One of the more unexplored issues from the Volkswagen emissions-testing scandal is why no EU regulator or member country’s regulators discovered the massive fraud and deception engaged in by VW in its 10-year campaign around its defeat device. Instead it fell to investigators in the United States and this country’s Environmental Protection Agency to discover the company had broken the law. EU regulators were no doubt humiliated that their U.S. counterparts brought the matter first to the public’s attention and then brought the first regulatory actions. If the EU regulators were not humiliated, they well should have been.

Now this issue has moved a more central part of the ongoing narrative as a draft report from a European Parliament investigation has determined EU regulators engaged in “maladministration” for the failure to determine or even investigate whether the EU ban on defeat-devices similar to the ones employed by VW was being violated. The report went on to note, “In spite of awareness…on possible illegal practices by manufacturers, the commission neither undertook any further technical or legal research or investigation”. The investigation even noted conflicts of interest between EU-approved testing centers and auto manufacturers. Finally and for good measure, the report also chastised national auto regulators in EU member-states as none of these agencies even bothered to look for defeat devices in autos prior the revelations in the United States. Pretty damning stuff from a parliamentary report.

Thomas Fox has practiced law for over 40 years. Tom writes the daily award-winning blog, the FCPA Compliance and Ethics blog and founded the Compliance Podcast Network. Tom leads the discussion on AI in...