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Volvo to pay $1.5 million penalty for recall delay

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July 9, 2012—Volvo Cars North America recently agreed to pay $1.5 million in civil penalties to the General Fund of the U.S. Treasury in response to the National Highway Traffic Safety Administration’s (NHTSA) investigation of the company’s failure to report vehicle safety defects to the federal government in a timely manner.

The National Traffic and Motor Vehicle Safety Act requires all auto manufacturers to notify the government and conduct a recall within five business days after determining that a vehicle safety defect exists, or that the manufacturer is not compliant with federal motor vehicle safety standards, the NHTSA said.

The NHTSA launched an investigation of Volvo in January 2011 to determine whether the company met its legal obligation to notify the agency of a safety defect and conduct a recall in a timely manner. The NHTSA’s evaluation of six recalls issued by Volvo in 2010 and one recall in 2012 found evidence that Volvo failed to report safety defects and compliance issues to the agency in accordance with federal law.

"With millions of vehicles traveling our highways every single day, we take our responsibility to safeguard the driving public very seriously and we expect automakers to do the same," said U.S. Transportation Secretary Ray LaHood. "Manufacturers are required to handle safety issues both quickly and appropriately."

As part of the settlement, the NHTSA said Volvo also agreed to make internal changes to its recall decision-making process to ensure timely reporting to consumers and the federal government in the future.

"It's critical to the safety of everyone on our roadways that automakers promptly report safety defects—and take immediate action to resolve the issue," said David Strickland, administrator of the NHTSA. "NHTSA expects all manufacturers to obey the law and address automotive safety concerns without delay."

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