Sanctions breach suspected as Siemens & Grundfos equipment spotted at water station in occupied Crimea

The Siemens emblem is visible on water pumps the opening of the Beshterek-Zuisky water conduit station on 18 March 2021.
Photo: rk.gov.ru 
 

Crimea

Article by: Alya Shandra

Editor’s Note

Russia is running full steam ahead to make occupied Crimea more habitable, and it appears that foreign companies are helping achieve this once again. Official footage from the opening of a pumping station on 18 March 2021 revealed its water pumps were produced by Germany’s Siemens and Denmark’s Grundfos, sparking suspicions of a sanctions breach.

A new water conduit station near Simferopol, the capital of Ukraine’s Crimea peninsula which Russia occupied in 2014, is sporting water pumps jointly produced by the EU companies Grundfos and Siemens. This became apparent from Russian state reports from the opening of the station on the 7th anniversary of Russia’s illegal annexation of Crimea, 18 March 2021.

After Russia’s annexation of Crimea in 2014, Ukraine cut off the North Crimean Canal, which supplied 85% the arid peninsula’s water supply. Russian Vice Prime Minister Marat Husnullin was tasked with building a new water supply system.

It is in important to understand that Crimea’s scant water supply is enough to cover the needs of the population. But Russia’s increased troop presence, growing militarization, and relocation of ethnic Russians to the peninsula has strained the limited resources. Further, industry, a major water consumer, has not dropped production.

Particularly, Andriy Senchenko, ex-Deputy Chairman of the Council of Ministers of the Autonomous Republic of Crimea, notes that the peninsula receives one billion cubic meters of water per year from rain and snow, while the needs is the population are 120 million cubic meters of water. Therefore, the question of water in Crimea is not a humanitarian, but a military one.

To improve the water supply of Simferopol, the Beshterek-Zuysky conduit, located some 20 km north of Simferopol, is being constructed based on artesian wells. Its launch was planned for April, but opening technological objects on anniversaries, no matter their state of completion, is a tradition Russia adopted from the Soviet Union.

And so, on the anniversary of the Anschluss, amid much fanfare, Russian Vladimir Putin virtually “opened” the station.

The state TV channel Rossiya-1 had a closeup shot of the seven water pumps that are at present delivering 5000 cum/24, but are planned to increase their output to 22,000 cum/24 hours by 1 June.

Apart from the obvious Siemens logo, the channel captured the nameplate of the pump, the investigative website Scanner Project revealed. It is the product of a partnership between the German technological giant Siemens and Danish Grundfos, concluded in 2019 to “tackle global water challenges.”

We made a closeup shot of the pump; its model number could be made out as 99143734. This corresponds to the pump type CR 185-6 A-F-A-V-HQQV.

Screenshot from the Rossiya-1 report showing the nameplate of the pump. Image: Euromaidan Press

Although Grundfos had opened a factory in Moscow, the nameplate of the pump clearly says “made in Denmark.”

Sanctions violations?

The pump type CR 185-6 A-F-A-V-HQQV by Grundfos and Siemens installed in occupied Crimea

The use of these pumps appears to violate sanctions the EU adopted in response to Russia’s occupation of Crimea.

Namely, the Council Regulation (EU) No 692/2014 of 23 June 2014 states:

Article 2b

1. It shall be prohibited to sell, supply, transfer, or export goods and technology as listed in Annex II:

(a) to any natural or legal person, entity or body in Crimea or Sevastopol, or
(b) for use in Crimea or Sevastopol.

Annex II includes, among other items, “Pumps for liquids, whether or not fitted with a measuring device; liquid elevators.”

It appears that the presence of these pumps violates EU sanctions regulations. This means EU technology is aiding Vladimir Putin in securing the illegal annexation of Crimea.

Now, granted, such pumps are sold by resellers, one of which is located in Russia. But if the sale of such equipment to Crimea is prohibited by EU sanctions, it should be the responsibility of the producer to ensure that its goods do not end up in the occupied peninsula.

This is not the first scandal with Siemens in occupied Crimea. Back in 2017, Siemens turbines ended up in two power stations being constructed to make up for the energy deficit. Then, the German company claimed that it was duped by its Russian partner and till the last moment believed that the turbines were destined for another power station.

However, despite its denials, Siemens could not have not known that the turbines would be used in the occupied peninsula, as we reported back then. At best, Siemens’ role in the turbine scandal is described as “criminal negligence.” Currently, German prosecutors are still in the process of investigating the possible sanctions breach.

In the current case of Siemens and Grundfos, it could very well be that the pumps were installed in Crimea not with the hands of the EU companies, but with the hands of its Russian partners and intermediaries. However, the result is identical: western technology is helping the Russian dictator secure his grip over occupied territory.

Who built the station?

According to Russia’s state tender system, works at the Beshterek-Zuysky conduit are being performed on behalf of the customer “State institution of the Republic of Crimea ‘Investment and construction department of the Republic of Crimea.” This occupation authority of Crimea has concluded two contracts, one for RUB 186.8 mn ($2.4 mn) and another for RUB 1.4 bn ($17.8 mn), with LTD “Sovremennyie Sistemy Renovatsii” (“Modern renovation systems”; LTD “SSR”).

