Siemens turbines cause whirlwinds in Crimea

A general view shows a power plant under construction in Sevastopol, Crimea, 5 July 2017. [Anton Zverev/ Reuters]

A firm part-owned by German firm Siemens was preparing to install electricity turbines in Crimea despite prohibitive EU sanctions. The issue was brought to the attention of Brussels and Siemens on Monday (10 July).

Reuters reported exclusively on 5 July, citing sources with knowledge of the transaction, that Russia had delivered Siemens-made turbines to Crimea for use in two power plants under construction there.

Siemens has denied it supplied any turbines to Crimea. In a statement issued on Friday (8 July), it said that if one of its customers had, in violation of the sales contract, re-routed any turbines to Crimea, the company “will not provide any deliveries or services for installation, commissioning support, or warranty”.

But the sources said that one of the firms involved in the installation and commissioning of the turbines in Crimea is Russian-registered ZAO Interautomatika. Siemens has a 45.7% stake in the firm, according to public records.

According to its website, the systems that Interautomatika offers to clients “are based on the use of technology that is produced by Siemens, or under licence from Siemens”.

The sanctions imposed in response to the illegal annexation of Crimea and Sevastopol by Russia include investment in Crimea and Sevastopol, tourism services, export of certain goods and technologies, as well as imports of products, originating from Crimea and Sevastopol into the EU. [Read more.]

EURACTIV asked today (10 July) who is responsible for making sure sanctions are not violated. Commission officials said that the implementation of sanctions was a matter for member states, and that in the reported case involving Siemens, it was a matter for Germany.

The same reply has been given in the past in the case of other reports concerning Crimea sanctions violations.

How EU firms skirt sanctions to do business in Crimea

Products for sale in the Crimean stores of two European retailers are being shipped there from Russia via a ferry and port subject to EU sanctions, transportation employees said, indicating that companies are finding ways to dodge the punitive regime in place since 2014.

But in Berlin, Germany said is up to Siemens to ensure it respects EU sanctions covering Crimea.

“It is the company’s responsibility” to respect export laws and sanctions, Reuters quoted an Economy Ministry spokeswoman.

Siemens moves to stop the installation

Siemens announced yesterday it has taken legal action to prevent the installation of its electricity turbines in Crimea.

Siemens said any rerouting of the turbines to Crimea would constitute a breach of contractual agreements, and has put in place a task force to investigate the facts on the ground.

“All steps have been set in motion to prevent the building, the installation and the operation of the Siemens gas turbines in Crimea,” said the source, who did not want to be named because the matter is still under investigation.

The Kremlin said on Monday the turbines being installed in Crimea were made in Russia from Russian components.

Siemens says the turbines were made at Siemens Gas Turbine Technologies LLC, which is based in St Petersburg. It is 65% owned by Siemens AG and uses Siemens technology.

The Siemens source said the company had taken steps including legal action to prevent components necessary for the commissioning of the turbines from being delivered to Crimea.

Three sources close to the matter told Reuters last week that Russia’s ZAO Interautomatika had been hired to help install the turbines in Crimea.

The Siemens source said that Siemens had acted to block Interautomatika from having that role.

A spokesman for Siemens had no immediate comment yesterday on what steps had been taken. The company had previously said it would not provide any deliveries or services for installation, commission support or warranty if the turbines were in Crimea.

The issue has been raised in diplomatic circles in Moscow, the Siemens source said.

Commission funds France-Ireland power link that bypasses UK

The European Commission has allocated €4 million to a project that will link the French and Irish electricity grids via an undersea cable. Irish lawmakers have now touted the plan as an “obvious solution” to Ireland’s energy reliance on a post-Brexit United Kingdom.

Prestige project

The Kremlin wants to get the two Crimean power plants up and running to fulfill a promise, made by President Vladimir Putin, to ensure a stable power supply for the region’s residents after it was annexed by Moscow from Ukraine in 2014.

The Siemens-made turbines are a vital component because reportedly they are the only ones that fit into the foundations already laid for the power plants, and Russian firms are not able to manufacture comparable equipment on their own.

Delivering the turbines to the site of the power stations is only the start of a complex process to get them running. They are highly sophisticated pieces of equipment packed with electronics and running off specialist software.

They therefore require specialist engineers to install and commission them.

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