Siemens vows legal action after turbines turn up in Crimea

Bloomberg

Siemens AG scrambled to reverse a transaction with a Russian partner to try to save face after gas turbines from one of the biggest German investors in Russia’s economy turned up in the annexed region of Crimea, flouting European Union sanctions.
At least two of four turbines manufactured by Siemens for Technopromexport JSC for an electricity project in Taman, south-west Russia, were moved to Crimea “against our will,” the Munich-based company said in a statement on Tuesday. Siemens will initiate criminal charges against the individuals involved and push for a reversal of the deal, it said.
After years of cosying up
to President Vladimir Putin and cementing Siemens’s position as one of the largest German investors in Russia, the maker of trains, health-care equipment and power plants is finding how commercial relations can be soured by political tension.
Any transaction going against international rules could undermine the reputation of a company that less than a decade ago was immersed in the biggest bribery scandal in German history.
Foreign companies and a number of Russian businesses with an international presence have pulled out of Crimea since its annexation by Putin’s regime in 2014. Relations between Russia and its European counterparts were further worsened after the occupation by the subsequent conflict in neighboring Ukraine, which was exacerbated by Russia-supporting insurgents.
GERMAN RESPONSIBILITY
“Implementation and enforcement of E.U. restrictive measures rest with the member states,” Maja Kocijancic, a spokeswoman at the European Commission, the 28-nation EU’s executive arm in Brussels, said in an emailed statement on Tuesday. “The commission is in touch with the German competent authorities on this particular case.”
Siemens said it’s still working out what other actions can be taken. Under former Chief Executive Officer Peter Loescher, the company increased the number of manufacturing sites in Russia, adding a plant in Voronezh, south of Moscow, that makes high-voltage circuit breakers needed to update the power grid. Siemens has operated in Russia for more than 160 years and has partnerships with state companies including Russian Railways JSC and Gazprom PJSC, according to its website.