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German carmaker Audi fined 800 million
euros over ‘dieselgate’ cheating scandal

BERLIN Germany (Xinhua) -- German carmaker Audi was handed an 800-million-euro (927.8 million U.S. dollars) regulatory fine by the Munich State Prosecution Office in the course of "dieselgate" investigations, Volkswagen AG, the mother corporation of the luxury carmaker, announced on Tuesday.

"Audi AG has accepted the fine and hence accepts its responsibility", a statement by Volkswagen read.

The official reasoning for the fine was provided with Audi’s "divergence from regulatory requirements" in its production of certain diesel motors.
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The exact sum was arrived at from the combination of a punitive penalty of five million euros, the highest which can be awarded under German law in such cases, and an estimated 795 million euros in additional earnings which the Ingolstadt-based company had derived from the illicit behavior in question.

Volkswagen predicted that the development would have an immediate effect on its own financial performance and that of its subsidiary in 2018.

"Taking special one-off effects from the fine order into account, the Audi corporation will underperform key financial targets from its forecast for the 2018 fiscal year significantly", Volkswagen wrote.

Porsche SE, the holding company of the Porsche-Piech family which owns the majority of publicly-listed Volkswagen Group shares, also expects net profits for this year to fall by around 900 euros to between 2,5 and 3.5 billion euros as a consequence.

 

Dieselgate scandal | Coastweek

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Volkswagen Group, the world’s largest carmaker by sales, admitted to manipulating exhaust system testing results in more than 10 million vehicles as early as September 2015 and has since had to pay more than four billion euros in legal settlements with customers there.

In Germany, the Brunswick State Prosecution has already ordered the mother corporation to pay one billion euros in fine to plaintiffs during the summer in a similar case to the one now concluded at Audi.

Nevertheless, Justice Minister Katarina Barley has called for an overhaul of German law which would allow judicial authorities to punish corporations for criminal wrongdoing more effectively rather than just being able to prosecute individual members of staff.

Referring to the "dieselgate" scandal specifically, Barley argued that the government should create possibilities to take a more aggressive stance against businesses where fraud or corruption were "systemic" issues. (1 euro = 1.16 U.S. dollars).
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EARLIER REPORTS:

Opel premises raided by German ‘dieselgate’ investigators

BERLIN Germany (Xinhua) -- German police raided premises of the Ruesselsheim-based carmaker Opel in the course of ongoing "dieselgate" investigations on Monday.

A spokesperson for the Hesse state criminal police office confirmed that "police measures" were underway at Opel as of Monday morning without providing further details about the operation.

The subsidiary of the French PSA Group was first named as potentially being implicated in fraudulent diesel emissions cheating practices during a transport ministry hearing back in July but, unlike domestic rivals Volkswagen and Daimler, has otherwise previously evaded formal judicial scrutiny in the affair.

In a statement in reaction to the searches, Opel said that probes had been conducted at its corporate locations in Russelsheim and Kaiserslautern "in the framework of an investigatory procedure concerned with the subject of emissions."

Nevertheless, the automotive company insisted that all its vehicles complied with relevant regulations.

According to the German newspaper BILD, around 95,000 vehicles in total of the Opel Insignia, Zafira and Cascada models built during the years 2012, 2014 and 2017 are affected by the latest development in the German "dieselgate" scandal.

In the ministry of transport hearing in July, Opel was asked to provide information about the function of exhaust system defeat devices in three of its models.

A spokesperson for the ministry said at the time that it was too early to reach conclusions about the "legitimacy" of the technology in question.

The federal government in Germany has recently unveiled a "dieselgate" policy package aimed at preventing looming driving bans with alternative measures including fleet renewal incentives and so-called "hardware upgrades" of affected vehicles to reduce their NOx emissions levels.

Opel is among the majority of carmakers who continue to resist calls for technical retrofitting measures on the grounds that they are economically and technologically unfeasible.
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German minister calls for corporate-sanction law

BERLIN Germany (Xinhua) -- German Justice Minister Katarina Barley called on Friday for an overhaul of the law which would allow authorities to punish corporations for criminal wrongdoing rather than just being able to prosecute individual members of staff.

Speaking to German newspaper Handelsblatt, Barley explained that criminal offenses would still be attributed to individuals under the new model.

However, it would also become possible to impose sanctions against companies if they were found to be structured in ways which aid and abet criminal behavior.

"In cases where fraud or corruption is systemic, there should be possibilities in the future to charge the company itself," Barley said.

The German ruling parties had pledged to establish provisions for new corporate fines of up to 10 percent of annual gross revenue for companies with more than 100 million euros (115.7 million U.S. dollars) in revenue.

The ministry of justice wants to present concrete proposals to enact such legislation within the next months and is treating the policy as a "matter of priority" for Chancellor Angela Merkel’s government.

"A right to sanction companies only makes sense if the measures hurt. It must have a deterring character," Barley said.

Barely referred specifically to the ongoing "dieselgate" scandal as an example.

"Whoever behaves incorrectly must be liable and hence also pay," she said.

