusted payment schedule, targeted assistance or mitigation of a discretionary sanction. It does not erase an actual deficit from the rolling count or waive the mandatory consequence of a second deficit. A fall in expected income is not automatically force majeure.

5.3.3        Any exceptional system-wide change responding to an economic or other emergency shall follow the FOO amendment process and apply on published, objective terms. An individual team shall not obtain a retrospective break-even exemption by discretionary administrative agreement.

5.3.4        A settlement acknowledges only the agreed deficit and associated conditions. Being audited or investigated does not require admission of a breach, acceptance of contested allegations or waiver of appeal.

Article 6 Financial Administration

6.1 Powers and independence

6.1.1        The Financial Administration shall review reports, issue certificates, administer settlements, investigate suspected breaches and refer contested findings to the Judicial Panel. It shall maintain a common compliance register across the World Title and Continental Championships to prevent circumvention through entry transfers.

6.1.2        FOO shall provide an approved operating budget and appoint competent financial personnel under published independence and conflict rules. A person with a material relationship to a team shall not handle that team’s assessment. Teams represented in the FOO assembly shall not direct an individual investigation or obtain competitors’ confidential submissions.

6.1.3        The Administration may request relevant records, explanations, interviews and access to business premises or electronic systems. Requests shall identify their purpose, scope and reasonable deadline. Access shall respect applicable law, legal privilege, personal-data protections and the need to separate unrelated information.

6.1.4        A claim of privilege or legal restriction shall identify the category and basis without disclosing protected substance. The parties shall seek lawful alternative evidence or independent review. A bare assertion of confidentiality does not excuse withholding relevant non-privileged business records.

6.2 Guidance complaints and investigations

6.2.1        The Administration may publish advisory guidance and anonymised interpretations. A team’s CFO may request a written clarification; the response shall be shared with other teams after confidential details are removed. Guidance shall not alter substantive Regulations.

6.2.2        A formal competitor complaint shall identify the team, relevant provision, alleged conduct and supporting evidence, and shall be signed by the complainant’s CEO and CFO or equivalents. Separate teams require separately identifiable allegations. Complaints shall be made in good faith on reasonable grounds.

6.2.3        The Administration shall assess substantiated complaints and give reasons for declining formal investigation. It may also investigate credible information from other sources; failure to meet the competitor-complaint format shall not suppress reliable evidence of a breach. Malicious fabrication may itself be referred for disciplinary action.

6.2.4        Before an adverse referral, the team shall receive the substance of the proposed findings and a reasonable opportunity to answer. Evidence preservation may be required immediately. Investigations shall be proportionate, recorded and conducted without unnecessary delay.

6.3 Confidentiality and publication

6.3.1        Confidential information shall be accessible only to authorised persons who need it for their function. Auditors, experts, administrators and judges shall be bound by confidentiality obligations and secure handling requirements. Published decisions shall explain the rule, findings and sanction while redacting unnecessary commercial or personal details.

6.3.2        FOO shall publish certification status, accepted deficit settlements and final decisions, including the deficit and levy where applicable. Publication shall distinguish allegations, provisional findings and final outcomes. Disclosure to competent public authorities shall follow applicable requirements and shall not be presented as a finding of criminal guilt.

Article 7 Adjudication and appeals

7.1 Financial Judicial Panel

7.1.1        Each responsible FOO shall maintain a Financial Judicial Panel of seven independent judges, with a designated President. Judges shall have appropriate professional qualifications and substantial experience in law, accounting, audit or financial regulation; the Panel collectively shall cover both legal and financial expertise.

7.1.2        Judges shall be elected through the applicable FOO governance process for three-year terms, with a maximum of three terms. A replacement fills the remaining term of a vacant seat. Conflicts shall be disclosed; a conflicted judge shall be replaced for the case by a qualified independent alternate selected under the published appointment procedure.

7.1.3        All seven deciding judges shall hear or review the evidence and participate in the decision. At least four concurring votes are required. A judge shall not abstain to avoid deciding; incapacity or a conflict requires substitution and sufficient rehearing to preserve fairness. Investigators and commercial executives involved in the case shall not sit as judges.

7.2 Hearing and decision

7.2.1        The Panel shall hear contested reporting findings, settlement refusals, repeated deficits, unpaid levies or fines, alleged false reporting and other breaches. It may also determine disputes expressly assigned to it under the FOO distribution and promoter provisions, subject to the parties being bound by this framework.

7.2.2        The respondent shall receive written allegations, the relevant rules and evidence, reasonable preparation time and an opportunity to present documents, witnesses, expert evidence and submissions through a representative. Necessary further hearings may be held; the case is not restricted to one hearing or evidence delivered only by lawyers.

