Daimler AG’s Mercedes-Benz USA has agreed to pay a US$20 million (RM82.8 million) civic penalty over the way it handled a recent vehicle recall exercise involving approximately 1.4 million cars, Reuters reports.

The settlement comes after a year-long investigation led by the US government, which requires the automaker to pay US$13 million (RM53.8 million) or face another US$7 million (RM29 million) fine if it does not comply with the agreement. The National Highway Traffic Safety Administration (NHTSA) said Daimler “failed to notify owners in a timely fashion in some recalls, did not submit all reports and did not launch at least two recalls in a timely fashion.”

Mercedes-Benz USA responded in an official statement, stating “we believe that we did not deliberately do anything wrong, but unfortunately we missed some deadlines in informing the agency of the measures we had taken in fulfilling their requirements.” The company also “agreed to resolve this matter in an effort to answer NHTSA’s questions and move forward.”

Its short term strategy is to meet with NHTSA on a quarterly basis to discuss its recall performance for at least a year, and the company is in the midst of developing more robust procedures with regard to reporting noncompliance concerns.

Meanwhile, NHTSA said it had taken into account “the substantial financial investment that MBUSA has made in the development and rollout of its automated recall management tool, as well as the hiring of additional personnel and ongoing trainings.” At the same time, the NHTSA also raised concerns about “recurring and unannounced failures” in the automaker’s data system in supplying information to the agency’s Vehicle Identification Number lookup tool that allows owners to check to see if their vehicle has been recalled.

“The agency’s reporting requirements help ensure that consumers are protected and given important information about how to get recalls repaired,” said NHTSA Acting Administrator James Owens in a statement. “We expect manufacturers to follow their legal obligations to the agency and to consumers in carrying out safety recalls.”