Claimed to be one of the largest financial penalties imposed by German authorities against a company, the fine consists of the maximum €5 million penalty permissible for a regulatory offence, plus €995 million for the economic benefits gained as a result of the cheating.
The Braunschweig public prosecutor concluded that monitoring duties had been breached by Volkswagen AG’s Powertrain Development department when testing the diesel emissions of particular vehicles.
About 10.7 million vehicles sold globally between 2007 and 2015 featured “an impermissible software function”, including those with the EA288 Gen3 engine offered in the United States and Canada and the EA189 unit found elsewhere.
In a statement released this week, Volkswagen AG acknowledged its role in dieselgate, hoping that the end of German regulatory legal action will have an impact on other proceedings currently taking place in Europe.
“Following thorough examination, Volkswagen AG accepted the fine, and it will not lodge an appeal against it,” it said.
“Volkswagen AG, by doing so, admits its responsibility for the diesel crisis and considers this as a further major step towards the latter being overcome.
“As a result of the administrative order imposing the fine, the active regulatory offence proceedings conducted against Volkswagen will be finally terminated.
“Volkswagen assumes that such termination of the proceedings will also have significant positive effects on further active administrative proceedings in Europe against Volkswagen AG and its subsidiaries.
“We work with vigour on dealing with our past,” Volkswagen AG chief executive officer Herbert Diess added. “Further steps are necessary to gradually restore trust again in the company and the auto industry.”
According to Reuters, Volkswagen AG’s latest fine falls outside of the €25.8 billion ($A40.23 billion) provision it has set aside for the financial ramifications of dieselgate, meaning the penalty will impact its earnings.
Nevertheless, Volkswagen AG copped a larger $US4.3 billion ($A5.68 billion) fine in January last year when the US department of justice levelled it with criminal and civil penalties.
Audi AG chief executive officer Rupert Stadler was also implicated in dieselgate earlier this week, after being accused of fraud and indirectly falsifying certifications by German authorities, which led to a raid of his home.
One day later, the German transport ministry ordered Mercedes-Benz parent company Daimler to recall 774,000 vehicles across Europe due to the fitment of “unauthorised defeat devices”, with the European Union backing the move.
A separate legal investigation into dieselgate is still taking place in Stuttgart, Germany, with several high-profile Volkswagen AG executives involved, including current and former employees.
By Justin Hilliard