7.2.3        FOO bears the burden of establishing an alleged breach on the balance of probabilities. Intentional false reporting requires specific evidence of knowing or reckless falsification; a good-faith accounting disagreement or corrected mistake does not alone establish fraud. The team bears the evidential burden of substantiating claimed exclusions and settlement eligibility.

7.2.4        Decisions shall be written, reasoned and communicated to the parties and FOO, identifying facts, accounting adjustments, sanctions, effective dates and appeal rights. Sanctions shall be proportionate except where these Regulations prescribe a mandatory consequence. A confidentiality order shall not conceal the operative decision.

7.3 Appeal and effect

7.3.1        A team directly affected by an adverse financial decision may appeal findings, interpretation, sanctions or a material procedural failure. Appeal is not limited to a breach labelled procedural. A competitor has no automatic right to reopen another team’s certificate merely because it disagrees, but may submit evidence under Article 6.

7.3.2        An appeal shall be filed within 21 days after notification of the reasoned decision and accompanied by the EUR 2,000 deposit required under the Sporting Regulations. It shall state its grounds and requested remedy. A separate three-member independent appeal panel, with no involvement in the original case, shall decide by majority under published FOO judicial procedures.

7.3.3        The appeal panel may confirm, vary, set aside or remit a decision. New evidence requires an explanation of why it was not reasonably available earlier. Deposit refunds and procedural costs shall follow the published judicial schedule and shall not be determined by an interested participant.

7.3.4        A timely appeal suspends payment of the disputed financial penalty or levy until determination. It does not automatically stay a sporting exclusion or a protective participation restriction; a separate reasoned stay may be granted. Undisputed debts remain payable. An appeal shall not authorise conduct prohibited by safety requirements.

Article 8 Breaches sanctions and payment

8.1 Procedural and payment breaches

8.1.1        Procedural breaches include late or missing reporting, failure to provide relevant information, obstruction of an investigation and inaccurate or incomplete reporting not established as intentional false reporting. The Administration shall specify deficiencies and a reasonable correction deadline where correction remains possible.

8.1.2        The Panel may impose a warning, financial penalty, enhanced reporting or, for serious or aggravated conduct, a constructors’ points deduction or participation restriction. A minor good-faith error corrected promptly need not attract a penalty. Correction does not erase a deficit revealed by accurate reporting.

8.1.3        Unpaid final levy instalments or fines constitute a payment breach. The team shall receive a written arrears notice and an opportunity to prove payment, an applicable stay or an authorised extension. If the amount remains overdue, the Panel shall order suspension from participation until settlement or an approved payment arrangement; additional sanctions depend on the circumstances.

8.1.4        Financial penalties are payable within 90 days after notification of a final decision unless the decision specifies a different lawful timetable. Following an appeal, the unpaid amount becomes due within 90 days after the appeal decision unless a shorter period is expressly justified. Deficit levies follow Article 5 instead.

8.2 Deficit and false reporting sanctions

8.2.1        For a second deficit within three counted periods, exclusion shall cover at least one complete subsequent Championship season. Where the finding becomes final before the next season begins, that next season is the excluded season. If it becomes final after that season has begun, exclusion covers the next complete season not yet begun; the Panel may additionally restrict the remaining current events where justified by funding risk or deliberate delay.

8.2.2        An ineligible or unfunded first-deficit settlement request shall be adjudicated on its facts. The Panel may impose conditions, financial sanctions or exclusion where continued participation is not financially supportable. This shall not be treated automatically as the mandatory second-deficit case.

8.2.3        Established intentional false reporting shall result in exclusion from the affected season, removal of the sporting results and associated championship prize entitlements of the offending entry, and exclusion from at least one complete subsequent season under the timing rule above. The decision shall identify the affected entry, drivers’ results and resulting classification revisions; it shall not imply that an innocent driver personally committed fraud.

8.2.4        Amounts already paid without a remaining entitlement shall be recoverable. FOO shall implement consequential classifications and distributions under Article 10. Relevant evidence of suspected criminal conduct shall be referred to competent authorities where required or appropriate; the sporting decision does not itself establish a criminal offence.

8.3 Proportionality and reinstatement

8.3.1        Aggravating factors include dishonesty, concealment, repeated breaches, obstruction, deliberate delay and attempts to evade regulation through related entities. Mitigating factors include prompt voluntary correction, cooperation and genuinely exceptional external events. Mitigation shall not remove a mandatory exclusion expressly required here.

