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VW faces US$50 billion penalty

WASHINGTON, DC: January 04, 2016. The U.S. Department of Justice (DoJ) has filed a civil lawsuit on behalf of the Environmental Protection Agency (EPA) against Volkswagen AG and its American subsidiary (VWoA), claiming the company has hidden emission levels up to 40 times the legal limit on nearly 600,000 vehicles sold in America since 2009.

The suit also alleges Volkswagen violated the U.S. Clean Air Act by selling cars designed differently from what it had claimed in applications to the EPA and the California Air Resources Board.

The DoJ says VW is liable for penalties ranging from US$3,750 to US$37,500 per vehicle or per day for four separate violations between January 2009 and last year: selling such cars; installing an emissions’ “defeat” device; tampering with each vehicle; and failing to disclose what it was doing.

2012 volkswagen chattanooga 3162The resultant penalty could be US$50 billion or more covering VW, Porsche and Audi model years between 2009 and 2016.

The DoJ/EPA complaint originated in a 2014 study by West Virginia University’s Center for Alternative Fuels, Engines & Emissions that found emissions from a VW 2.0L 2012 Jetta and a 2013 Passat were significantly higher than EPA regulations.

A year later the DoJ says VW entities, including VWoA and Volkswagen AG, admitted these vehicles contained a defeat device in the form of a software algorithm or algorithms that detected when the vehicle was undergoing emission testing. However attempts to find out more “were impeded and obstructed by material omissions and misleading information provided by VW entities,” it adds.

Despite an October 2015 admission by VWoA CEO Michael Horn before a U.S. House of Representatives Subcommittee that the installation of the defeat device was a “knowing and willful decision to deceive”, it wasn’t until November 23 that the company finally acknowledged its behavior, according to the DoJ filing.

Commenting on the lawsuit, assistant administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance said: “We take an important step to protect public health by seeking to hold Volkswagen accountable for any unlawful air pollution. So far, recall discussions with the company have not produced an acceptable way forward. These discussions will continue in parallel with the federal court action.”

A websiteset up by VWoA: https://www.vwdieselinfo.com/ states: "The recent TDI news is a disappointment to the entire Volkswagen of America family. We sincerely apologize, and we recognize this matter has jeopardized the strong relationship between our loyal owners and the brand.We know apologies alone are not enough. Everyone at Volkswagen is committed to regaining your trust."

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