CRIMINAL LAW ASPECTS – CRIMINAL CODE (KZ-1)
According to the traditional division of law, criminal law does not fall under public law aspects (since criminal law exists as a special traditional part of law), regardless of the fact that it is also discussed in this article.

The affair in question has (will have) obvious criminal law consequences. Just a few days after the VW emission affair broke – came to light – criminal charges were filed in the home state of Germany with the competent public prosecutor’s office, which also launched a preliminary criminal investigation into fraud committed by VW, focusing on legal proceedings against the persons responsible in the Group. In any case, it is improper to speculate on future criminal consequences, but the fact is that even under Slovenian criminal law there are legal elements of several criminal offences, and the Slovenian criminal court has the jurisdiction to deal with these cases.

The Criminal Code stipulates that a person, in order to obtain unlawful property gain for themself or for someone else, misleads another person by misrepresenting or concealing actual circumstances to cause or maintain misunderstanding, thereby deceiving the other person to commit or fail to commit an act to the detriment of their own or property or the property of others, shall be punished by imprisonment for a term not exceeding three years (Article 211 of the Criminal Code (KZ-1) (this criminal offence was also included in the previously Criminal Code, Official Gazette of the Republic of Slovenia, no. 95/04, in Article 217, hereinafter: KZ)). The fact is that the Group, by deliberately concealing the actual emissions, attracted and gained many customers (who were deliberately and cunningly deceived about the emissions), which led them (especially those who based their decision on declared environmental friendliness) to decide to buy a specific vehicle from authorised vehicle dealers in the Republic of Slovenia. In each specific case, however, taking into account the specific case on the principle of subjective criminal liability, it is necessary to prove the legal elements and responsibility for the alleged crime. Hypothetically, the sellers, distributor – importer and manufacturer – received/have the benefit, while (possibly only) the buyers sustained damages by purchasing specific vehicles. Considering the extent of the Group’s fraud and the specific potential defendants in criminal proceedings, the severity of the prohibited legal consequences – damage to customers and others – more broadly (environment, public finances), it is clear in advance that this are specific and exceptional eventual criminal proceedings, and most likely (if) one of the aggravated forms of the crime of fraud. This can (will usually be qualified) also be presented as a special criminal offence of business fraud under Article 228 of KZ-1 (or the previous Article 234.a of KZ). KZ-1 also criminalises the criminal offence of abuse of trust or position in the performance of economic activity, specifically stipulating that any person pursuing economic activity that, in order to obtain unlawful property gain or cause property damage, abuses their position or trust given, violates the rights or waives their duties under the law, other regulation, legal entity’s by-law or legal transaction regarding the disposal of foreign property or benefits, their management or representation, shall be prosecuted by criminal law (Article 240 of KZ-1 (or previous KZ – Abuse of position or rights under Article 244)). All theoretically possible criminal offences under the Slovenian KZ-1 can be officially prosecuted criminal offences. Given the fact that the transactions in question – sales contracts – were concluded in the territory of the Republic of Slovenia, the Slovenian law enforcement and judicial authorities (especially the latter) may also be given jurisdiction (Article 26 of the Criminal Procedure Act (ZKP)). The elements of criminal law issues are undoubtedly given, as the actions of the Group (in public – media), by the logic of things, practically call for the use of criminal law instruments, which does not mean that the established and final criminal epilogue will come with a final criminal conviction (and especially in the Republic of Slovenia).

TYPE APPROVAL OF VEHICLES – REGULATION
Regulation (EC) no. 715/2007 of the European Parliament and of the Council on type approval of motor vehicles with respect to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6) and on access to vehicle repair and maintenance information is a directly applicable legal act (also) in the Republic of Slovenia.

The Regulation establishes common technical requirements for the type approval of motor vehicles and replacement parts, such as replacement pollution control devices, with regard to their emissions. In addition, it lays down rules for in-service conformity, durability of pollution control devices, on-board diagnostic (OBD) systems, measurement of fuel consumption and accessibility of vehicle repair and maintenance information (Article 1 of Regulation no. 715/2007). Manufacturers shall demonstrate that all new vehicles sold, registered or put into service in the Community are type approved in accordance with this Regulation and its implementing measures. Manufacturers shall also demonstrate that all new replacement pollution control devices requiring type approval which are sold or put into service in the Community are type approved in accordance with this Regulation and its implementing measures. Manufacturers shall set out carbon dioxide emissions and fuel consumption figures in a document given to the purchaser of the vehicle at the time of purchase (Article 4 of Regulation no. 715/2007).

The manufacturer shall equip vehicles so that the components likely to affect emissions are designed, constructed and assembled so as to enable the vehicle, in normal use, to comply with this Regulation and its implementing measures. The use of defeat devices that reduce the effectiveness of emission control systems shall be prohibited (Article 5 of Regulation no. 715/2007).