8.3.2        No sanction shall impose a disguised permanent budget cap or an unpublished technical-development restriction. A financial sanction shall identify the amount and payment basis; a sporting sanction shall identify the Championship, season, entry and affected results.

8.3.3        Reinstatement requires satisfaction of the exclusion period, due payments or approved arrangements, current financial eligibility and the ordinary sporting entry conditions. Reinstatement is not automatic and is not barred indefinitely merely because a historic deficit remains in the record. Existing history continues to be considered under Article 9.

Article 9 New entrants and continuity

9.1 First season

9.1.1        A genuinely new team may receive a first-season exemption from the Regulatory Deficit counting rule. It shall nevertheless submit the pre-season budget, interim report, full audited annual package and Full Funding Statement, and comply with all disclosure, payment and anti-fraud obligations from entry.

9.1.2        A deficit in that approved first season does not attract the Article 5 levy and does not enter the rolling three-period count. The exemption does not excuse unpaid obligations, deliberate false reporting or an unsupported entry budget. The first counted period is the second season’s reporting period; the counting window builds as subsequent periods become available.

9.1.3        The exemption shall be recorded in the team’s entry decision and public compliance register. It applies once to the genuinely new operation, not each time the same business changes name, ownership, legal entity or Championship. It does not confer a new-team entry fee where the Sporting Regulations treat the entry as a continuation.

9.2 Transfers withdrawal and return

9.2.1        FOO shall assess continuity by the substance of the racing operation, including control, personnel, assets, business transfer and sporting entry. A successor continuing substantially the same operation inherits the relevant regulatory history and participation conditions; the decision shall be reasoned and appealable.

9.2.2        Counted periods are consecutive regulatory periods for the continuing operation, not merely seasons in which it elects to race. Withdrawal shall not by itself reset the count. A returning team shall provide audited intervening reporting needed to establish its position; where that evidence is absent, the prior adverse history shall not simply be presumed to have expired.

9.2.3        A team excluded for a season shall provide continued reporting relevant to its return, including outstanding liabilities and the recovery plan. An owner or corporate reorganisation shall not discharge obligations owed to FOO or create a second start-up exemption.

Article 10 FOO income promoters and distributions

10.1 FOO accounts and distributable surplus

10.1.1      FOO shall account separately for championship operations, team distributions, Continental transfers and restricted development funds. It shall publish an annual budget and independently audited annual financial report with a reconciliation of the distributable surplus. World and Continental accounts shall identify inter-FOO transfers so consolidated ecosystem totals do not count them twice.

10.1.2      FOO income may include broadcasting, sponsorship, licensing, other commercial agreements, entry fees, final fines and levies, and promoter profit shares. Borrowing is financing, not revenue. Restricted donations or grants shall follow their stated purpose and shall not be treated as unrestricted distributable income.

10.1.3      The Distributable Surplus is unrestricted recognised championship income less necessary and approved operating costs, applicable taxes and financing charges, adjusted for approved reserve contributions or releases and uncovered prior operating losses. Team distributions and transfers calculated from that surplus are not deducted a second time. No investor dividend or ownership return is an allowable deduction.

10.1.4      The annual budget shall identify reserve purposes, targets and expected release dates. Reserves shall be limited to evidenced obligations, working capital, committed investment or contingencies and approved under FOO governance. FOO shall not use unexplained reserves, related-party charges or excessive management remuneration to avoid the distribution percentages.

10.1.5      The calculation shall be reconciled to cash and liabilities. Unrealised or doubtful receipts shall not support unsafe cash advances. A positive allocation may be paid in published instalments as cash becomes available; an amount retained solely pending collection remains payable to the entitled beneficiaries. A negative surplus creates no negative prize allocation or automatic claim against teams.

10.1.6      FOO shall appoint an accountable commissioner or executive director under its governance arrangements. Procurement, remuneration and related-party contracts shall be disclosed and approved with conflicts managed. Necessary professional advice is permitted; projected savings shall not be described as money already realised.

10.2 Promoter event profit

10.2.1      A promoter shall pay no fixed hosting or race-sanctioning fee to FOO. It shall contribute 40% of positive Eligible Event Profit and retain 60%. No contribution is due where Eligible Event Profit is zero or negative, and FOO does not automatically share the loss.

10.2.2      Eligible Event Profit is the promoter’s attributable event income less eligible event costs, calculated before deducting the FOO contribution. The agreement shall identify the promoter and controlled event entities. Related entities shall not divert ticketing, hospitality or sponsorship income outside the calculation while leaving event costs inside it.

