Siemens halts supplies to Russia, divests from state company

German manufacturer Siemens (SIE GY) announced on July
21 that it is halting supplies of energy-related equipment to Russian state
companies after it confirmed that four power turbines were illegally dispatched
to the illegally annexed Crimean peninsula. It also announced it’s divesting
from a 45% stake in a Russian company that installed the turbines in Crimea,
and it will file a lawsuit to get the turbines removed. They were used in the
construction of thermal power stations.

In response, Ukrainian Foreign Minister Pavlo Klimlin
called for a public investigation of what he described as a deliberate policy
by Siemens executives to circumvent Western sanctions imposed on Russia for the
illegal occupation of Crimea.  He also called for the punishment of those
executives found guilty. The Ukrainian government had made Siemens executives
and German politicians aware of Russian violations, yet these warnings were
ignored, Klimkin said in a July 23 statement.

In his turn, Russian Presidential Administration
spokesman Dmitry Peskov declined to comment, referring questions to the state
enterprises themselves.

Zenon Zawada: The Siemens case is among the biggest successes of the Ukrainian
government in preventing Russia from bypassing Western sanctions. It merely
confirms that the Ukrainians have to be vigilant in ensuring that the sanctions
– intended to get Russia to withdraw from Ukraine – are upheld. The Siemens
case should serve as a valuable precedent in making other Western businesses
think twice about doing business with Russia, let alone circumvent the
sanctions.