South Korea has suspended sales of 80 Volkswagen models and fined the German carmaker over allegations the firm rigged emissions test data.
Volkswagen will be fined 17.8bn Korean won ($16m; £12m), in addition to a 14bn won fine from last year, the ministry of environment said.
Europe's largest carmaker admitted last year that it had falsified emissions data in its diesel vehicles.
The firm has since suffered a global setback in sales and reputation.
The sales ban in South Korea affects 32 types of cars - including the VW Golf and Jetta - but a total of 80 models, which include different size engines or trimmings of each type of car.
The measures, which affect VW, Audi and Bentley models, come as the result of an extensive probe into the company which saw VW offices in South Korea raided by investigators.
South Korea's environment ministry also revoked certification for an additional 83,000 cars, bringing the total number of cars de-certified to more than 200,000.
That is about 68% of the 300,000 cars sold by VW in Korea since 2007, Yonhap news agency said.
The country is an important market for VW, especially for the firm's luxury brands Bentley and Audi, and the company had more than tripled its sales before it was hit by a slump in the wake of the emissions scandal.
Analysis: Steve Evans, South Korea correspondent
The South Korean authorities are going for Volkswagen with a vengeance. Not only have they fined the company and banned sales of its brands but prosecutors want to put executives on trial.
There may be those who say that the vigour of the Korean response stems partly from the fact that South Korea is one of the world's strongest car-making economies. Korean brands compete bumper-to-bumper with VW's.
South Korea itself is not that big a market for VW but tarnishing the rival's brand might help sales in China.
All the same, figures out recently showed that VW remains the world's biggest carmaker. Sales were down 7% in the United States in the first six months of the year - but up by the same percentage in China.
What is the firm accused of?
VW admitted it had installed a cheating software in diesel cars which detects when they are being tested for emissions and then runs the car below normal power to achieve better results.
Which countries are affected?
It's a global scandal but the problem was first uncovered in the US. The German carmaker said that some 11 million vehicles were affected worldwide.
What's VW doing now?
The company has launched an internal inquiry and has begun recalling millions of cars worldwide. VW also set aside billions of dollars for fines and compensation costs.