Siemens Halting Deals With Russia Damages Berlin-Moscow Business Ties - Official

The relations between German and Russian businesses have been seriously damaged due to German conglomerate Siemens' decision to suspend power equipment deliveries to Russian state firms, Matthias Schepp, the chairman of the Board of the Russian-German Chamber of Foreign Trade (AHK Russland), told Sputnik on Friday.

MOSCOW (Sputnik) — Siemens said earlier in the day that it received "credible information" that four gas turbines delivered in mid-2016 to southern Russia's Taman were "locally modified and illegally moved to Crimea." This move, Siemens said, "constitutes a blatant breach of Siemens' delivery contracts, trust and EU regulations." The company decided to annul a power plant equipment supply license agreement and suspend power equipment supplies to Russian state firms to devise new control measures.

"Confidential relations between German business and its Russian partners have been severely affected [by this situation] and it is still hard to predict the consequences," Schepp said, commenting on Siemens' decision.

Shepp continued by stressing that strict adherence to the terms of agreement was one of the main principles of German business, adding that these rules were similarly followed by German companies in Russia.

In early July, Siemens created a task force team to investigate reports about the transfers of turbines produced by Siemens Gas Turbines Technologies, a joint venture with the Russian Power Machines company, to the Crimean peninsula despite sanctions imposed by the European Union.

On July 10, the company announced it had reason to believe that at least two out of four gas turbines, supplied for a project in southern Russia's Taman, were moved to Crimea against the company's will. Siemens also filed a lawsuit in Moscow's arbitration court in connection with the alleged deliveries of its gas turbines to Crimea.

Commenting on the issue, Russia's Technopromexport (TPE) said it purchased turbines for Crimean power plants in the secondary market, with Russian engineering companies modernizing them.