Automotive Emissions Crisis - Regulatory

In Canada manufacturers which are implicated in the manipulation of test results face sanctions and/or penal charges from consumer protection boards, the Competition Bureau, and Environment Canada to name a few. The Canadian regulators have fewer resources than their US counterparts and, in situations affecting both the Canadian and US markets, tend to favour a "wait and see what happens in the US" approach.

In France an investigation has been commenced by the Paris prosecutor on charges of aggravated deceit on goods susceptible to be harmful to health. This is a serious criminal offence with possible imprisonment and fines indexed by reference to turnover. Two services are in charge of the criminal investigation: OCLAESP (environment and health protection) and OCLCIFF (anti-corruption squad). In parallel, an administrative investigation was launched by the Anti-consumer Fraud Administration (DGCCRF). Results of these parallel investigations are expected by end of November/December.

In Hong Kong, under the Air Pollution Control (Vehicle Design Standards) (Emission) Regulations, all newly registered motor vehicles must comply with a set of emission standards which are in line with the most stringent ones adopted by the United States, the European Union and Japan. A vehicle cannot obtain its registration from the Transport Department if it fails to comply with the said emission standards. The Environmental Protection Department is responsible for handling pollution complaints and incidents. Any person or company who commits an offence under the Air Pollution Control Ordinance may face criminal liability. In addition, the company's director or other person concerned in the management can become personally liable to prosecution for the offence committed by that company if the offence is committed with his consent or connivance, or neglect or omission.

Manufacturers may also face penalties under the Trade Descriptions Ordinance, by which it is a criminal offence to supply goods with a false trade description, false or misleading information in the course of trade or business. The maximum penalty upon conviction is a fine of HK$500,000 and imprisonment for five years.

In India the automobile sector has witnessed a recent spate of recalls with the likes of Audi, Honda, Suzuki, Toyota and General Motors. The Indian government has initiated a probe into the possibility of violations by Volkwagen in India and has deputed its testing agency Automotive...