Siemens cuts ties with Russian state companies over Crimea turbine move

21 Jul 2017

Siemens turbine found at a power plant in Turkey. Image: canyalcin/Shutterstock

Siemens will no longer work with Russian state companies after finding out it moved four of its turbines to the politically charged region of Crimea.

German engineering giant Siemens is cutting ties with all Russian state companies under trade agreements with the EU, following the country’s actions in Crimea.

In the wake of Crimea’s unrecognised secession from Ukraine in 2014 to join Russia, the EU has forbidden companies from cooperating with the former. In the past few weeks, however, details have emerged that Siemens energy turbines were moved there, unbeknownst to the company.

In a statement, Siemens said that in the summer of last year, a Russian state company agreed to purchase four gas turbines to be delivered to Taman in southern Russia.

However, it found that upon delivery, they were modified and “illegally moved to Crimea against clear contractual agreements”.

“Siemens continues to pursue criminal charges against the responsible individuals at our customer, TPE, as well as legal actions that are intended to halt any other deliveries to Crimea, and ensure that any equipment that has already been dispatched is returned to its original destination, Taman,” it added.

Siemens lists the consequences

As a result, Siemens said that it will no longer deal with Russian state companies, including divesting its minority stake in one of them, Interautomatika.

Two Siemens employees on the Russian company’s board have been suspended, pending an investigation. In addition, any deliveries made to Russia in the future will require delivery and installation by a Siemens team.

Speaking to Reuters earlier this month, a source close to the project said that at least two of the turbines were sent by Russia to Crimea on a ship, with the city of Sevastopol as its destination.

This too was confirmed by a member of Crimea’s energy sector, which is struggling to support itself since it was cut off from the Ukrainian grid and was looking to use the turbines to independently boost its own energy capabilities.

The Russian government has so far declined to comment except by saying: “This is a matter for the companies involved, and dialogue and cooperation will continue along those lines.”

Siemens turbine found at a power plant in Turkey. Image: canyalcin/Shutterstock

Colm Gorey was a senior journalist with Silicon Republic