Siemens halts sale of power turbines to Russian Federation

In an online statement published Friday, Siemens said Russia had "illegally moved to Crimea against clear contractual agreements" four gas turbines the firm delivered for a project on the Russian mainland in Taman.

The EU imposed sanctions on Russian Federation after its annexation of the Black Sea peninsula from Ukraine in March 2014.

Siemens, which owns 46 per cent of the joint venture, said the move was a breach of its contractual agreements and of European Union regulations.


Siemens's decision on breaking relations with Russian companies might result in vast losses for the company itself, Sergei Shatirov, Deputy Chairman of the Federation council committee for economic policy, shared his opinion with RIA Novosti.

The move is embarrassing for Russian Federation which stands accused of disregarding EU sanctions and of flouting its original agreement with Siemens and it risks making European companies more cautious about doing business there.

Reuters said at the time the delivery might have taken place without Siemens' knowledge, which the company has since confirmed.


Before Russia invaded, Crimea was dependent on power supplies from Ukraine. Siemens made sales of 1.2 billion euros ($1.4 billion) in Russian Federation past year, about 2 percent of its total.

Siemens spokesman Wolfram Trost said the Crimean affair had not sparked a wider review of compliance at Siemens, which battled a worldwide bribery scandal a decade ago, resulting in a then-record $1.6 billion fine from the U.S. Justice Department. It is also pursuing legal actions meant to halt any other deliveries to Crimea and ensure that any equipment that has already been shipped is returned to its original destination.



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