The contracts (1, 2) mention that LTD “SSR” will use Russian state funds to purchase and install equipment necessary for the work of the station. Both stipulate that no subcontractors will be involved.

Scanner Project draws attention to the fact that 70% of shares of LTD “SSR” are owned by Mikhail Burenko, manager of the magazine “Polymer pipes.” This magazine is owned by the Polyplastic group of companies; the remaining 30% of the shares of LTD “SSR” are owned by Lev Gorilovsky, president of Polyplastic.

Why didn’t Polyplastic take on the project itself, and instead took on the state contract through LTD “SSR”? Scanner Project suggests this is because Polyplastic’s ownership was concluded through the Cyprus companies and Radius Systems Holdings Ltd и APG Polyplastic Group Ltd. EU sanctions prohibit EU entities from entering into relations with the occupation authorities of Crimea.

Moreover, Polyplastic’s empire has a British company as well: Radius Systems Holdings Ltd. Its general director, Miron Gorilovsky (father to Lev Gorilovsky) and his business partner Valentin Buyanovsky are British residents.

Nevertheless, Polyplastic’s production is also used at the water conduit. It was also seen on the Rossiya-1 report, Scanner Project writes.

One of the plastic water storage containers produced by Polyplastic are now being used at the Beshterek-Zuysky conduit in occupied Crimea. Screenshot from Rossiya-1 TV report, via Scanner Project

But what about the pumps? It appears that this equipment had actually been delivered not by LTD “SSR” but by another company, despite the absence of subcontractors in the tender documentation.

That company is VDK, located in the Special Economic Zone “Technopolis Moscow.” Its Director-General Gennadiy Degtev told, as quoted by the Russian state news agency TASS, that the pumping station in Beshterek-Zuisky was equipped by VDK:

“Seven pumps, a complex including collectors, hydraulic expansion joints and various shut-off and control valves, as well as a power supply and control system for the entire station.”

TASS notes that the installation was developed and delivered by VDK specialists over only three months and that the company will produce and deliver an electrolytic system for water purification to the water conduit.

Further, VDK’s commercial director Maksym Novikov told that the company offers “equipment designed and made in Moscow, which is not inferior in performance to the best Western counterparts,” implying that the company develops its own products, not sells foreign goods.

“The company’s products are produced at our own manufacturing facilities based on original patented designs created by our professionals,” dubs VDK’s website.

Perhaps some components of the pumping station were indeed made by VDK, but the centerpiece is clearly equipment produced by the EU companies Grundfos and Siemens.

Furthermore, it is peculiar that the official state tender for the construction of the conduit mentions one company, the equipment is installed by another which claims to develop its own domestic products, yet has delivered equipment by EU companies.

Russia’s endless struggle for water in Crimea

After Russia occupied Crimea in 2014, it quickly became apparent that the peninsula was heavily reliant on mainland Ukraine for virtually everything. Russia’s militarization of the peninsula and processes of demographic replacement further strained its limited resources.

Scandalously, Crimea’s power needs were partially met in 2017, when Russia opened two power stations featuring turbines from the German company Siemens in the peninsula.

However, the shortage of water is a problem less easily solved. The arid peninsula had received 85% of its water from Ukraine’s Dnipro river. The remaining 15% from internal sources is enough to cover the needs of the Crimean population, however, agriculture, industry, and the ever-growing military needs are out of the question.

Nevertheless, as the Kremlin prioritizes the latter, water is rationing has been introduced, with many Crimeans receiving tap water only six hours a day.

The Crimean occupation authorities’ search for water has led them to such exotic approaches as seawater desalinization and cloud seeding. Both so far have not yielded sustainable results.

Groundwater drilling, on the other hand, has been more resultful — but there is a caveat. As Crimea is basically an arid island, its groundwater reserves are replenished by rain. Since there isn’t enough of it, the underground water reservoirs will eventually become exhausted.

The environmental consequences of this are ominous; soil salinization is already accelerating, and depletion of groundwater reserves will lead to increased desertification of ecosystems dependent on them, the Association for the Reintegration of Crimea warns:

“The operation of the station will lead to further dehydration of territories, will destroy unique hydro landscapes. Moreover, the dehydration of the Zuy Valley will cause a social catastrophe for the inhabitants of this valley, including the indigenous Crimean Tatar people.”

The innovative equipment of Grundfos and Siemens in Crimea may provide short-term relief for Simferopol, but in the long run, it will only exacerbate the peninsula’s water problems and prop up a dictator. A far cry from their declared goal of pioneering “solutions that contribute to solving the world’s water and climate challenges.” And an illegal one, as well.

Russia will continue to squeeze out Crimea’s remaining groundwater as part of its efforts to ccreate out a new water supply system. This opens up illegal earning opportunities for EU companies, and we can expect other such breaches.

But the only way to sustainably solve Crimea’s water problems is to restore Ukraine’s sovereignty over the peninsula.

Read also:

Crimea. Dehydration: A film exposing Russia’s colonial policy and the desiccation of the occupied peninsula

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