The Braunschweig State Prosecution Office currently lists 49 suspects in its investigations into diesel emissions-cheating practices by German car makers.

The German Environmental Action (DUH) lobby group and politicians have recently called for emissions-cheating car manufacturers to be fined after a court ruled that a partial diesel driving ban was needed in Berlin from 2019 onwards to improve air quality in the German capital.

According to Handelsblatt, DUH president Juergen Resch welcomed Barley’s reform proposals on Friday.

"We finally need a criminal law for corporations like most Western countries already have," Resch said.

By contrast, the German Federation of Industries (BDI) told the newspaper it did "not support the creation of a corporate criminal law".

The industrial lobby group warned that sanctions would have an adverse effect on companies as well customers, suppliers and employees.
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German environmental lobby group backs SPD calls for fining carmakers

BERLIN Germany (Xinhua) -- Carmakers should be fined by authorities in Germany for their domestic emissions-cheating practices in the "dieselgate" scandal, Axel Friedrich of the Environmental Action Germany (DUH) told Xinhua on Wednesday.

"The automotive industry has made massive profits while poisoning people by selling cars which were labelled incorrectly."

This behavior, Friedrich argues, "must be punished with financial sanctions.

"I cannot understand the position of the transport minister to handle the automotive industry with kid gloves."

The comments by the director of the Emissions Control Institute of DUH were made in response to calls by the German Social Democrats (SPD) on Wednesday for emissions-cheating carmakers to be fined after a court ruled that a partial diesel driving ban was needed in Berlin from 2019 onwards to improve air quality in the German capital.

"Whoever cheats should also pay for it. Maybe this way the automotive managers will finally see reason," SPD parliamentary faction vice-president Soeren Bartol told the German press agency.

Bartol argued that transport minister Andreas Scheuer (CSU) should fine carmakers 5,000 euros (5,762 U.S. dollars) per manipulated vehicle in the diesel emissions scandal unless automotive executives agree to carry out technical retrofitting measures (so called "hardware upgrades") at their own expense.

Similarly, finance minister Olaf Scholz (SPD) said that the ball was now in the court of carmakers who would either have to finance hardware upgrades fully or offer attractive incentives for fleet renewal.

The SPD forms part of Germany’s ruling "grand coalition" with the Christian Democratic Union (CDU) and Christian Social Union (CSU) in Berlin and has repeatedly described such technical retrofitting as being imperative to avoid outright driving bans.

The Berlin Administrative Court ruled on Tuesday that bans on older diesel vehicles were required in at least 11 heavily-congested areas of the capital by 2019 to ensure its compliance with European Union (EU) clean air legislation.

Berlin is now set to follow in the footsteps of Hamburg, Stuttgart and Frankfurt where driving bans were already ordered by courts earlier on the basis of a landmark ruling by the Federal Administrative Court which first enabled German cities to take these drastic steps unilaterally to lower urban nitrogen oxide (NOx) emissions.

DUH would have preferred an area-wide ban, rather than entry restrictions for diesel vehicles on specific streets in Berlin, according to Friedrich.

Nevertheless, he welcomed the partial ban announced on Tuesday as a "signal that people cannot continue to be burdened with high air pollution."

German prosecutors are in the process of investigating dozens of automotive executives and employees for their suspected role in installing illicit defeat devices to understate NOx emissions from diesel cars of the Euro4 and Euro5 motor generations.

According to the recent testing conducted independently by the DUH, however, even the newest Euro6 diesel motor types still release 5.5 times more NOx emissions on average than permitted under EU law.

DUH president Juergen Resch told dpa on Wednesday that the spread of driving bans from Hamburg to Berlin had raised the pressure on the "grand coalition" to develop a nation-wide "Blue Placard" marking scheme to identify diesel vehicles to enter the affected cities.

The federal government has so far resisted calls for such a universal regulation and has instead proposed fleet renewal incentives and voluntary hardware upgrades by carmakers as a means to avert the imposition of driving bans.
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German cities urge government to implement new diesel measures swiftly

BERLIN Germany (Xinhua) -- German municipal authorities urged the country’s federal government on Thursday to act fast in implementing a new "dieselgate" policy package which was recently unveiled.

"The implementation must now occur swiftly and unbureaucratically", Gerd Landsberg, executive director of the German Association of Towns and Municipalities, told Redaktionsnetzwerk Deutschland (RND) on Thursday.

The measures were agreed by the ruling "grand coalition" following lengthy cabinet consultations and aim at reducing nitrogen oxide emissions (NOx) in urban centers without necessitating outright diesel driving bans.

Landsberg emphasized that the success of the measures would hereby also hinge on the willingness of German carmakers to "assume their responsibility, including financially" with regards to technical retrofitting of affected vehicles.

The first-ever inclusion of technical retrofitting, or so-called "hardware upgrades", in which the government has dubbed the "concept for clean air and the protection of individual mobility in our cities", marks a major shift of tone in Berlin’s response to the ongoing "dieselgate" crisis.

Hardware upgrades have been described as essential to achieve a significant reduction in NOx emissions without requiring driving bans by German minister for the environment Svenja Schulze and several national environmental groups.

