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Rheinmetall in talks with German government over banned deal with Russia

August 05, 2014, 14:58 UTC+3 BERLIN
Whether the German company will file an indemnity lawsuit is still unclear as no official statements or comments for the press followed
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© EPA/MATTHIAS BALK

BERLIN, August 05. /ITAR-TASS/. German defense concern Rheinmetall AG continues talks with the government that earlier revoked the permit for realization of combat training centre deal with Russia, German major daily Sueddeutsche Zeitung said on Tuesday.

According to the paper, the government seems to not have considered the amount to be paid for annulment of the contract referring to uncertain words of the economic ministry’s spokeswoman.

Whether the German company will file an indemnity lawsuit is still unclear as no official statements or comments for the press followed. The Cabinet said the concern can file a lawsuit if considers this necessary.

According to the law, the federal government can revoke the permit for a deal in case of change in a framework agreement and is then obliged to pay a penalty.

A source in the economics ministry earlier told ITAR-TASS the decision was linked to EU sectoral sanctions imposed on Russia amid the developments in Ukraine. However, the source confirmed the government went beyond the sanctions as the measures adopted in Brussels did not apply to the existing deals.

The training centre in the Russian settlement of Mulino was expected to train up to 30,000 servicemen a year and estimated at 120 million euros. In March, the German government announced freeze of cooperation on this project amid the events in Ukraine. Rheinmetall Chief executive Armin Papperger then said the deal had been almost entirely implemented.

Russian Deputy Defense Minister Yury Borisov said on Monday the situation would not affect commissioning terms.

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