Italy Faces EU Legal Action Over Fiat Chrysler Diesel Emissions

By Laurence Norman Features Dow Jones Newswires

The European Commission took a first legal step against the Italian government on Wednesday, demanding a response to concerns that Rome has failed to effectively police diesel emissions of Fiat Chrysler Automobiles NV vehicles.

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The commission said it had formally demanded more information from the Italian authorities on how they enforced rules demanding that manufacturers justify the use of so-called auxiliary engine control devices, which can be used to circumvent emission standards.

The commission also asked Italy to clarify why it had not imposed corrective measures on Fiat or slapped penalties on the manufacturer.

Italy has two months to respond to the commission's request, which triggers a legal process that could end with Italy being taken to European Union courts and fined. The move comes after months of talks intended to clarify the steps Italian authorities had taken.

Wednesday's move is the latest development in a European emissions scandal which erupted after Volkswagen AG admitted in 2015 using defeat devices to understate the level of carbon-dioxide emissions it declared to U.S. regulators. That has resulted in multibillion-dollar U.S. fines on the German company.

Under EU rules, manufacturers can choose in which EU country to certify their vehicles. Most manufacturers choose their home country and the commission and environmental experts have long alleged that national regulators may be too lenient.

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In September, Germany urged the commission to investigate Fiat Chrysler after its motor-vehicle authority found evidence suggesting the Italian-based firm used software to manipulate emissions. Italy rejected the allegations.

Italian Transport Minister Graziano Delrio said in a statement on Wednesday he had asked the commission to postpone any steps to begin legal action. He said Italian authorities have from the start ruled out the presence of illegal devices on Fiat models and had provided all the information the commission had requested.

There was no immediate comment from Fiat.

Defeat devices have long been banned under EU law, though there are exemptions if manufacturers can demonstrate they are needed to protect the engine against damage or accident or to ensure safe operation of the vehicle.

As the emissions scandal has widened, EU authorities have sought to improve policing of the industry and prevent national authorities soft-pedaling their oversight of manufacturers.

The commission is pushing legislation which would allow more independent vehicle testing and increase the checks on cars in circulation. It would also boost the EU's supervisory powers over national authorities, test centers and car makers.

Last December, the EU started legal cases against seven EU member states, including Germany, whose authorities approved Volkswagen vehicles but didn't apply national rules allowing penalties to be imposed.

--William Boston in Berlin contributed to this article

Write to Laurence Norman at laurence.norman@wsj.com

(END) Dow Jones Newswires

May 17, 2017 10:24 ET (14:24 GMT)