"Russia-E.U. relations are already not in a good place, not least because there seems to be no pathway for E.U. sanctions easing at this point," said Mujtaba Rahman, managing director for Europe at Eurasia Group, a political consultancy. "In this light, this is going to be seen as something of a provocative act by Russia and will further deteriorate relations between Berlin and Moscow."
The dispute will also do nothing to encourage foreign investment or repair Russia's reputation as a place where contracts are often ignored, property is subject to arbitrary seizure and there is little legal recourse.
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 abandoning any pretense of diplomacy, 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 S. Peskov, said Monday that 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.
"This development constitutes a clear breach of Siemens's delivery contracts, which clearly forbid our customer from making deliveries to Crimea," Siemens said.
While hurt by sanctions, Russia has been in a prolonged economic slump mostly because of low oil prices. Crimea is different. The peninsula, isolated and contested, is under a stricter regime, and electricity in particular has been politicized.
In 2015, Ukrainian nationalists blew up electrical pylons, and rolling blackouts ensued, embarrassing the Russian government by illustrating its dependence on Ukraine to keep everything, including trolley buses and hospitals, running.
Russia quickly unspooled an undersea cable, but it met only part of the region's demands. Ukraine then tried to write its claims to sovereignty into a new electrical supply contract, again rubbing in Russia's inability to power up Crimea.
The attempt to smuggle in sanctioned generators is the most aggressive Russian move to solve the electrical shortage.