VW Korea likely to face 9 mil. penalty for emissions rigging

VW Korea likely to face 9 mil. penalty for emissions rigging. July. 15, 2016 07:01. by 이은택, 임현석기자 기자nabi@donga.com,lhs@donga.com.

It has been reported that the Ministry of Environment of Korea is reviewing a punitive measure to slap Audi Volkswagen Korea with as much as 320 billion won (279.51 million U.S. dollars), which is facing an impending penalty from the Korean government for submitting falsified documents with intention to cheat on the government’s emissions and noise tests. It is drawing heated attention in the country as the total amount of penalty could increase depending on the date on which the measure is implemented.

According to the Ministry of Environment, Clause 48, a revised law on protection of the atmospheric environment, will be implemented starting on July 28. Under the revised law, the maximum amount of penalty for submitting false emissions documents will surge tenfold from 1 billion won to 10 billion won for each model. So far, 32 models have been found to be in violation of the emissions tests by the Ministry of Environment, and if the ministry chooses to implement the law on the Volkswagen models, the total sum of fines will jump from 32 billion won to 320 billion won.

The issue at hand is the interpretation as to when the violations occurred. The revised law does not apply retroactively, so as a rule, the law that was in place when the violations occurred should be applied in implementing the punitive measure. If the Ministry of Environment cites the date on which it notified Volkswagen Korea of the 32 models in violation, the revised law will not apply. However, if the ministry undergoes the hearing process on July 22 as scheduled and confirm‎s its decision after July 28, the revised law will take effect, enabling the ministry to impose as much as 320 million won in fines.

Volkswagen is drawing heavy criticism in Korea for its two-faced behaviors. In the U.S., the German automaker vowed to provide compensations worth 17 trillion won, but in Korea, the company has put its foot down, maintaining that it will not pay except the “10 billion-won community fund.” Should the Environment Ministry apply the law before the revision, the move could be publicly denounced as an intentional “slap on the wrist.”

“We are closely looking into the relevant laws, open to the two possible options,” said a ministry official. “A decision will be made at least within this month.”