Volkswagen is close to pleading guilty, held in a diesel emissions scandal and has to pay 4.3 billion US dollars as penalty to the US Justice Department. This deal would resolve a federal criminal probe into its deceiving on emission tests of vehicles.

Late Tuesday, the German automaker announced that its negotiations with the authorities had advanced and the draft settlement involved $4.3 billion as fine in addition to a VW admission of guilt. The agreed penalty implies that the total costs related to the emissions-related scandal are likely to cross the 19.2 billion US dollars set aside by the company to tackle the problem. Earlier, VW had agreed to a fifteen billion dollar civil settlement with the US environmental authorities and car owners.

The vehicle checks in the US on the levels of pollution prompted the automaker in Sept. 2015 to acknowledge that it had integrated undisclosed software in many diesel vehicles to deceive the exhaust emission tests.


The supervisory board is scheduled to meet today to approve the draft criminal and civil settlement, according to sources in Washington and from the headquarters of VW. Due to this settlement, the company could be needed to cooperate with the probes into individual company staff, fuelling the pace of the cases.

The guilty plea by VW could probably weaken the ability of the company to defend itself against probes by state attorneys, and against proceedings introduced by shareholders who accuse the company of waiting very long to reveal the financial risks of its emissions scandal.

This is a milestone in global scandals. The current VW settlement with the Justice Department would forestall the inauguration of Donald Trump (the president-elect of the US) on Jan. 20 and could add up to a milestone in getting over its biggest corporate scandal.

As for the total number of vehicles integrated with the manipulated software, there could be around eleven million units around the world. The installed program decreases emissions under testing, though turns off under the actual driving conditions.

The settlement details, which need the approval of the management of the company and its supervisory boards, were given by the automaker in a financial disclosure yesterday. In this disclosure, VW said that the money set aside by them for the scandal costs would not be sufficient to cover up according to the latest settlement.

On Monday, there were rumors that the executives of the company knew that the cars were integrated with the software to give out exemplary pollution readings two months before this scandal broke out, though they opted not to reveal it to the US regulators. The US started probing into the company only after a research by the West Virginia University revealed that VW’s diesel cars caused more pollution on the streets than during the official emission tests.