10.2.3      Event income includes tickets, promoter-operated hospitality, local sponsorship, concessions, merchandising, event grants and other receipts attributable to hosting the event. Refunds and recoverable consumption taxes shall be treated appropriately. Income belonging directly to FOO under a separate rights agreement is not also promoter income; genuine agency receipts shall be distinguished from the promoter’s own sales.

10.2.4      Eligible costs include reasonable attributable staffing, security, medical provision, insurance, temporary works, venue use, utilities, event promotion, event-specific finance costs and applicable event taxes. A transparent allocation of shared annual venue costs and depreciation may be allowed. Entire construction costs or unrelated venue losses shall not be charged to one event merely to eliminate its profit.

10.2.5      Attributable income tax shall be calculated on the event result before the FOO contribution, using a documented method agreed before the event; any tax benefit arising specifically from deducting that contribution shall not create a circular profit-share calculation. Actual tax remains governed by applicable law. FOO’s own taxes are separately accounted for.

10.2.6      The FOO contribution itself, owner distributions, financing principal, unrelated expenditure, regulatory fines and above-market related-party charges are not deductible event costs. An owner’s injection or loan is not event income. An event operating grant may be income when earned; a restricted capital grant shall follow the disclosed accounting treatment.

10.2.7      The promoter shall submit independently assured event accounts within 120 days after the event and pay the assessed contribution within 30 days after acceptance. FOO may require proportionate audit work for material or higher-risk events. Estimated payments are permitted only with reconciliation and no fixed minimum fee.

10.2.8      Late refunds, claims, tax adjustments or other material corrections shall be reconciled to that event. Overpayments shall be refunded or credited by agreement; underpayments remain due. Disputes shall follow the contractual financial procedure, with access to independent adjudication. Undisputed amounts shall be paid on time.

10.3 World Title allocation

10.3.1      Ninety per cent of the World Title Distributable Surplus shall form the constructors’ prize pool. Ten per cent shall form the Continental support pool. These percentages apply after the deductions in Article 10.1, not to gross commercial revenue or promoter turnover.

10.3.2      The Continental support pool shall normally be divided equally among the eight Continental Championships. Each therefore receives one eighth of that pool, equivalent to 1.25% of the World Title Distributable Surplus. It is not 1.25% of World Title gross income.

10.3.3      An exceptional unequal allocation requires a published reason, objective evidence of regional need and approval under World Title FOO governance with conflicts managed. The allocation shall remain within the 10% pool unless the Regulations themselves are amended. A dormant Championship’s share shall be earmarked or reallocated under a published decision; it shall not become an undisclosed management surplus.

10.4 Continental allocation and development

10.4.1      Each Continental FOO shall recognise its own earned income and its allocated World Title transfer, cover its approved costs and calculate its own Distributable Surplus. Seventy-five per cent shall form its constructors’ prize pool and 25% shall be assigned to a restricted regional development fund.

10.4.2      The World Title transfer is included once in the Continental calculation and is not automatically reserved wholly for development. Restricted grants with a different specified purpose shall be accounted for separately and shall not be redistributed contrary to their conditions.

10.4.3      Development funds may support driver and karting schools, engineering and motorsport-management education, academies, local teams, and circuit or facility development. Awards shall follow published eligibility, selection, conflict-of-interest and reporting requirements. Related-party awards shall receive independent scrutiny.

10.4.4      Funds shall be disbursed against approved purposes, milestones and evidence of use. Unspent or recovered amounts remain restricted for regional development and carry forward; they shall not become ordinary prize money or an owner distribution. Misuse may result in suspension, recovery and referral for independent adjudication.

10.4.5      A team receiving development support shall disclose the award and apply the income and matching rules in Article 2. A grant cannot be counted both as ordinary earned income and again as financing, or used to fund an activity outside the award conditions.

10.5 Team prize schedules and entry fees

10.5.1      Each FOO shall publish its constructor-prize percentage schedule before entries open. Shares shall total 100% of the relevant team pool and decrease with championship position, subject to ties. The schedule shall specify the treatment of changing entry numbers, unclassified entries, withdrawals, disqualifications and provisional payments. There is no fixed fifteen-team financial entitlement or entry cap.

10.5.2      The final constructor classification determines rank. One-car and two-car teams follow the same published rank schedule; no averaging or extra payment per car is introduced here. Where teams remain tied under the Sporting Regulations, the amounts for the occupied positions shall be added and divided equally among the tied teams.

10.5.3      Prize schedules shall not contain historic-owner bonuses, undisclosed individual guarantees or discretionary rewards that circumvent the published allocation. Commercial payments for genuinely separate services shall be identified and independently supportable, not disguised prize preferences.

