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VW criminal probe

August 16, 2016

Embattled German carmaker Volkswagen has reportedly held preliminary talks with the US Justice Department aimed at resolving a criminal probe into its diesel emissions scandal.

VW Logo Emblem Emission Abgas USA Krise
Image: picture-alliance/dpa/A.Burgi

US business daily Wall Street Journal (WSJ) reported Monday that Volkswagen (VW) and US prosecutors were negotiating a settlement that could result in fines of more than $1.2 billion (1.06 billion euros) for the German carmaker's criminal wrongdoings in its emissions-cheating scandal.

Citing people familiar with the talks, WSJ said the two sides had met for "preliminary discussions" in the hope of reaching a settlement deal before the end of the year.

The newspaper also reported that officials from the US Justice Department and the Attorney General's office were still undecided as to whether to seek a guilty plea from Volkswagen, or pursue a so-called deferred prosecution agreement. Under such a "consent decree," an independent monitor would oversee the German automaker's conduct and might later dismiss charges so long as VW adheres to settlement terms.

A VW spokesman said the company was committed to earning back the trust of their customers, dealers, regulators and the American public. "As we have said previously, Volkswagen is cooperating with federal and state regulators in the United States, including the Department of Justice, and our discussions are continuing toward a resolution of remaining issues."

The fine to resolve the US criminal investigation could be the largest ever imposed on an automaker, surpassing the $1.2 billion paid by Toyota in 2014 to resolve a US investigation into its handling of sudden unintended acceleration incidents.

In September, General Motors paid $900 million and signed a deferred prosecution agreement to end an investigation into its handling of an ignition-switch defect linked to 124 deaths. Both automakers agreed to three years of oversight by an outside monitor.

Staggering figures

In September 2015, VW admitted it had installed defect devices in about 600,000 diesel-powered vehicles in the US to beat emissions tests. It later said that the cheating software had been installed in about 11 million diesel vehicles worldwide.

In a first settlement of the scandal in the US, the auto giant agreed in June to pay $15.3 billion to settle civil charges, including $10 billion to cover buybacks or fixes for 475,000 2.0 liter diesel cars and sport utility vehicles.

VW will also spend $2 billion over 10 years to fund programs directed by California and the US environment agency EPA to promote construction of infrastructure to charge electric vehicles, development of zero-emission ride-sharing fleets and other efforts to boost sales of cars that do not burn petroleum. However, the carmaker could face billions of dollars more in costs if it is forced to buy back 85,000 3.0 liter Audi, Porsche and VW cars and SUVs sold since 2009.

According to WSJ, Volkswagen was expected to receive credit from prosecutors for cooperating with their probe and agreeing to the civil accord. That credit could reduce any financial penalty, among other terms, in Volkswagen’s final Justice Department settlement, the people familiar with the matter said.

uhe/jd (Reuters, AFP, WSJ)