Annual Report 2021 · Mercedes-Benz Group
Consolidated Financial Statements
Diesel emission behaviour: governmental
proceedings
exhaust emissions based on the suspicion of potential
violations of, amongst others, the Canadian Environ-
mental Protection Act, as well as undisclosed AECDs
and defeat devices. Mercedes-Benz continues to coop-
erate with the investigating authorities.
As already reported, several authorities and institutions
worldwide were, and still are, active in the form of
inquiries, investigations, procedures and/or orders.
These activities particularly relate to test results, the
emission control systems used in Mercedes-Benz diesel
vehicles and/or the interactions of Mercedes-Benz with
the relevant authorities as well as related legal issues
and implications, including, but not limited to, under
applicable environmental, criminal, consumer protec-
tion and antitrust laws.
In Germany, the Stuttgart public prosecutor’s office
issued a fine notice against Mercedes-Benz in Septem-
ber 2019 based on a negligent violation of supervisory
duties, which became legally binding, thereby conclud-
ing the related administrative offense proceedings
against Mercedes-Benz. The Stuttgart public prosecu-
tor’s office is still conducting criminal investigation pro-
ceedings against Mercedes-Benz employees on the sus-
picion of, amongst others, fraud. In July 2021, the local
court of Böblingen issued penal orders against three
Mercedes-Benz employees with the local court of
Böblingen based on, amongst others, fraud, which have
become final.
In the United States, Mercedes-Benz Group AG and
Mercedes-Benz USA, LLC (MBUSA) reached agreements
in the third quarter of 2020 with various authorities to
settle civil environmental claims regarding the emission
control systems of certain diesel vehicles, which have
become final and effective. The authorities take the
position that Mercedes-Benz failed to disclose Auxiliary
Emission Control Devices (AECDs) in certain of its US
diesel vehicles and that several of these AECDs are ille-
gal defeat devices.
Between 2018 and 2020, the German Federal Motor
Transport Authority (“KBA”) issued subsequent auxiliary
provisions for the EC type approvals of certain
Mercedes-Benz diesel vehicles, and ordered mandatory
recalls as well as, in some cases, stops of the first regis-
tration. In each of those cases, it held that certain cali-
brations of specified functionalities are to be qualified
as impermissible defeat devices. Mercedes-Benz has a
contrary legal opinion on this question. Since 2018,
however, it has (in view of the KBA’s interpretation of
the law as a precautionary measure) implemented a
temporary delivery and registration stop with respect to
certain models, also covering the used car, leasing and
financing businesses, and is constantly reviewing
whether it can lift this delivery and registration stop in
whole or in part. Mercedes-Benz has filed timely objec-
tions against the KBA’s administrative orders mentioned
above. In early 2021, the KBA issued objection orders
(“Widerspruchsbescheide”) in these proceedings,
thereby not following the arguments brought forward by
Mercedes-Benz. Since Mercedes-Benz continues to
As part of these settlements, Mercedes-Benz denies the
allegations by the authorities and does not admit liabil-
ity, but has agreed to, among other things, pay civil pen-
alties, conduct an emission modification programme for
affected vehicles and take certain other measures. The
failure to meet certain of those obligations may trigger
additional stipulated penalties. In the first quarter of
2021, Mercedes-Benz paid the civil penalties, provisions
have been recognised for the emission modification
programme and other measures.
As already reported, in April 201ꢉ, the U.S. Department
of Justice (“DOJ”) requested that Mercedes-Benz con-
duct an internal investigation. Mercedes-Benz con-
ducted such internal investigation in cooperation with
DOJ’s investigation; DOJ’s investigation remains open. In
addition, further US state authorities have opened
investigations pursuant to both state environmental and have a different understanding of the relevant legal pro-
consumer protection laws and have requested docu-
ments and information.
visions, it has filed lawsuits with the competent admin-
istrative court to have the controversial questions at
issue clarified in a court of law. Irrespective of such
objections and the lawsuits that are now pending,
Mercedes-Benz continues to cooperate fully with the
KBA. The new calibrations requested by KBA have been
In Canada, the Canadian environmental regulator Envi-
ronment and Climate Change Canada (“ECCC”) is con-
ducting an investigation in connection with Diesel
271