10.5.4      FOO shall issue a provisional season distribution statement within 120 days after its reporting period ends and a final independently audited statement within 180 days, subject to identified live disputes. Undisputed amounts shall not be withheld merely because another team’s entitlement is contested. Revisions shall be notified, reconciled and paid or recovered within a published timetable.

10.5.5      A final disqualification shall trigger recalculation of the affected classification and prize schedule, recovery of overpayments and payment of revised entitlements. FOO shall not retain forfeited prize shares as extra administrative income where the published schedule redistributes them. Recovery uncertainty shall be disclosed and shall not be concealed by counting the same funds twice.

10.5.6      Entry fees remain those in the Sporting Regulations: 8% of the preceding season’s constructor-classification prize allocation for an existing team; USD 2 million for a genuinely new World Title team; and USD 500,000 for a genuinely new Continental team. Other grants and commercial income are excluded from the 8% base. Provisional invoices and final reconciliation follow the Sporting Regulations.

10.5.7      An entry fee is recognised by the team and FOO in the season to which participation relates, even if cash is paid earlier. Where prior prize money is later revised, the entry fee shall be corrected correspondingly. No additional charge may be presented as a circuit hosting fee contrary to Article 10.2.

Article 11 Environmental commitments

11.1 Programme and targets

11.1.1      FOO shall maintain a funded environmental programme covering championship operations, events, facilities and logistics. The proposal’s targets are carbon-neutral events and zero waste to landfill by 2028; renewable power for FOO-owned or operated facilities and low- or zero-carbon non-surface logistics and travel by 2030; and fully electric or other demonstrably zero/near-zero lifecycle-greenhouse-gas intra-continental surface transport by 2035, including sustainable-fuel routes meeting the published programme criteria. Sustainable fuel shall not be treated as zero emission solely because of its name or origin; lifecycle boundaries, residual emissions and local pollutant impacts shall be disclosed.

11.1.2      These dates are programme targets, not statements that compliance has already been achieved. Before adoption, FOO shall publish the baseline, scope, measurement method, interim milestones, responsible parties and funding. If adoption or evidence makes a target unattainable, a revised target requires a transparent governance decision; it shall not be silently backdated or declared achieved.

11.1.3      Emissions reporting shall distinguish direct reductions from any treatment of residual emissions and shall disclose the boundaries of a carbon-neutral claim. Waste reporting shall distinguish prevention, reuse, recycling, other recovery and disposal. A financial allocation alone does not establish an environmental outcome.

11.2 Implementation and accountability

11.2.1      Transport between events within a continent shall use road or rail where practicable under the approved logistics plan. Sea transport or other alternatives may be used for islands, unavailable infrastructure or justified operational constraints. Exceptions and their impacts shall be recorded; the 2035 transport target in Article 11.1.1 does not presume current infrastructure availability.

11.2.2      New FOO-supported circuits and buildings shall incorporate energy, water, materials and waste-efficiency principles consistent with LEED or a comparable recognised framework. A claim of certification shall require actual certification. Financial support shall be conditional on a proportionate environmental plan and shall not replace FIA safety approval.

11.2.3      FOO shall encourage teams and suppliers to move facilities to renewable power and improve new-building performance, and shall reduce unnecessary non-racing travel through remote meetings. Team incentives shall use published criteria and shall not become an undisclosed exemption from financial reporting.

11.2.4      FOO shall report annually on progress, costs, variances and corrective measures, with independent verification proportionate to the claims. Penalties for an environmental obligation require a published binding requirement and due process; missing an aspirational target alone is not intentional false financial reporting.

Article 12 Adoption and supporting schedules

12.1 Required instruments

12.1.1      Before accepting binding entries under this framework, FOO shall publish the adoption date, reporting calendar, accounting templates, exchange-rate source, opening asset-register treatment, auditor criteria, judicial and appeal procedures, prize schedules, reserve policy, promoter accounting agreement, development-fund criteria and environmental measurement programme.

12.1.2      Those instruments may implement these Regulations but shall not alter the deficit allowance, levy rate, mandatory exclusion, reporting boundary or distribution percentages without the required amendment process. A financial forecast or illustrative ecosystem budget is not a binding prize promise or evidence of guaranteed solvency.

12.1.3      FOO shall maintain a public amendment register and version history. Every substantive clarification shall identify its authority and effective date. The team and promoter accounting rules are distinct: exclusions allowed in a team’s Regulatory Result do not automatically apply when calculating promoter profit or FOO’s Distributable Surplus.