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Siemens Reduces Russian Presence After Turbines Go to Occupied Crimea

Siemens Cuts Ties With Russian State Companies Over Crimea Breach

The German industrial conglomerate Siemens says it is cutting some of its ties to Russia after receiving information that four gas turbines it sold to for use at a Russian power plant had been "illegally" diverted to the Ukrainian peninsula of Crimea.

The Reuters news agency reported several weeks ago that Siemens-made turbines had been used in the construction of two power plants on the Crimean peninsula, which was annexed by Russian Federation in March 2014. The company will "take immediate and decisive action" if it finds further evidence export control regulations were violated.

Siemens said the diversion of the turbines constituted a "blatant breach of delivery contracts, trust and European Union regulations".

That followed a report in the Sueddeutsche Zeitung newspaper that said Russian President Vladimir Putin gave the assurance personally to Germany's foreign minister, Sigmar Gabriel, in September.

Siemens said it would now divest its minority stake in joint venture Interautomatika (IA), which sources have told Reuters was involved in the installation and commissioning of the turbines in Crimea, and suspend its two representatives on IA's supervisory board.

Siemens's decision on breaking relations with Russian companies might result in vast losses for the company itself, Sergei Shatirov, Deputy Chairman of the Federation council committee for economic policy, shared his opinion with RIA Novosti.

Dmitry Peskov, Putin's spokesman, declined to comment when asked by Reuters on Friday whether that was true. Russian Federation uses Siemens trains on its high speed Sapsan rail network.

Siemens stock traded down almost 2% premarket.