Daimler faces massive fine in diesel probe

Mercedes-Benz parent company Daimler could be set for a massive fine in Germany over diesel trickery, as prosecutors confirmed Wednesday they had opened a probe similar to one that cost Volkswagen one billion euros

Daimler faces massive fine in diesel probe
The Mercedes-Benz star. Photo: DPA

“We opened a fine procedure yesterday” against the high-end car giant, a spokesman for prosecutors in car industry bastion Stuttgart told AFP.

Like VW, Daimler is suspected of building “defeat device” functions into its motor control software that allowed cars to reduce harmful emissions when undergoing regulatory tests.

Prosecutors have already fined Volkswagen one billion euros and VW 
subsidiary Audi 800 million in such cases.

SEE ALSO: Despite setbacks, Volkswagen boasts sales record in 2018

Officials said managers failed in their duty to supervise the firms' activities.

In a statement, Daimler confirmed the probe and said it would “continue to  cooperate fully” with prosecutors.

Beyond the Mercedes-Benz maker, VW sports car subsidiary Porsche and 
components supplier Bosch both face open fine proceedings.

SEE ALSO: Porsche faces fresh fine over 2015 diesel cheating scandal

And on top of the probe into the company itself over so-called “administrative offences”, four Daimler managers are the target of a criminal investigation for fraud and false advertising linked to the practice.

Transport authority KBA has ordered the Stuttgart-based group to recall 700,000 vehicles worldwide, including 280,000 in Germany, over illegal software — a ruling Daimler is appealing.

Diesel investigations have been running since 2015, when Volkswagen admitted to building defeat devices into 11 million cars worldwide.

Several senior executives at VW remain under investigation, while tens of 
thousands of car owners are pursuing it in court.

SEE ALSO: How diesel bans have ignited a debate about dodgy tricks and dirty money

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Germany can jail officials who flout anti-pollution rulings, court says

Germany can jail officials for failing to enforce inner-city bans on polluting vehicles, but only under specific legislation that respects proportionality, the European Court of Justice ruled Thursday.

Germany can jail officials who flout anti-pollution rulings, court says
Photo: DPA

It would be up to the German justice system to determine whether such politicians should face jail time, the court said, after being asked to rule on a long-standing dispute between environmental activists and the state government of Bavaria.

In a legal tug-of-war stretching back to 2012, environmental group Deutsche Umwelthilfe (DUH) is attempting to force the Bavarian government to implement measures against air pollution in the state capital Munich.

Both activists and the judiciary have claimed the Bavarian government is flagrantly ignoring a 2014 Munich court decision demanding a plan of action to include a city ban for diesel-fuelled vehicles.

Thursday's ECJ opinion, though not legally binding, could have implications for leading politicians in the Bavarian sister party of Chancellor Angela Merkel's ruling Christian Democrats.

The ECJ said any jail sentence would require “a national legal basis which is sufficiently accessible, precise and foreseeable in its application”.

It added that such punishment must be “proportionate”.

READ ALSO: How German diesel bans have ignited a debate about dirty tricks and dodgy money

The court's advocate general had said in November that no such legal basis appeared to exist in Germany.

The Bavarian higher administrative court referred the case to the ECJ in November 2018, saying that “high-ranking political figures (had) made it clear, both publicly and to the court, that they would not fulfil their

Saying a €4,000 fine had proved “inefficient”, it asked the magistrates in Luxembourg to advise on the legality of threatening lawmakers with imprisonment.

In Thursday's ruling the ECJ recalled that the “referring court found that ordering the payment of financial penalties was not liable to result” in a change in conduct since the fine would be credited as income for Bavaria and thus “not result in any economic loss”.

It said incarceration should be a recourse “only where there are no less restrictive” measures such as stiffer, renewable fines whose payment “does not ultimately benefit the budget from which they are funded”.