November 29, 2018 / 11:58 AM / 16 days ago

Three Siemens employees investigated over turbines in Crimea

The Siemens logo is seen on a building in Siemensstadt in Berlin, Germany, October 31, 2018. REUTERS/Hannibal Hanschke/Files

MUNICH/MOSCOW (Reuters) - Prosecutors are investigating three German Siemens employees based in St. Petersburg over allegations they violated EU embargo rules, the Hamburg public prosecutor’s office said.

Siemens sold seven gas turbines to Russia in 2015 and 2016, but four of them were later installed in Russia-annexed Crimea, which is subject to sanctions from the European Union.

The bloc imposed sanctions after Russia annexed the Black Sea peninsula from Kiev in March, 2014, and ratcheted them up as Moscow went on to back rebels fighting against government troops in east Ukraine.

Siemens said in its annual report published on Wednesday that it was fully cooperating with the authorities.

While Siemens had agreed to sell 7 turbines, only 4 were delivered, an option for a further 3 turbines was never drawn.

The turbines order was worth 213 million euros and the investigation had been going on since May, a spokesman for the prosecutor said.

Siemens said that the turbines were ordered and delivered for a power plant project in Taman in southern Russia. But they were then transferred to Crimea by Siemens’ Russian customer OAO VO TechnoPromExport and installed in new gas-fired power plants in a breach of the sales contract.

OAO VO TechnoPromExport declined to comment.

Siemens sued OAO VO TechnoPromExport in Russia to get the sales contract cencelled. But its case was dismissed by four consecutive courts, Siemens said.

Reporting by Alexander Hübner; Additional reporting by Gleb Stolyarov; Writing by Arno Schuetze; Editing by Richard Balmforth

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