Siemens scales back Russian ops over Crimea turbines

German industrial conglomerate Siemens said on Friday it would scale back its operations in Russia after confirming gas turbines it sold to companies there had been diverted to Ukraine's Russian-annexed Crimea region in breach of sanctions.

"All four gas turbines that were delivered in the summer of 2016... have since been locally modified and illegally moved to Crimea," the group said in a statement.

The peninsula has been subject to EU sanctions on energy technology since Russia annexed it from Ukraine in 2014.

Munich-based Siemens said it would freeze deliveries of power generation equipment to state-controlled Russian customers.

It will also divest its minority stake in Russian company Interautomatika, which sells power-plant control systems.

And it will terminate a licensing agreement for power generation equipment that it had signed with Russian firms.

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

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

After confirming that two of the turbines had been delivered to Crimea almost two weeks ago, Siemens announced that it had launched legal proceedings against the individuals responsible.

The turbines had originally been supplied for a power-plant project in Taman, in the Krasnodar region of southern Russia -- separated from Crimea by just a few kilometres of water.

Chancellor Angela Merkel's spokesman Steffen Seibert last week pressed Siemens to bring the details of the sanctions breach to light, calling the turbine delivery to Crimea "remarkable and completely unacceptable."

source: AFP