One of the more unexplored issues from the Volkswagen emissions-testing scandal is why no EU regulator or member countryโ€™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 countryโ€™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 publicโ€™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 โ€œmaladministrationโ€ 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, โ€œIn spite of awarenessโ€ฆon possible illegal practices by manufacturers, the commission neither undertook any further technical or legal research or investigationโ€. 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...