With effect from 2 July 2007, if a manufacturer so requests, the national authorities may not, on grounds relating to emissions or fuel consumption of vehicles, refuse to grant EC type approval or national type approval for a new type of vehicle, or prohibit the registration, sale or entry into service of a new vehicle, where the vehicle concerned complies with this Regulation and its implementing measures, and in particular with the Euro 5 limit values of with the Euro 6 limit values set out in the annex to this Regulation (Article 10 of Regulation no. 715/2007).

According to this Regulation, type-approval (administrative) law is unified and directly applicable at EU level. In the specific case, this means that the type approvals for the disputed vehicles are also valid directly in the Republic of Slovenia, even though they were (usually) issued in the country of the manufacturer – Germany. The German authorities apparently did not detect the Group’s fraud and issued type approvals for its vehicles; the question that arises is whether the authorities should and could detect this. Type approvals did not automatically become invalid because of the affair.

Notices from the German type-approval authority, Kraftfahrt – Bundesamt (KBA) to all European type-approval authorities (example: First recall in the Volkswagen Group to eliminate irregularities related to NOx emissions. Slovenian Traffic Safety Agency (18 April 2016). Available at: https://www.avp-rs.si/prvi-odpoklic-vozil-v-seriji-nepravilnosti-pri-skupini-volkswagen/), obliges/calls upon VW (for specific vehicles, e.g. Amarok ) that it is obliged to remove the defeat device from all affected vehicles with the EA 189 Euro 5 engine, thus ensuring that all technical requirements of individual acts of Directive 2007/46/EC (Directive 2007/46/EC 5 September 2007 establishing a framework for the approval of motor vehicles and their trailers (Official Journal of the European Union, 32007L0046, L 263/1)) are met once the prohibited defeat device is removed. Otherwise, recalls of (all) vehicles of the Volkswagen Group are expected to take place from the ninth week of 2016 until the end of September 2016.

The manufacturer will inform vehicle owners in accordance with Directive 2007/46/EC of the recalls, which will be carried out at the expense and in accordance with the manufacturer’s instructions (as in: First recall in the Volkswagen Group to eliminate irregularities related to NOx emissions. Slovenian Traffic Safety Agency (18 April 2016). Available at: https://www.avp-rs.si/prvi-odpoklic-vozil-v-seriji-nepravilnosti-pri-skupini-volkswagen/). KBA, which in this case is the competent type-approval authority for the investigation and audit of single European type-approval procedures, together with the manufacturer Volkswagen also prepares service instructions for recalling affected vehicles and measures to eliminate irregularities in accordance with the prescribed procedure for remediation of affected vehicles.

TAX REGULATION – MOTOR VEHICLES TAX ACT (ZDMV)
The Motor Vehicle Tax Act (ZDMV) introduces/regulates the obligation to pay motor vehicle sales tax, which is the revenue of the budget of the Republic of Slovenia (Articles 1 and 2 of the ZDMV). The taxable person is the manufacturer or person who acquires a motor vehicle in another EU member state, or the importer of motor vehicles. The tax base is the sale price of an individual motor vehicle, which does not include this tax and value added tax. The tax rate for motor vehicles (limited to certain tariff codes) depends on the CO2 emission in combined driving (the criterion is CO2 emission in grammes per kilometre) and the type of fuel used for propulsion. The tax liability arises when motor vehicles are involved in a transaction (Articles 4, 6 and 7 of the ZDMV).

During internal investigations, the VW Group (also) discovered that there were irregularities in the determination of the value of CO2 in the process of obtaining type approval for vehicles. As a result, the tax was incorrectly assessed for the taxpayer, as the vehicles were not correctly classified in emission classes. Porsche Slovenija announced that if further investigations confirm the changed values of CO2 for certain engines to such an extent that the amount of motor vehicle tax (MVT) would change, the Slovenian importer as the taxable person will assume all obligations for MVT for vehicles imported through Porsche Slovenija (as in: VW: We will settle any underpaid tax. Delo, d. d. (18 April 2016). Available at: http://www.delo.si/prosti-cas/na-kolesih/volkswagen-nepravilnosti-tudi-pri-izpustu-co2.html.)). At the same time, we note that according to the law, taxable persons can also include individual buyers as persons who acquire a motor vehicle in another EU member state (excluding the importer). However, the importer is not publicly assuming these obligations (although the incorrect tax assessment was solely due to the illegal conduct of the Group, which is represented by the general importer), although these vehicles (as well) are also involved in the deceit (fraud) regarding emissions (in terms of NOx and CO2). In individual cases, the buyer may suffer additional damage when they have to settle any difference to the correct assessment of motor vehicle sales tax (taking into account / with limitation: e.g. the statute of limitations for tax liabilities itself (5-year relative and 10-year absolute deadline, see Article 125 of the Tax Procedure Act, Official Gazette of the Republic of Slovenia, no. 13/2011 et seq.)).

Source: Pravni vidiki afere Dieselgate [Legal Aspects of Dieselgate] (master’s thesis), 2016, Damjan Merhar