Siemens sells stake in Russian firm after Crimea turbine scandal

Siemens turbine

The European Union allows the export of power station parts to Russian Federation but not to Crimea, the Ukrainian peninsula annexed by Russian Federation in 2014. The company will "take immediate and decisive action" if it finds further evidence export control regulations were violated.

All four of the gas turbines that were delivered in the summer for power plants in Taman, southern Russian Federation were illegally shipped to Crimea, Siemens said in a statement, citing credible information it obtained.

Siemens said the diversion of the turbines constituted a "blatant breach of delivery contracts, trust and European Union regulations".

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.

Matthias Schepp, head of the German-Russian chamber of commerce, said: "German companies ought to be able to depend on contracts being upheld".

More news: Treasury Department Fines Exxon Mobil for Russia Sanctions Violations

Asked by Reuters about similar reports in business weekly WirtschaftsWoche, Putin's spokesman Dmitry Peskov declined to comment.

Siemens shares declined 0.2 percent to 117.90 euros at 10:15 a.m.in Frankfurt, valuing the company at 100.2 billion euros ($116 billion).

Siemens said it would put in place additional controls to ensure that energy equipment in future will only be dispatched once Siemens has confirmed it can be installed at the agreed destination.

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

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