Italian-American car maker Fiat Chrysler Automobiles is in hot water after a US federal agency has issued a record $105 million fine against it. The penalty was imposed due to issues in reporting discovered defects in its vehicles and inadequate recall procedures.

USA Today reports that the penalties leveled against Fiat Chrysler by the National Highway Traffic Safety Administration (NHTSA) include the assignment of an independent monitor to audit the company's recall processes for an extended period to ensure that Fiat Chrysler's safety program meets minimum standards. Part of the agreement also sees Fiat Chrysler buying back a number of vehicles and offer incentives for owners to participate in recall repairs.

Transportation secretary Anthony Foxx said Fiat Chrysler has acknowledged that violations of the Motor Vehicle Safety Act have been incurred, and is open to undergoing "rigorous federal oversight" on the matter.

This may lead to the fines and penalties against Fiat Chrysler being reduced if the company keeps to the terms of the agreement. Fiat Chrysler is expected to sign a consent order agreeing to the penalties imposed by the NHTSA.

Meanwhile, NHTSA administrator Mark Rosekind had said that the car maker's history of poor performance placed "millions of its customers, as well as the driving public, at risk," but the agreement does provide Fiat Chrysler "the opportunity to embrace a proactive safety culture."

The federal action against Fiat Chrysler stemmed from the company's handing of 23 recalls involving 11 million vehicles, including one recall that involved 1.56 million Jeep Liberty and Grand Cherokee SUVs that had gas tanks vulnerable to fires when involved in rear-end collisions.

The penalties against the car maker are said to be the largest in the history of US automobiles. Aside from an outright payment of $70 million cash, Fiat Chrysler needs to spend at least $20 million to meet performance requirements stipulated in the consent order. However, another $15 million may be levied against Fiat Chrysler should additional violations on the part of the company will be discovered.