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VW-owned auto parts company IAV to pay $35M fine over emissions scandal

Volkswagen AG-owned auto parts maker IAV GmbH Ingenieurgesellschaft Auto und Verkehr will plead guilty to conspiring with its parent to cheat on vehicle emissions tests and pay a $35 million fine, the U.S. Justice Department said Dec. 18.

The Justice Department found that the pair collaborated to design, test and implement cheating software that altered the results of U.S. vehicle emissions tests.

IAV will serve probation for two years, operate under an independent corporate compliance monitor for two years and fully cooperate with the Justice Department's ongoing investigation of the "dieselgate" scandal. The company will also pay a $35 million fine, the highest amount it can pay without jeopardizing its operations.

"We take these matters very seriously," IAV President Kai-Stefan Linnenkohl said in a statement, adding: "The misconduct identified does not reflect who we are as a company today."

The U.S. District Court in Detroit will hear IAV plead guilty in a Jan. 18, 2019, hearing.

In March 2017, VW pleaded guilty and paid a $2.8 billion fine for deceiving U.S. regulatory agencies, including the EPA and the California Air Resources Board, by installing software in diesel vehicle emissions control systems that were designed to cheat emissions tests. The company agreed to be monitored for three years.

On Nov. 5, German consumer group Verbraucherzentrale Bundesverband filed a class-action lawsuit against VW seeking compensation for about 2 million owners of diesel cars that it found to be harmful to the environment.

VW holds a 50% stake in IAV. Other shareholders include Continental Aktiengesellschaft, Schaeffler Technologies AG & Co. KG., SABIC Innovative Plastics Holding BV and Freudenbeg SE.