Siemens rethinks some Russian business after turbines moved to Crimea

MUNICH, Germany (Reuters) — Siemens is rethinking some of its business connections in Russia after two of its gas turbines turned up in Crimea, a region subject to EU sanctions on energy technology, a company source familiar with the matter told Reuters on Tuesday.

The German industrial group supplied the turbines for a project in Russia but said on Monday that at least two of them had been moved to Crimea without its knowledge and against its will, confirming an exclusive Reuters report.

Russia annexed the Black Sea peninsula from Ukraine in 2014 in what the European Union considers a breach of international law.

"We have to think what this means for our relations to Russia," the company source said, asking not to be named because of the delicacy of the matter. "We can't simply go back to business as usual."

"One has to keep a cool head but act responsibly," the person said on Tuesday. "There must be a certain effect on particular connections."

The source declined to say whether this could affect Siemens' joint venture with Russian Power Machines, Siemens Gas Turbine Technologies LLC, which built the turbines that have ended up in Crimea.

A spokesman for Siemens declined to comment.

Germany's ambassador said that Russia will have seriously hurt its prospects for investment if it is confirmed that the Siemens-made turbines have been delivered to Crimea, Interfax news agency reported.

Siemens said on Monday it would press criminal charges over the moving of its turbines from Russia to Crimea, and would seek to have them returned to Taman, their original destination.

"Siemens insists categorically on full compliance with all export control restrictions for itself and also at its partners and customers. In addition, Siemens is evaluating what additional actions are possible," it said.

Siemens made about $1.4 B in sales in Russia last year, roughly 2% of its total revenue. It is active primarily in energy and transportation and has said it indirectly employs 48,000 people in the country.

Chief Executive Joe Kaeser met President Vladimir Putin several times in his first year after becoming CEO in 2013, and attracted wide criticism for a visit just after Russia's 2014 annexation of Crimea.

At the time, he reaffirmed his commitment to Russia, where Siemens has been present for almost 170 yr and has invested about $1.14 B in the past decade, saying the relationship would not be sidetracked by "short-term turbulence."

Reporting by Alexander Huebner; Writing by Georgina Prodhan; Editing by Sabine Wollrab and Philippa Fletcher

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