The reason why is that the so-called cheat software designed to fool emissions-testing systems when diesel vehicles' nitrogen-oxide levels are being measured may not have actually been illegal in Europe, The New York Times says, citing minutes from a 2011 Geneva meeting of European regulatory officials. During that meeting, UK officials expressed concern that automakers could choose to use particular engine settings when their cars were being tested, and suggested that automakers be mandated to test vehicles under the least "green" setting (i.e., something like the equivalent of "sport" mode in some vehicles). This could become a major issue because most of the 11 million VW vehicles that are alleged to contain the cheat software were sold in Europe. There were less than 500,000 such vehicles sold in the US.
That mandate was never enforced by the European Union (EU), where other loopholes include allowing automakers remove backseats and tape door handles to make the vehicles being tested lighter and more aerodynamic, respectively. In general, EU emissions-testing procedures are thought to be less rigorous than that of the US Environmental Protection Agency (EPA).
Some time next year, US regulators are expected to institute a more real-world emissions test that previously was primarily reserved for heavy-duty trucks. European regulators are slated to do the same at some point in 2017.