Volkswagen Groups Latest Legal Troubles

The Volkswagen group seems to be finding itself in increasing legal difficulties this month, facing action in both Canada and the United States for claiming that the vehicles they produce are more environmentally friendly than they actually are, to put it mildly.

The company has recently pled guilty to three felonies within the United States District Court under a plea agreement. This is the first time that the Volkswagen group has pleaded guilty to criminal conduct in any court worldwide. The charges laid against them consist of conspiracy, obstruction of justice, and the introduction of imported merchandise into the United States by means of false statement. The guilty plea was accepted by Judge Sean Cox as settlement to the claims made by the American Environmental Protection Agency Act as well as the United States Customs and Border Protection, who asserted that the Volkswagen Group imported approximately 590 000 vehicles with turbodiesel engines that violated environmental protection and clean air regulations. Judge Cox, however, did state at the end of the hearing that, given the nature of the accusations, he required more time to assess the $4.3 billion U.S.  in fines. The sentencing hearing is scheduled for the 21st of April at 9:30am. The automaker must also pledge to give their full cooperation to further investigations into their company as well as completely adhere to environmental standards set by the federal government.  

This current legal trouble is the cherry on top for the Volkswagen Group, who has also faced similar charges and investigations in Canada. Barely three months prior, Volkswagen had reached a consent agreement between themselves and the Competition Bureau of Canada to pay $15 million Canadian for “false or misleading environmental marketing claims used to promote some vehicles with 2.0-litre engines”.  However, the Competition Bureau is still investigating marketing claims associated with 3.0-litre engines. Furthermore, there are two outstanding class-action suits against Volkswagen that will appear before Canadian Courts later this month.

As if that wasn’t enough, Environment and Climate Change Canada is conducting an investigation of their own into the diesel engines produced by Volkswagen. They have stated that if their findings contain sufficient evidence of having breached the regulations set to control vehicle emissions, “enforcement action will be taken in accordance with the Compliance and Enforcement Policy of the Canadian Environmental Protection Act”, adding to the cost already accumulated by the lawsuits in the United States.

The amount the automaker will still have to pay in total for these charges is still yet to be determined. If Volkswagen had not pled guilty to the charges in the United States, they would have been looking at potential fines that ranged anywhere from $17 billion U.S. to $34 billion, on top of charges faced in Canadian Courts.

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