The US Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) said Volvo Cars North America has agreed to pay US$1.5m in civil penalties in response to the agency’s assertion that the automaker failed to report safety defects and noncompliances to the federal government in a timely manner.

The National Traffic and Motor Vehicle Safety Act requires all auto manufacturers to notify NHTSA within five business days of determining that a safety defect exists or that the manufacturer is not in compliance with federal motor vehicle safety standards – and to promptly conduct a recall.

"With millions of vehicles traveling our highways every single day, we take our responsibility to safeguard the driving public very seriously and we expect automakers to do the same," said US transportation secretary Ray LaHood in a statement. "Manufacturers are required to handle safety issues both quickly and appropriately."

In January 2011, NHTSA launched an investigation to determine whether Volvo met its obligation under the law to notify the agency of a safety defect and conduct a recall in a timely manner. NHTSA’s evaluation of six recalls issued in 2010 and one recall announced in 2012 found evidence that Volvo failed to report safety defects and noncompliances to the agency in accordance with federal law. As part of the settlement, Volvo Cars North America, and its parent company Volvo Car Corporation in Sweden, agreed to make internal changes to its recall decision-making process to ensure timely reporting to consumers and the federal government in the future.

"It's critical to the safety of everyone on our roadways that automakers promptly report safety defects – and take immediate action to resolve the issue," said NHTSA administrator David Strickland. "NHTSA expects all manufacturers to obey the law and address automotive safety concerns without delay."

NHTSA's investigation led the agency to believe that Volvo did not report known safety defects within five days, as required under the law. The fines received from the automaker will be paid into the general fund of the US Treasury.