A Kaunas-based company has breached EU sanctions and supplied equipment for the construction of power plants in Russian-annexed Crimea. LRT Investigation Team reports.
Water filtration systems from Lithuania were used in the construction of thermal power plants in Crimea, data collected by LRT Investigation Team and Scanner project, a Russian anti-corruption initiative, shows. The Lithuanian company Run Engineering supplied the systems to a Russian company Voronezh-Aqua, despite not being authorised to export dual-use items. Voronezh-Aqua carried out the construction of the Balaklava and Tavria power plants in Crimea.
Equipment for Crimea
In March 2019, Russian President Vladimir Putin arrived in Crimea to celebrate the launch of the Balaklava and Tavria power plants.
He was accompanied by Russian Energy Minister Alexander Novak, then deputy prime minister Dmitry Kozak, and Sergei Chemezov, the head of Rostec Corporation and a close associate of Putin.
After the annexation in 2014, the Crimean peninsula faced water shortages and power outages, but Russia was not able to produce the necessary equipment. The EU has imposed sanctions, barring European companies from exporting infrastructure equipment to the annexed region.
The construction of power plants in Simferopol and Sevastopol began in 2016 and the facilities began operating in March 2019.
In 2017, the German company Siemens sold four gas turbines to a Russian engineering company, Technopromexport, a subsidiary of Rostec. To bypass the sanctions, the Russian company said it would use the gas turbines in Krasnodar. Instead, Technopromexport shipped them to Crimea.
Siemens is not the only company to be involved in Russia’s scheme to evade sanctions, LRT Investigation Team and Scanner project have found. Voronezh-Aqua, a Russian engineering company, bought water filtration systems from the Kaunas-based company Run Engineering to be installed in the two power plants.
Voronezh-Aqua was one of four companies in charge of the construction of the two power plants. It was responsible for the installation of water filtration systems and sewage treatment equipment.
Companies in Lithuania and the Czech Republic manufacture and sell all of the water treatment systems to Voronezh-Aqua, documents show. On its website, Voronezh-Aqua states that the equipment is manufactured in a factory in Lithuania’s second largest city, Kaunas.
Voronezh-Aqua was added to the EU sanctions list in 2019.
Bypassing export controls
Run Engineering operates at the Kaunas Free Economic Zone. The small company, employing 16 people, manufactures water filtration and processing systems to be exported to Russia.
In summer 2018, Run Engineering violated EU law by trying to export dual-use items. Companies producing goods that can be used for both civilian and military applications have to apply for an export license.
In 2018, Run Engineering tried to export two ultrafiltration units Run Aqua-UF, according to the case brought to Kaunas District Court in June 2019. The company failed to provide the export license and declaration to the customs, marking these documents as optional. It also later claimed that Run Engineering had the license, but was not asked to show it.
Run Engineering was denied the license on December 17, 2018, due to the risk that the equipment would be shipped to Crimea, according to the annual report in 2018 of the Lithuanian intelligence service, the State Security Department (VSD).
The case revealed that Run Engineering was going to export equipment that uses Dizzer ultrafiltration membranes. Such parts are subject to EU export controls.
Voronezh-Aqua received the membranes on December 17, 2018, the same day that Run Engineering was denied export license. The membranes were to be installed in the two Run Aqua-UF ultrafiltration units.
Run Engineering, therefore, had shipped the membranes a few days before the license was denied. The parts were manufactured by a German company, Inge GmbH.
Voronezh-Aqua posted a video on their YouTube channel showing the construction of the Crimean power plants, and the ultrafiltration units seen in the video were made by Inge GmbH, water treatment market experts confirmed to LRT.
Meanwhile, Povilas Medekša, head of Run Engineering, claimed that the company did not export dual-use items to Russia or Crimea after the company's application for a license was denied.
Medekša also insisted that the ultrafiltration units that were set to be exported did not have the membranes installed, and that the Russian customer bought the membranes from a different supplier.
Russia has received 59 shipments of water filtration systems since December 17, 2018, six of which contain the Run Aqua-UF units.
Run Engineering responded in writing that no equipment was shipped to the two Crimean power plants.
Inge GmbH has been partnering with Run Engineering since 2009, largely for training purposes. However, in 2020, Run Engineering entered into a contract with a different supplier, a representative of Inge GmbH told Deutsche Welle.
Inge GmbH also claimed they had no information on their equipment being shipped to Crimea.
Defunct Czech company
In 2017, Run Engineering bought shares from Miloslav Vimr of a Czech company, Lavimont Brno. The shareholder was a member of the board of directors together with Povilas Medekša and Dmitry Kotenko, chairman of the board of directors at Voronezh-Aqua.
