[The INVESTOR] The Ministry of Environment said it will revoke certification of Audi and Volkswagen cars that cheated on emission tests on Aug. 2, which would ultimately lead to a sales ban.

The Korean unit could also face a hefty penalty of up to 320 billion won (US$281.46 million), the authorities said. 

According to the ministry, the German automaker was able to manipulate the test documents because the VW models that were sold in Korea were different from those sold in Germany.

“It seems like the automaker submitted the test results of the similar German models in lieu of Korean models to receive certification as soon as possible to be eligible to sell here,” Hong Dong-gon, a ministry official, told reporters on July 26. 

“This is clearly an illegal activity,” he said. “Even if (Audi Volkswagen Korea) files administrative litigation against the decision, it is likely that the (Korean government) will win.”

Earlier this month, the ministry made the preliminary decision to cancel registration of 79 models of 32 Volkswagen, Audi and Bentley vehicles for cheating the ministry's emissions tests.  

A tricky issue is the amount of penalty, which will arrive with the sales ban. Under the revised law that takes effect on July 28, the maximum amount of fine for submitting false emissions documents will increase from the current 1 billion won to 10 billion won for each car type. 

If the ministry implements the law on VW vehicles, the total penalty could surge from 32 billion won to up to 320 billion won.

The officials said it is currently discussing the legal implication of the revised law and will finalize the amount on Aug. 2. 

Feeling growing pressure from the government and the public, Volkswagen Korea has recently decided to stop selling the affected models here. 

By Ahn Sung-mi (sahn@heraldcorp.com)