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UK government turns its sights on FIA grants

NEWS STORY
28/09/2017

A high-ranking politician has asked sanctions regulators at Britain's finance department the Treasury to investigate grants paid by Formula One's regulator the FIA according to an article in the Daily Telegraph by Christian Sylt.

It's nothing new to hear rights groups and politicians calling for the government to investigate issues. There's little doubt that there are more calls than investigations so you'd be forgiven for thinking that they don't make an impact. In fact that's far from the truth as this case demonstrates.

The grants at the heart of the matter are paid to the motor sport organisations which are member clubs of the FIA. The payments began in 2014 and a total of £2.7m was handed to 72 clubs last year to fund a variety of racing initiatives. As Pitpass recently reported, the FIA says the grants were funded with income from the Concorde Agreement, the contract it signed in 2013 with F1's commercial rights holder, the UK-registered company Formula One World Championship limited.

The grants aren't just paid to obvious candidates like the clubs in France and Germany but also to ones in more far-flung places like Burundi, Iran, Rwanda, Sudan, Syria and Zimbabwe. It is thanks to the payments to motor sport organisations in these countries that the FIA has raced into a storm.

The money funded a grass-roots karting programme in Burundi and Rwanda whilst Iran and Sudan received grants to train officials. There is no evidence the clubs are owned by the governments in the countries where they are based. Likewise, the legitimacy of the projects or the application process has not been called into question. The teams and drivers play no part in awarding the grants and FIA documents detail the requirements that applicants have to meet. The problem is a much more fundamental one.

As Maddy Crowther, co-Director of human rights group Waging Peace, said: "it's very worrying to hear about this programme. Sudan's government will have a huge stake in the success of motor sport there as a way of signalling it is open for business." This applies to any of the grants as it's no surprise that a government would want to use racing to promote its nation. After all, that's the very reason they pay so much to host F1. It's not even hard to find an example of an oppressive regime doing this.

A recent report on ITV's News at Ten revealed that every year since 2015 the FIA gave grants to the Syrian Automobile Club (SAC) to arrange local races. As the FIA website states, the money was used for a range of purposes including "to buy new driver equipment for use in rallying".

The FIA paid the money despite it being public knowledge that the SAC arranges races which are sponsored by president Assad's Ministry of Tourism and are used as propaganda by his Tourism Minister Bishr Yazigi who is subject to European Union sanctions.

The United Nations (UN) says that the fighting in Syria has led to 13.5m Syrians requiring humanitarian assistance and left more than 300,000 people dead. An estimated 13,000 of them have been killed by Assad's regime in a jail at Seidnaya near to Syria's capital Damascus according to Amnesty International. Remarkably just moments away the SAC has been hosting rallies and the flags for the FIA and Syria fly there alongside each other. Yazigi swans around them and gushes about how they bring a warm glow to Syria.

In clear propaganda posted on Facebook Yazigi claimed last year that the SAC's rally event at Seidnaya represented "the coming back of life to this area." In another post he added that the rally "reflects the great will of Syrian youth for the continuity of life and for resurrection and new birth." Later in the year he eulogised that the events are "evidence to the continuity of life in Syria, and the will of life of Syrian People & their confidence in a better future for Syria and to overcome the crisis and war."

All this from the man who is subject to EU sanctions because he "shares responsibility for the regime's violent repression against the civilian population."

Yazigi's comments show that he clearly enjoys the benefits of the rallying as he uses it to fuel the propaganda that he promulgates as Syria's Tourism Minister. It drove Labour MP Alison McGovern to call for an investigation into the FIA's grants by Damian Collins, chairman of the UK government's powerful Culture, Media and Sport Select Committee. Crowther also wrote to Collins requesting a "fuller" investigation and said that "a government inquiry should determine whether F1 funds benefited Sudan's despicable regime as a matter of urgency." It didn't fall on deaf ears.

Collins told the Telegraph that he has committed to raising this matter with the Treasury as it monitors and pursues potential breaches of foreign sanctions through the Office for Financial Sanctions Implementation (OFSI). To be clear, this does not mean that any sanctions have been breached, it means that Collins has referred the matter to the OFSI to see if there has been a breach. As the FIA has repeatedly said that the grants were funded with money from a contract it signed with a UK-registered company the OFSI has reason to look into it. It isn't the only external agency that has cast its eye over the grants.

In 2015 the FIA asked the consultancy firm Deloitte to carry out a compliance analysis of its activities and one of its recommendations was "strengthening of the monitoring of the use of grants awarded by the FIA."

Acknowledging this, an FIA spokesperson said: "All grants are subject to rigorous internal scrutiny and the FIA will continue to lead the way in ensuring compliance as it strives to put in place best practices. This includes implementing recommendations made by Deloitte following its compliance analysis that was carried out in 2016, at the request of the FIA, to assist it in reaching its compliance goals. This also included the appointment of a new compliance officer to lead oversight and who has recently joined the FIA."

A spokesperson for F1 added "it is not within our remit to influence or determine how the FIA promotes, develops and regulates motor sport, nor how its funds are applied. We are satisfied that we are in full compliance with applicable sanctions."

Now it's over to the OFSI to see what it thinks.

Check out our Thursday gallery from Sepang, here.

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