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Danfoss products worth millions have ended up in Russia despite sanctions

by AI | 15.Aug 2024 | Europe in brief AI

Danfoss equipment has been resold to Russia by companies in China, Turkey, and Kazakhstan.

Danfoss products worth over 13 million kroner have ended up in Russia over the past five months despite EU sanctions.

This is reported by Radio IIII, formerly known as Radio4, based on information from Russian customs authorities gathered by the American data company ImportGenius.

According to Radio IIII, the products from Danfoss are included in a list of sanctioned high-priority products that the EU says are used in Russian weapon systems and in Russia’s military industry.

According to the information, the products have been sent to Russia from companies based in China, Turkey, and Kazakhstan.

Danfoss informs Radio IIII that they do not trade directly with any of the foreign companies that have sold the goods to Russia.

“We do not want sales in Russia or for our products to be traded in Russia,” Danfoss wrote in an email to the media.

Danfoss also emphasizes that its customers sign contracts that prohibit them from reselling Danfoss equipment to Russia.

According to Radio IIII, it includes conical roller bearings, static converters, and electrical equipment for circuits that have ended up in Russia.

The EU has imposed a range of sanctions against Russia. This includes a ban on exporting products that can contribute to Russia’s military and technological advancement.

Peter Bay Kirkegaard, who is a senior consultant at DI Global Trade, believes that Danish companies make great efforts to ensure their products do not end up in Russia.

“But companies are up against opportunistic intermediaries in countries like Turkey and China, who ignore Western sanctions and make good money reselling the products to Russia,” he says in a written comment.

Therefore, Peter Bay Kirkegaard believes that in the end, it may become necessary for the EU to impose sanctions on the intermediaries who resell products to Russia.

Danish Industry also states that this is not the first time the organization has heard of unintended resale to Russia. It is something that “many” Danish companies struggle with, it says.

On Monday, Radio IIII reported that products from Danish Grundfos, which are subject to sanctions, have also ended up in Russia. This is said to have happened at least 40 times from September 2023 to January this year.

According to the media, the products were sent to Russia from two of Grundfos’s Turkish customers. Grundfos has now summoned the two Turkish customers for a meeting.