Battle erupts over turbines sent to Crimea

FRANKFURT, Germany — One of Germany’s biggest companies said Monday that it had become an unwilling pawn in a scheme to evade sanctions against Russia and break a de facto blockade of electricity to the annexed territory of Crimea.

The company, Siemens, a giant engineering and electronics conglomerate based in Munich, said a Russian customer had illegally shipped two power plant turbines to Crimea instead of their intended destination in southern Russia. The diversion of the turbines flouted what Siemens said was an agreement not to violate sanctions imposed by the international community after Russia annexed the territory from Ukraine in 2014.

The incident threatens to strain relations between the countries, just days after Chancellor Angela Merkel of Germany hosted a contentious meeting of world leaders in Hamburg, attended by President Vladimir Putin of Russia. The Russian customer, Technopromexport, has close ties to the Kremlin.

The incident also demonstrates how energy has become a weapon in Russia’s continuing struggle with Ukraine, Crimea’s main source of electricity until the conflict interrupted supplies. Moscow had apparently become so desperate to solve an acute power shortage that it was willing to risk inflaming tensions with Germany.

The dispute will also do nothing to encourage foreign investment or repair Russia’s reputation as a place where contracts are oftenignored, property is subject to arbitrary seizure and there is little legal re course.

Siemens has been one of Russia’s most reliable foreign investors. It has done business in Russia since the rule of the czars and usually avoids saying anything to offend the government.

But Siemens said it would begin criminal and civil proceedings in Russia against those responsible for what it called the fraudulent export of the turbines. The unusually sharp statement on Monday followed news reports about the violations, from what the company called “reliable sources.”

Siemens also said it had been lied to by its Russian customer. Technopromexport had repeatedly reassured Siemens that the turbines would not be sent to Crimea, Siemens said.

The Kremlin’s spokesman, Dmitry Peskov, said the turbines had been made in Russia from Russian parts and were not subject to sanctions restrictions. According to Siemens, the turbines were made in Russia with a Russian partner but by contract subject to the sanctions.