However, these upgrades had been previously resisted by transport minister Andreas Scheuer as well as the affected carmakers.

Volkswagen and Daimler have now surrendered their opposition to hardware upgrades on the premise that a certified procedure is created for car garages to facilitate the process.

BMW, Opel as well as several international car manufacturers are still refusing to back the German government on the issue.

Additionally, Volkswagen has made its support for the most contentious part of the policy package conditional on the ability of Chancellor Angela Merkel to ensure the participation of all carmakers in the retrofitting programs.

Helmut Dedy, secretry general of the German Association of Cities, sharply criticized the lasting hesitancy of the automotive industry to cooperate with policymakers in lowering NOx pollution on Thursday.

"It is incomprehensible that a producer announces a few hours after the compromise that they will not participate in retrofitting", Dedy told the newspaper Rhein-Neckar-Zeitung.

Although he was generally confident that "grand coalition" concept would improve air quality, Dedy noted that it was unclear how quickly the new measures would produce concrete results and whether they would suffice to avert looming driving bans.

Germany’s Federal Environmental Agency (UBA) has estimated that diesel cars are responsible for more than 50 percent of NOx emissions in the country.

NOx levels currently exceed binding limits set in EU clean air legislation in several major German cities, prompting the European Commission to file an ongoing lawsuit against the federal government in Berlin at the European Court of Justice.
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German government reaches agreement on ‘dieselgate’ policy response

BERLIN Germany (Xinhua) -- The ruling grand coalition in Germany achieved a breakthrough in protracted negotiations over how to avert looming diesel driving bans in cities, the leaders of the Christian Democratic Union (CDU), Christian Social Union (CSU) and German Social Democrats (SPD) announced on Tuesday.

Following the conclusion of a special cabinet session which began on Monday afternoon and dragged on into the early morning hours, the federal government said it would unveil a package of measures geared towards lowering harmful nitrogen oxide (NOx) emissions.

The high-level talks were recently scheduled by Chancellor Angela Merkel to resolve a long-standing dispute among her ministers over how to improve urban air quality in Germany without having to impose outright bans on diesel vehicles.

According to SPD leader Andrea Nahles, the policy package now agreed upon includes a provision for contentious technical retrofitting measures, or so-called "hardware upgrades", for cars affected by the diesel emissions scandal.

Hardware upgrades have repeatedly been described as essential to achieve a significant reduction in NOx emissions by environment minister Svenja Schulze and several non-governmental environmental groups, but were previously resisted by transport minister Andreas Scheuer and car makers on the grounds of cost and liability issues.

The German Environment Agency (UBA) has estimated that diesel cars are responsible for more than 50 percent of NOx emissions in Germany.

NOx levels currently exceed binding limits set in European Union (EU) clean air legislation in several major German cities, prompting the European Commission to file an lawsuit against the federal government in Berlin at the European Court of Justice (CJEU).

Earlier, Scheuer said his top priority was consequently to ensure that customers were offered financial incentives to purchase new, cleaner vehicles.

Scheuer’s focus on "fleet renewal" was criticized by the SPD, however, on the grounds that they would only benefit Germans who could afford to purchase a new car.

Although car makers already offered premiums of up to 10,000 euros (11,543 U.S. dollars) per new purchase to customers in 2017, the positive effect on air quality is seen as insufficient by the government to prevent driving bans.

Recent emissions testing conducted independently by Environmental Action Germany (DUH) has found that even the newest Euro6 diesel motor types release 5.5 times more NOx emissions on average than permitted under EU law.

Citing a document listing the resolutions of the cabinet session, the German press agency (dpa) reported that further fleet renewal premiums, as well new retro-fitting options would be offered to motorists in areas most affected by NOx pollution.

These include cities such as Frankfurt and Stuttgart where courts have recently ordered the imposition of diesel driving bans.

In the event that driving bans can still not be averted, and as a last resort to ensure compliance with EU clean air legislation, the government wants to create uniform regulations on the access of diesel vehicles to affected cities.

Dpa also quoted insider information that taxpayers were likely to have to shoulder at least a small share of the envisioned technical retrofitting measures.

Questioned whether the powerful automotive industry would support what the government has dubbed the "concept for clean air and the protection of individual mobility in our cities", Nahles said on Tuesday that it remained to be seen.

Nevertheless, the "dieselgate" breakthrough was cautiously welcomed by consumer protection groups.

"If (the package) includes free retrofitting for car owners with guarantees and generous discounts, that would be a step forward," Klaus Mueller, the president of the Federation of German Consumer Organizations (vzbv), told press.

The transport minister and his cabinet colleague Schulze are both scheduled to present details of the legislative concept to the public on Tuesday afternoon.
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SEE ALSO:

Dieselgate: German consumer group and automobile
club announce joint lawsuit against Volkswagen

Dieselgate: Compliance auditor now demands further
governance reforms from Volkswagen

German automaker VW to stand in new type of ‘dieselgate’ trial

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FURTHER READING:

German carmaker Audi pays hefty fine over emissions cheating

             

 

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