Britain proposes unlimited fines for car emissions cheaters

(Reuters) - Carmakers that try to cheat vehicle emissions tests could face unlimited fines and criminal charges under proposals set out on Thursday by the British government.

The announcement is aimed at addressing criticism that the government was toothless in dealing with Volkswagen after a scandal that affected 1.2 million cars in Britain.

The German carmaker admitted in 2015 to using software to cheat diesel emission tests in the United States and has since paid out compensation to U.S. motorists, but has refused to do so in Europe, arguing the software was not illegal there.

"We continue to take the unacceptable actions of Volkswagen extremely seriously, and we are framing new measures to crack down on emissions cheats in future," said junior transport minister Jesse Norman in a statement.

"Those who cheat should be held to proper account in this country, legally and financially, for their actions."

Under the proposals, companies could face criminal charges and fines for selling new vehicles that contain software designed to deceive British emissions tests.

If implemented, any changes could not be applied retrospectively.

The new rules could also be extended to importers of vehicles found to cheat emissions standards.

The proposals will be put forward in a government consultation, giving the auto industry and other interested parties a chance to give their views before any policy is formed.

The consultation will also look at the need for more rigorous tests on fuel economy claims, improving the environmental performance of specialist and modified vehicles, and stricter rules for the sale of stock vehicles that do not meet current emissions standards.

The head of British car industry body the Society of Motor Manufacturers and Traders (SMMT) said the government already had powers to enforce the law and check vehicles.

"There are already severe penalties for any manufacturer involved in any kind of misconduct in the type approval process conducted here in the UK and the government is now looking to extend this to all vehicles wherever they have been approved," said SMMT Chief Executive Mike Hawes.

(Reporting by William James; additional reporting by Costas Pitas; Editing by Mark Potter)