Siemens spit on sanctions against Russia

Siemens gas turbines were supplied to the Crimea despite the sanctions.
Origin source
Russia supplied gas turbines produced by German Siemens to the Crimea, which is subject to EU sanctions that prohibit the supply of energy technologies to European companies for the peninsula, three sources familiar with the project told Reuters.

Reuters failed to establish whether the delivery of the equipment was carried out with the knowledge or consent of Siemens. But a German company may be under the threat of a potential accusation of violating the sanctions regime and that it has not taken sufficient measures to prevent its equipment from entering the territory of the annexed Crimea.

Russia is building two power stations in the Crimea with a total capacity of 940 megawatts for $ 1.3 billion for reliable energy supplies promised to the residents of the Kremlin after the annexation of the territory. Moscow has already connected the peninsula with the southern energy system through a series of cables along the bottom of the Kerch Strait. The supply of Siemens turbines for the construction of two power plants being built in Crimea earlier this year was frozen because of the risk of violation of sanctions imposed by the European Union after the annexation of the peninsula by Russia three years ago, Reuter knew sources familiar with the project. It is unclear whether new circumstances have emerged that allowed the turbines to be delivered to the Crimea now and whether the supply will be treated as a violation of sanctions if Siemens did not participate in it. "Siemens did not supply turbines to the Crimea and complies with all export controls," said Siemens representative in Munich Wolfram Trost in response to a request to confirm the transfer of the turbines to the Crimea.

Referring to the confidentiality, he did not answer the written questions about whether Siemens knew that his turbines were sent to the Crimea and whether the concern would participate in their installation and maintenance. Moscow office of Siemens did not provide a comment on the request of Reuters.

The Ministry of Energy of the Russian Federation, which oversees projects in the Crimea, declined to comment, addressing questions to the executor of the project - the state Technopromexport. The representative of Technopromexport declined to comment. A source close to the project told Reuters that two of the four turbines were delivered by sea to the Crimea. According to him, they are intended for use at the Sevastopol power station. The turbines were unloaded at the port of Sevastopol, and work was done on the station site for their installation and launching, he said. The source said that the turbine model SGT5-2000E was delivered to the port of Sevastopol. Turbines of this modification are manufactured only by Siemens and its subsidiaries. An official working in the Crimean energy sector, familiar with the progress of the projects, and an employee of the company participating in the construction, also said that Siemens delivered turbines to the Crimea. EU sanctions, imposed for annexation in 2014 by Moscow in the Crimea, prohibit European companies and private individuals from supplying to the peninsula technologies and equipment for the energy sector, as well as actions aimed at circumventing these rules. The supply of Siemens turbines to the Crimea will be a test of the limits permissible for European companies after the introduction of EU sanctions.

Direct export of equipment to the Crimea to European companies is prohibited, but it is not completely clear how the delivery of equipment by third-party firms will be regarded without notifying the manufacturer. The European Commission in the past did not comment on Reuters question with the Siemens turbines, saying that the authorities of the EU member states should monitor compliance with the sanctions regime by companies. The representative of the EC and the representative of the German Ministry of Economics did not provide an immediate comment.

Two sources - close to the project and an official in the energy sector of the Crimea - told Reuters that the turbines were delivered to Sevastopol from the Taman Peninsula, located in the south of Russia. Earlier in March, Siemens told reporters that the Russian plant in St. Petersburg controlled by him supplied turbines for the planned project in Taman, in the south of Russia. Four gas turbines were produced in a joint venture with Aleksei Mordashov's Silovye Mashiny, the Siemens Gas Turbine Technology plant in St. Petersburg, and were delivered to Taman under a contract with Technopromexport. Siemens owns a 65% stake in the joint venture, Power Machines have 35%. Russia itself does not produce gas turbines of medium and high power. The ban on the supply of technology to the Crimea does not apply to Taman, but the project was not implemented there, and Russia is preparing to announce a new tender for generating generating capacities there. Sources close to the Crimean projects earlier told Reuters that one of the options considered was the use of turbines supplied to Taman in the Crimea.

Siemens last year denied this possibility, insisting that the turbines are designed for the Taman project, and he has no reason to think that they will go elsewhere. The concern also claimed that it respected and did not intend to violate the sanctions regime. Lawyers with whom Reuters previously spoke believe that there are no court precedents that can determine whether Siemens can be held accountable for violations of the sanctions regime if a third party sends it to the Crimea.