Volkswagen is set to plead guilty to criminal charges and pay a $4.3 billion draft settlement to resolve the emissions-rigging scandal that broke out in September 2015.
According to a BBC
report, VW was in advanced discussions with the Department of Justice and US customs about the deal, which requires the approval of VW management and its supervisory board.
The “concrete draft” of the settlement VW put forward to the US authorities provided for the appointment of an independent monitor for the next three years and $4.3 billion in criminal and civil fines, which will exceed the $19.2 billion VW set aside to handle the problem, the report said.
VW has already agreed to pay a $15 billion civil settlement that would cover buybacks and repairs of the 487,000 affected diesel cars in the US and for funding the environmental cleanup and promotion of zero-emission vehicles.
The US Environmental Protection Agency (EPA) discovered last year that many VW cars had a “defeat device” in diesel engines that cut back on emissions when tested. The automaker consequently admitted to willfully deceiving emission regulators not only in the US but in many other countries.
Arndt Ellinghorst, head of global automotive research at Evercore ISI, said the draft settlement was good news for VW and would “draw a line under all remaining US-related legal risk,” BBC
He said it was important that VW had “managed to come to an agreement that allows the company to move on,” without dragging the issue into the new US administration.
The company is expected to spend as much as €21 billion in diesel-related costs, Ellinghorst said.
Court papers showed that VW executives had knowledge of the emissions cheating two months before the scandal broke but had kept mum about it to US regulators.
Oliver Schmidt, who was head of VW’s US environmental regulatory compliance office from 2012 to 2015, was among the VW bosses named in the scandal. Schmidt was charged with conspiracy to defraud on Monday, and has been remanded ahead of a court appearance on Thursday.
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