Volkswagen agrees to $4.3 bn fine, harsher regulation to settle US charges
12 Jan 2017
In a $4.3 billion settlement with US regulators, Volkswagen AG, yesterday agreed to sweeping reforms, new audits and oversight by an independent monitor for the resolution of diesel emissions cheating investigations.
Volkswagen faced charges of installation of secret software in US vehicles to allow them to emit up to 40 times legally allowable pollution. With the settlement, the German automaker agreed to change the way it operated in the US and other countries.
VW would separate the jobs of product development and certification and testing and monitoring into different organisations.
The independent monitor would get access to Volkswagen documents and assess the efforts of VW's board of management and senior management to comply with environmental laws.
The monitor would file at least two follow-up reports with the justice department and conduct onsite interviews in Germany, the US and potentially elsewhere with VW employees.
According to US regulators, the reforms, which come following president-elect Donald Trump's criticism of the Environmental Protection Agency (EPA) for over-regulating US industries, were an example of why vigorous environmental enforcement was needed.
"There are some structural changes that we are requiring so there is less ability for these types of things to happen," EPA Administrator Gina McCarthy told reporters yesterday.
Under the final agreement VW would plead guilty regarding certain US provisions and a "Statement of Facts" on the basis of which the fines had been made, according to Volkswagen.
The German automaker was hit with major fines after it was caught last year cheating on US air pollution tests by the EPA. The scandal had damaged the reputation of the company and dented its sales.
Volkswagen had maintained all along that no current or former board members were involved in the cheating. Volkswagen said it did not release information sooner as it expected to reach a negotiated settlement with US regulators.