Lavimont Brno is currently headed by Vadim Zaitsev, who bought 50 percent of the company in 2019. The company stopped exporting production in December 2018, a few months before the Crimean power plants were launched.
Radio Free Europe reporters could not locate the office of Lavimont Brno, and Vadim Zaitsev could not be reached either.
Lavimont Brno did sell equipment to customers carrying out projects in Crimea, Vimr confirmed, and added that the company is no longer operating.
The company also carried out construction works of the Astravyets NPP in Belarus, supplying it with pipes, according to Leos Tomicek, vice president of Rosatom Overseas, part of the Russian state atomic agency.
According to Asta Kriaučeliūnaitė from the Lithuanian customs, officers do not inspect every single item being exported. However, it is highly unlikely that a previously seized package can make it through on a second try, she added.
Shareholder in Cyprus
Run Engineering was established half a year after the annexation of Crimea in October 2014. The founder and then only shareholder was Alija Aljakbjarova, a Russian national working at Voronezh-Aqua.
According to Voronezh-Aqua, Run Engineering carries out design work.
In March 2015, Run Engineering began exporting equipment to Russia. A year later, RLA-Aviation Ltd, a company registered in Cyprus, bought out the company’s shares.
In 2017, Marina Karmysheva from Cyprus bought 70 percent of the shares from RLA-Aviation Ltd. Since 2019, her company Nestan Ltd has been the controlling shareholder of Run Engineering.
Medekša had previously headed the Kaunas-based Runtech, which partnered with Russia's Rosatom. Runtech was not deregistered, however, it does not currently operate.
Links to Rosneft and Region Group
Both Run Engineering and Lavimont Brno sell their production to Voronezh-Aqua and both companies claim that their controlling shareholder is Karmysheva, the owner of RLA Group.
In 2020, Karmysheva became the controlling shareholder of QHG Trading LLP, a UK-based company that supplies oil to Russia’s Rosneft. It was rumoured that such a transfer of ownership was done due to the arrest of the Russian businessman Sergey Nevsky, the former owner of QHG Trading LLP.
Moreover, QHG Trading LLP is linked to the Rossium holding company, owned by Roman Avdeyev, and the Region Group, owned by Sergey Sudarikov, Kommersant wrote in 2019.
Karmysheva previously worked at Region Asset Management and Region Investment Company, firms that belonged to Sudarikov.
Moreover, Karmysheva owns Nestan Trading AG, a Swiss company that sells oil from the Novoshakhtinsk Oil Refinery. The refinery was formerly controlled by Viktor Medvedchuk, a Ukrainian oligarch regarded as Putin’s friend.
Nestan Trading also partnered with the Vienna-based oil trading company Cetracore Energy GMBH, which Rosneft JV Projects S.A. holds shares in.
Between 2008 and 2014, Karmysheva headed C.P.V. Mercaston Investment, then owned by Sudarikov’s Matelot Group. Karmysheva became the controlling shareholder of C.P.V. Mercaston Investment in 2014.
C.P.V. Mercaston Investment owned 12.3 percent of NK Rosneft-Yamalnefteprodukt, and 24 percent of the Kaliningrad Sea Commercial Port.
Voronezh-Aqua is currently granted as a security interest to its creditor Region Portfolio Investments, since Dmitry Kotenko has declared bankruptcy. Despite the debt, the company is still being hired to carry out construction works in Russia.
Run Engineering is exempt from corporate and property tax in Lithuania, and also claims tax refunds as an exporter to Russia.
Since 2015, Nestan Ltd's authorised capital has increased by 23.25 million euros. Karmysheva also transferred tens of millions of dollars to RLA Aviation Ltd.
RLA Aviation Ltd owned 2 percent of Elecsnet Holding Limited, a Russian company providing payment services. Rosneft and the Region Group were the shareholders of Elecsnet.
The Region Group later ended up owning the 2 percent of shares that RLA Aviation Ltd. had, Elecsnet reports show.
At the end of 2017, RLA Aviation Ltd's authorised capital grew by 34,750,000 euros.
RLA Aviation Ltd was the shareholder of Run Engineering until 2017. The company also owned the research vessel Nikolay Trubyatchinsky, which the firm leased for 1,746,690 US dollars in 2016.
LRT has approached Rosneft and Voronezh-Aqua for comment, but has not received any response.
Additional reporting by Kasparas Adomaitis, Danilo Bilek, Deutsche Welle.