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Siemens Decisively Quits Russia in Wake of Crimea Sanctions Scandal

22 July 2017

Siemens said earlier on Friday that all four of its turbines intended for the project in Taman were allegedly illegally delivered to Crimea, offering to cancel the contract and buy back the turbines.

Siemens also said it is halting deliveries of power generation equipment to Russian state-controlled entities while it figures out how to prevent this from happening again.

However, Siemens said the equipment had since been locally modified and shifted to Crimea which it said breached European Union sanctions Russian Federation introduced in 2014 following over its annexation of Crimea from Ukraine.

After confirming that two of the turbines had been delivered to Crimea nearly two weeks ago, Siemens announced that it had launched legal proceedings against the individuals responsible. Siemens has a 45.7 percent stake in the business.

Siemens said it is pressing charges against the Russian contractor, Technopromexport (TPE). A Kremlin spokesman declined to comment Friday during a regular briefing with reporters.

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

"Siemens is implementing an additional controls regime that is exceeding legal requirements by far", it said.

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.

Siemens added that new gas power projects in Russian Federation would only be carried out through companies it controls, ensuring "Siemens-controlled delivery and installation" overseen by its own personnel.

Interautomatika had no immediate response to a request for comment.

Siemens Decisively Quits Russia in Wake of Crimea Sanctions Scandal